Exhibit 4 (b)
EXECUTION COPY
INTER*ACT OPERATING CO., INC.
and
STATE STREET BANK AND TRUST COMPANY,
Trustee
INDENTURE
Dated as of December 15, 1999
$70,000,000
Senior Pay-In-Kind Notes Due 2003
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION...................................................................................2
SECTION 101. Definitions................................................................................2
SECTION 102. Compliance Certificates and Opinions......................................................22
SECTION 103. Form of Documents Delivered to Trustee....................................................23
SECTION 104. Acts of Holders...........................................................................23
SECTION 105. Notices, Etc., to Trustee and Company.....................................................24
SECTION 106. Notice to Holders; Waiver.................................................................25
SECTION 107. Effect of Headings and Table of Contents..................................................25
SECTION 108. Successors and Assigns....................................................................25
SECTION 109. Separability Clause.......................................................................26
SECTION 110. Benefits of Indenture.....................................................................26
SECTION 111. Governing Law.............................................................................26
SECTION 112. Legal Holidays............................................................................26
ARTICLE II
SECURITY FORMS..........................................................................................26
SECTION 201. Forms Generally...........................................................................26
SECTION 202. Restrictive Legends.......................................................................28
ARTICLE III
THE SECURITIES..........................................................................................29
SECTION 301. Title and Terms...........................................................................29
SECTION 302. Denominations.............................................................................30
SECTION 303. Execution, Authentication, Delivery and Dating............................................30
SECTION 304. Temporary Securities......................................................................31
SECTION 305. Registration, Registration of Transfer and Exchange.......................................32
SECTION 306. Book-Entry Provisions for Global Securities...............................................33
SECTION 307. Special Transfer Provisions...............................................................35
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities..........................................38
SECTION 309. Payment of Interest; Interest Rights Preserved............................................39
SECTION 310. Persons Deemed Owners.....................................................................40
SECTION 311. Cancellation..............................................................................40
SECTION 312. Computation of Interest...................................................................41
SECTION 313. Wire Transfers............................................................................41
ARTICLE IV
SATISFACTION AND DISCHARGE..............................................................................41
SECTION 401. Satisfaction and Discharge of Indenture...................................................41
SECTION 402. Application of Trust Money................................................................42
ARTICLE V
REMEDIES................................................................................................43
SECTION 501. Events of Default.........................................................................43
SECTION 502. Acceleration of Maturity; Rescission and Annulment........................................44
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee...........................45
SECTION 504. Trustee May File Proofs of Claim..........................................................46
SECTION 505. Trustee May Enforce Claims Without Possession of Securities...............................46
SECTION 506. Application of Money Collected............................................................47
SECTION 507. Limitation on Suits.......................................................................47
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest..................................................................................48
SECTION 509. Restoration of Rights and Remedies........................................................48
SECTION 510. Rights and Remedies Cumulative............................................................48
SECTION 511. Delay or Omission Not Waiver..............................................................48
SECTION 512. Control by Holders........................................................................49
SECTION 513. Waiver of Past Defaults...................................................................49
SECTION 514. Waiver of Stay or Extension Laws..........................................................49
ARTICLE VI
THE TRUSTEE.............................................................................................50
SECTION 601. Notice of Defaults........................................................................50
SECTION 602. Certain Rights of Trustee.................................................................50
SECTION 603. Trustee Not Responsible for Recitals or Issuance of Securities............................51
SECTION 604. May Hold Securities.......................................................................52
SECTION 605. Money Held in Trust.......................................................................52
SECTION 606. Compensation and Reimbursement............................................................52
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests............................53
SECTION 608. Resignation and Removal; Appointment of Successor.........................................53
SECTION 609. Acceptance of Appointment by Successor....................................................54
SECTION 610. Merger, Conversion, Consolidation or Succession to Business...............................55
ARTICLE VII
HOLDERS LISTS AND REPORTS BY TRUSTEE....................................................................55
SECTION 701. Disclosure of Names and Addresses of Holders..............................................55
SECTION 702. Reports by Trustee........................................................................56
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE.......................................................................................56
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms......................................56
SECTION 802. Successor Substituted.....................................................................57
SECTION 803. Securities To Be Secured in Certain Events................................................57
ARTICLE IX
SUPPLEMENTAL INDENTURES.................................................................................58
SECTION 901. Supplemental Indentures Without Consent of Holders........................................58
SECTION 902. Supplemental Indentures with Consent of Holders...........................................59
SECTION 903. Execution of Supplemental Indentures......................................................60
SECTION 904. Effect of Supplemental Indentures.........................................................60
SECTION 905. Conformity with Trust Indenture Act.......................................................60
SECTION 906. Reference in Securities to Supplemental Indentures........................................60
SECTION 907. Notice of Supplemental Indentures.........................................................60
ARTICLE X
COVENANTS...............................................................................................61
SECTION 1001. Payment of Principal, Premium, if any, and Interest......................................61
SECTION 1002. Maintenance of Office or Agency..........................................................61
SECTION 1003. Money for Security Payments to Be Held in Trust..........................................61
SECTION 1004. Corporate Existence......................................................................63
SECTION 1005. Payment of Taxes and Other Claims........................................................63
SECTION 1006. Statement by Officers as to Default......................................................63
SECTION 1007. Provision of Reports and Financial Statements............................................64
SECTION 1008. Limitation on Indebtedness...............................................................64
SECTION 1009. Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries.............................................................................64
SECTION 1010. Limitation on Restricted Payments........................................................65
SECTION 1011. Limitation on Transactions with Affiliates...............................................66
SECTION 1012. Limitation on Liens......................................................................67
SECTION 1013. Purchase of Securities upon a Change of Control..........................................67
SECTION 1014. Limitation on Assets Sales...............................................................68
SECTION 1015. Limitation on Lines of Business..........................................................70
SECTION 1016. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries..................................................................70
ARTICLE XI
REDEMPTION OF SECURITIES................................................................................71
SECTION 1101. Mandatory and Optional Redemption........................................................71
SECTION 1102. Applicability of Article.................................................................71
SECTION 1103. Notice to Trustee of Redemption..........................................................71
SECTION 1104. Selection by Trustee of Securities to Be Redeemed........................................71
SECTION 1105. Notice of Redemption.....................................................................72
SECTION 1106. Deposit of Redemption Price..............................................................73
SECTION 1107. Securities Payable on Redemption Date....................................................73
SECTION 1108. Securities Redeemed in Part..............................................................73
TESTIMONIUM........................................................................................................
SIGNATURES AND SEALS...............................................................................................
SCHEDULE I Existing Affiliate Transactions
EXHIBIT A Form of Note
EXHIBIT B Form of Certificate to Be Delivered upon Termination of Restricted Period
EXHIBIT C Form of Certificate to Be Delivered in Connection with Transfers to
Non-QIB Institutional Accredited Investors
EXHIBIT D Form of Certificate to Be Delivered in Connection with Transfers Pursuant
to Regulation S
INDENTURE, dated as of December 15, 1999, between Inter*Act Operating
Co., Inc. (herein called the "Company"), a North Carolina corporation and wholly
owned subsidiary of Inter*Act (hereinafter defined), and State Street Bank and
Trust Company, a Massachusetts trust company, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
Inter*Act Electronic Marketing, Inc., a North Carolina corporation
("Inter*Act"), entered into a Purchase Agreement, dated as of July 30, 1996 (the
"Purchase Agreement"), between Inter*Act and the initial purchasers named
therein, pursuant to which Inter*Act sold and issued to such initial purchasers
142,000 units (the "Units"), each Unit consisting of one $1,000 principal amount
of 14% Senior Discount Notes due 2003 (the "Notes") and one warrant entitling
the holder thereof to purchase shares of Common Stock, no par value, of
Inter*Act (the "Common Stock") at an exercise price of $.01 per share.
The Company has duly authorized the creation of an issue of Senior
Pay-In-Kind Notes due 2003 (herein called the "Initial Securities") and Senior
Pay-In-Kind Notes due 2003 (the "Exchange Securities" and, together with the
Initial Securities, the "Securities"), 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.
Upon the issuance of the Exchange Securities, if any, or the
effectiveness of the Shelf Registration Statement (as defined herein), this
Indenture will be subject to the provisions of the Trust Indenture Act of 1939,
as amended, that are required to be part of this Indenture and shall, to the
extent applicable, be governed by such provisions.
Pursuant to the terms of that certain Exchange Offer and Consent
Solicitation Memorandum, dated as of December 9, 1999, and the consent and
letter of transmittal attached thereto (the "Letter of Transmittal"), the
Holders of Notes that have duly executed a Letter of Transmittal (each a
"Purchaser," and collectively, the "Purchasers") have agreed to tender and
exchange their respective Notes to Inter*Act, and the Company and Inter*Act have
agreed to issue and sell to such Purchasers in exchange for each $1,000
principal amount of such Notes (i) $500 principal amount of the Initial
Securities, (ii) one warrant (collectively, the "Warrants") entitling the holder
thereof to purchase shares of Common Stock from Inter*Act at an exercise price
of $.01 per share, subject to adjustment as provided in that certain Warrant
Agreement, dated as of December 15, 1999, between Inter*Act and American Stock
Transfer & Trust Company, as the warrant agent and (iii) one share of 14% Series
B Senior Mandatorily Convertible Preferred Stock, no par value, of Inter*Act
(the "New Preferred Stock"), with an initial liquidation preference of $500 plus
accrued and unpaid dividends thereon, which New Preferred Stock is convertible
into shares of Common Stock.
All things necessary have been done to make the Securities, 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.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
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) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States; 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.
"Acquired Indebtedness" means Indebtedness of a Person (a) existing at
the time such Person becomes a Restricted Subsidiary or (b) assumed in
connection with the acquisition of assets from such Person. Acquired
Indebtedness shall be deemed to be incurred on the date of the related
acquisition of assets from any Person or the date the acquired Person becomes a
Restricted Subsidiary.
"Act," when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Assets" means (i) any Property (other than cash, cash
equivalents or securities) to be owned by the Company or a Restricted Subsidiary
and used in a Related Business, (ii) the costs of improving or developing any
Property owned by the Company or a
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Restricted Subsidiary which is used in a Related Business and (iii) Investments
in any other Person engaged primarily in a Related Business (including the
acquisition from third parties of Capital Stock of such person) as a result of
which such other Person becomes a Wholly Owned Subsidiary or is merged or
consolidated with or into the Company or any Wholly Owned Subsidiary.
"Affiliate" of any specified Person means (i) any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person or (ii) any other Person who is a
director or executive officer (a) of such Person, (b) of any Subsidiary of such
specified Person or (c) of any person described in clause (i) above. 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. "Affiliate" shall also mean any
beneficial owner of shares representing 10% or more of the total voting power of
the Voting Stock (on a fully diluted basis) of the Company or of rights or
warrants to purchase such Voting Stock (whether or not currently exercisable)
and any Person who would be an Affiliate of any such beneficial owner pursuant
to the first sentence hereof.
"Asset Sale" means, with respect to any Person, any transfer,
conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger or a Sale and Leaseback
Transaction (collectively, a "transfer"), by such Person or any of its
Restricted Subsidiaries in any single transaction or series of transactions of
(a) any shares of Capital Stock or other ownership interests in another Person
(including, with respect to the Company and its Restricted Subsidiaries, Capital
Stock of Unrestricted Subsidiaries) or (b) any other Property of such Person or
any of its Restricted Subsidiaries; PROVIDED, HOWEVER, that the term "Asset
Sale" shall not include: (i) the sale or transfer of Temporary Cash Investments,
inventory, accounts receivable or other Property in the ordinary course of
business; (ii) the liquidation of Property received in settlement of debts owing
to such Person or any of its Restricted Subsidiaries as a result of foreclosure,
perfection or enforcement of any Lien or debt, which debts were owing to such
Person or any of its Restricted Subsidiaries in the ordinary course of business;
(iii) when used with respect to the Company, any asset disposition permitted
pursuant to Article Eight which constitutes a disposition of all or
substantially all of the Company's Property; (iv) the sale or transfer of any
Property by such Person of any of its Restricted Subsidiaries to such Person or
any of its Wholly Owned Subsidiaries; (v) a disposition in the form of a
Restricted Payment permitted to be made pursuant to Section 1010; (vi) any
Permitted Sale and Leaseback Transaction; or (vii) a disposition with a Fair
Market Value and a sale price of less than $500,000.
"Attributable Indebtedness" means indebtedness deemed to be incurred in
respect of a Sale and Leaseback Transaction (other than a Permitted Sale and
Leaseback Transaction) and shall be, at the date of determination, the present
value (discounted at the actual rate of interest implicit in such transaction,
compounded annually), of the total obligations of the
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lessee for rental payments during the remaining term of the lease included in
such Sale and Leaseback Transaction (including any period for which such lease
has been extended).
"Average Life" means, as of the date of determination, with respect to
any Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the
sum of the products of the number of years (rounded to the nearest one-twelfth
of one year) from the date of determination to the date or dates of each
successive scheduled principal payment (including, without limitation through a
mandatory redemption) of such Indebtedness or redemption or similar payment with
respect to such Preferred Stock multiplied by the amount of such principal
payment by (ii) the sum of all such payments.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary to have been duly adopted by the Board of
Directors, and to be in full force and effect on the date of such certification.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which banking institutions in New York City or in the city of the principal
Corporate Trust Office of the Trustee are not required to be open.
"Capital Lease Obligations" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with GAAP. For purposes of Section 1012, a Capital Lease Obligation shall be
deemed secured by a Lien on the property being leased.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, partnership interests, participations, rights in or other equivalents
(however designated) of corporate stock, partnership interests or any other
participation, right, warrant, option or other interest in the nature of an
equity interest in such Person, but excluding any debt security convertible or
exchangeable into such equity interest.
"Capital Stock Sale Proceeds" means the aggregate Net Cash Proceeds
received by the Company from the issue or sale (other than to a Subsidiary or an
employee stock ownership plan or trust established by the Company or any
Subsidiary) by the Company of any class of its Capital Stock (other than
Redeemable Stock) after the Issue Date.
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act or any successor provision to either of the
foregoing, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than one or more of the Permitted Holders is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of 40% or more of the total voting power of the Voting Stock (on
a fully diluted basis) of the Company or Inter*Act, as the case may be; (ii)
during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of the Company or Inter*Act, as
the case may be (together with any new
4
directors whose election by the Board of Directors of the Company or Inter*Act,
as the case may be, or whose nomination for election by the shareholders of the
Company was approved by a vote of 66-2/3% of the directors of the Company or
Inter*Act then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved), cease for any reason to constitute a majority of the Board of
Directors of the Company or Inter*Act, as the case may be, then in office, (iii)
the Company or Inter*Act consolidates or merges with or into any other Person
(other than with each other or with a Wholly Owned Subsidiary) with respect to
which less than a majority of the outstanding Voting Stock of the surviving or
consolidated corporation is held by stockholders of the corporation immediately
prior to such event or (iv) the Company sells, conveys, transfers or leases,
directly or indirectly, all or substantially all of its assets (other than a
transfer of such assets as an entirety or virtually as an entirety to a Wholly
Owned Subsidiary).
"Change of Control Offer" has the meaning provided in Section 1013.
"Change of Control Purchase Date" has the meaning provided in
Section 1013.
"Change of Control Purchase Price" has the meaning provided in
Section 1013.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, or, if at any time after the execution of this Indenture
such Commission is not existing and 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 heading of
this Indenture, until a successor Person shall have become such Person pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, any Vice
President, its Treasurer or an Assistant Treasurer, and delivered to the
Trustee.
"Consolidated Interest Expense" means, for any Person (or in the case
of the Company, Inter*Act, the Company and its Restricted Subsidiaries), for any
period, the amount of interest in respect of Indebtedness (excluding
amortization of original issue discount resulting from the allocation of a
portion of the Indebtedness from the offering attributable to the Warrants, but
including amortization of original issue discount in all other instances and
fees payable in connection with financings, including commitment, availability
and similar fees, and amortization of debt issuance costs, noncash interest
payments on any Indebtedness and the interest portion of any deferred payment
obligation and after taking into account the effect of elections made under, and
the net costs associated with, any Interest Rate Agreement, however denominated,
with respect to such Indebtedness), the amount of Redeemable Dividends, the
amount of Preferred Stock dividends in respect of all Preferred Stock of
Subsidiaries of such Person held other than by such Person or a Subsidiary of
such Person, commissions, discounts and other fees and charges owed with respect
to letters of
5
credit and bankers' acceptance financing, and the interest component of rentals
in respect of any Capital Lease Obligation or Sale and Leaseback Transaction
(other than a Permitted Sale and Leaseback Transaction) paid, accrued or
scheduled to be paid or accrued by such Person during such period, determined on
a consolidated basis in accordance with GAAP. For purposes of this definition,
interest on a Capital Lease Obligation or a Sale and Leaseback Transaction shall
be deemed to accrue at an interest rate reasonably determined by such Person to
be the rate of interest implicit in such Capital Lease Obligation or Sale and
Leaseback Transaction in accordance with GAAP consistently applied.
"Consolidated Leverage Ratio" is defined as the ratio of (i) the
outstanding Indebtedness of a Person and its Subsidiaries (or in the case of the
Company, its Restricted Subsidiaries) divided by (ii) the Pro Forma EBITDA of
such Person.
"Consolidated Net Income" of a Person means for any period, the net
income (loss) of such Person and its Subsidiaries; PROVIDED, HOWEVER, that there
shall not be included in such Consolidated Net Income (i) with respect to the
Company, any net income (loss) of any Person if such Person is not a Restricted
Subsidiary, except that (a) subject to the limitations contained in clause (iv)
below, the Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution to a Restricted Subsidiary, to the
limitations contained in clause (iii) below) and (b) the Company's equity in a
net loss of any such Person (other than an Unrestricted Subsidiary) for such
period shall be included in determining such Consolidated Net Income, (ii) any
net income (loss) of any Person acquired by such Person or a Subsidiary of such
Person in a pooling of interests transaction for any period prior to the date of
such acquisition, (iii) with respect to the Company, any net income (loss) of
any Restricted Subsidiary if such Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (a) subject to the limitations contained in clause (iv)
below, the Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another Restricted Subsidiary as
a dividend (subject, in the case of a dividend to another Restricted Subsidiary,
to the limitation contained in this clause) and (b) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income, (iv) any gain (but not loss) realized
upon the sale or other disposition of any Property of such Person or its
consolidated Subsidiaries (including pursuant to any Sale and Leaseback
Transaction) which is not sold or otherwise disposed of in the ordinary course
of business, (v) any extraordinary gain or loss and (vi) the cumulative effect
of a change in accounting principles.
"Corporate Trust Office" means the office of the Trustee, at which at
any particular time its corporate trust business shall be principally
administered, which office at the date of execution of this Indenture is located
at 000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx, 00000.
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"Cumulative EBITDA" means at any date of determination the cumulative
EBITDA of the Company and Inter*Act from and after the last day of the fiscal
quarter of the Company immediately preceding June 30, 1996 to the end of the
fiscal quarter immediately preceding the date of determination or, if such
cumulative EBITDA for such period is negative, the amount (expressed as a
negative number) by which such cumulative EBITDA is less than zero.
"Cumulative Interest Expense" means at any date of determination the
aggregate amount of Consolidated Interest Expense paid, accrued or scheduled to
be paid or accrued by Inter*Act, the Company and its Restricted Subsidiaries
from June 30, 1996 to the end of the fiscal quarter immediately preceding the
date of determination.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning provided in Section 309.
"Depositary" means, with respect to Securities issued in the form of
one or more Global Securities, The Depository Trust Company or another Person
designated as depositary by the Company, which must be a clearing agency
registered under the Exchange Act.
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions.
"EBITDA" means, for any Person, for any period, an amount equal to (A)
the sum of (i) Consolidated Net Income for such period, plus, to the extent
deducted in the calculation of Consolidated Net Income, (ii) the provision for
taxes for such period based on income or profits to the extent such income or
profits were included in computing Consolidated Net Income and any provision for
taxes utilized in computing net loss under clause (i) hereof, plus (iii)
Consolidated Interest Expense for such period, plus (iv) depreciation for such
period on a consolidated basis, plus (v) amortization of intangibles for such
period on a consolidated basis, plus (vi) any other non cash items reducing
Consolidated Net Income for such period, minus (B) all non-cash items increasing
Consolidated Net Income for such period, all for such Person and its
Subsidiaries determined in accordance with GAAP consistently applied, except
that with respect to the Company each of the foregoing items shall be determined
on a consolidated basis with respect to the Company and its Restricted
Subsidiaries only.
"Event of Default" has the meaning provided in Section 501.
"Excess Proceeds" has the meaning provided in Section 1014.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exchange Offer" means the exchange offer that may be effected pursuant
to the Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Exchange Securities" has the meaning stated in the second recital of
this Indenture and refers to any Exchange Securities containing terms
substantially identical to the Initial Securities (except that such Exchange
Securities shall not contain terms with respect to transfer restrictions) that
are issued and exchanged for the Initial Securities pursuant to the Registration
Rights Agreement and this Indenture.
"Fair Market Value" means, with respect to any asset or Property, the
price which could be negotiated in an arm's-length free market transaction, for
cash, between a willing seller and a willing buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair Market Value will
be determined, except as otherwise provided, (i) if such property or asset has a
Fair Market Value of less than $5 million, by any Officer of the Company or (ii)
if such property or asset has a Fair Market Value in excess of $5 million, by a
majority of the Board of Directors of the Company and evidenced by a Board
Resolution, dated within 30 days of the relevant transaction.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"GAAP" means United States generally accepted accounting principles as
in effect on the Issue Date, unless stated otherwise.
"Global Security" has the meaning provided in Section 201.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness of such other Person (whether arising by virtue of
partnership arrangements, or by agreements to keep well, to purchase assets,
goods, securities or services, to take-or-pay or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligation" of any Person means any obligation of such Person
pursuant to any Interest Rate Agreement, foreign exchange contract, currency
swap agreement, currency option or any other similar agreement or arrangement.
8
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"ILN Terminals" means the interactive terminals through which the
Company's Inter*Act Loyalty Network can be accessed in supermarkets and the
supporting network equipment and computer servers for such terminals along with
the component parts thereof.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by merger, conversion, exchange or
otherwise), extend, assume, Guarantee or become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "Incurrence," "Incurred," "Incurrable" and "incurring" shall
have meanings correlative to the foregoing); PROVIDED, HOWEVER, that a change in
GAAP that results in an obligation of such Person that exists at such time, and
is not theretofore classified as Indebtedness, becoming Indebtedness shall not
be deemed an Incurrence of such Indebtedness; PROVIDED FURTHER, HOWEVER, that
solely for purposes of determining compliance with Section 1008 amortization of
debt discount shall not be deemed to be the Incurrence of Indebtedness; PROVIDED
that in the case of Indebtedness sold at a discount, the amount of such
Indebtedness Incurred shall at all times be the aggregate principal amount at
Stated Maturity.
"Indebtedness" means (without duplication), with respect to any Person,
any indebtedness, secured or unsecured, contingent or otherwise, which is for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets of such Person or only to a portion thereof), or evidenced by bonds,
Securities, notes, debentures or similar instruments or representing the balance
deferred and unpaid of the purchase price of any property (excluding any
balances that constitute customer advance payments and deposits, accounts
payable or trade payables, and other accrued liabilities arising in the ordinary
course of business) if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, and shall also include, to the extent not otherwise included (i) any
Capital Lease Obligations, (ii) Indebtedness of other Persons secured by a Lien
to which the Property owned or held by such first Person is subject, whether or
not the obligation or obligation secured thereby shall have been assumed (the
amount of such Indebtedness being deemed to be the lesser of the value of such
property or assets or the amount of the Indebtedness so secured), (iii)
Guarantees of Indebtedness of other Persons, (iv) the maximum fixed repurchase
price of any Redeemable Stock (PROVIDED, HOWEVER, that Redeemable Stock of the
Company shall not constitute Indebtedness if such Redeemable Stock may not be
redeemed prior to the first anniversary of the Stated Maturity of the
Securities), (v) any Attributable Indebtedness, (vi) all reimbursement
obligations of such Person in respect of letters of credit, bankers' acceptances
or other similar instruments or credit transactions issued for the account of
such Person, (vii) in the case of the Company, the maximum fixed repurchase
price of Preferred Stock of its Restricted Subsidiaries and (viii) to the extent
not otherwise included in clauses (i) through (vii) of this paragraph, any
payment obligations of any such Person at the time of determination under any
Hedging Obligation. For purposes of this definition, the maximum fixed
repurchase price of any Redeemable Stock or Preferred Stock that does not have a
9
fixed repurchase price shall be calculated in accordance with the terms of such
Redeemable Stock or Preferred Stock as if such Redeemable Stock or Preferred
Stock were repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; PROVIDED, HOWEVER, that if such Redeemable
Stock or Preferred Stock is not then permitted to be repurchased, the repurchase
price shall be the book value of such Redeemable Stock or Preferred Stock. The
amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability of any contingent obligations in respect thereof at such date.
For purposes of this definition, the amount of the payment obligation with
respect to any Hedging Obligation shall be an amount equal to (i) zero, if such
obligation is an Interest Rate Obligation permitted pursuant to clause (vi) of
the second paragraph of Section 1008 or (ii) the notional amount of such Hedging
Obligation, if such Hedging Obligation is not an Interest Rate Agreement so
permitted.
"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.
"Initial Public Offering" means the first underwritten public offering
of Common Stock of Inter*Act, or any successor in interest thereof, pursuant to
an effective registration statement under the Securities Act, in which the
aggregate gross proceeds attributable to sales of shares of Common Stock covered
by such registration statement for the account of Inter*Act equals or exceeds
$30,000,000.
"Initial Securities" has the meaning provided in the recitals to this
Indenture.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Payment Date" means the date on which an installment of
interest on the Securities is due and payable.
"Interest Rate Agreement" means, for any Person, any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or other
similar agreement.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of any transfer
of cash or other Property to others or any payment for Property or services for
the account or use of others, or otherwise) to, or Incurrence of a Guarantee of
any obligation of, or purchase or acquisition or ownership by such Person of any
Capital Stock, bonds, notes, debentures or other securities or evidence of
Indebtedness issued or owned by, any other Person. In determining the amount of
any Investment made by transfer of any Property other than cash, such Property
shall be valued at its Fair Market Value at the time of such Investment.
10
"Investment Grade Rating" means both a rating equal to or higher than
Baa3 (or the equivalent) by Moody's and a rating equal to or higher than BBB-
(or the equivalent) by S & P.
"Issue Date" means the date on which the Initial Securities are
initially issued.
"Lien" means, with respect to any Property of any Person, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrances, preference,
priority, or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such Property (including any Capital
Lease Obligation, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing or any Sale and
Leaseback Transaction other than Permitted Sale and Leaseback Transactions).
"Maturity Date" means, with respect to any Security, the date on which
any principal of such Security becomes due and payable as therein or herein
provided, whether at the Stated Maturity with respect to such principal or by
declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor to
the rating agency business thereof.
"Net Available Cash" from an Asset Sale means cash payments received
therefrom (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to such Properties or assets or received in any other noncash form) in each case
net of all legal, title and recording tax expenses, commissions and other fees
and expenses incurred, and all Federal, state, provincial, foreign and local
taxes required to be accrued as a liability under GAAP, as a consequence of such
Asset Sale, and in each case net of all payments made on any Indebtedness which
is secured by any assets subject to such Asset Sale, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law be repaid out of the proceeds
from such Asset Sale, and net of all distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint ventures as a
result of such Asset Sale.
"Net Cash Proceeds" with respect to any issuance or sale of Capital
Stock means the cash proceeds of such issuance or sale, net of attorney's fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"New Preferred Stock" has the meaning provided in the recitals to
this Indenture.
11
"Non-U.S. Person" means a Person that is not a "U.S. person" as
defined in Regulation S.
"Offering Memorandum" means the Company's and Inter*Act's final
Exchange Offer and Consent Solicitation Memorandum, dated as of December 9,
1999, pursuant to which the Securities, New Preferred Stock and Warrants were
offered for sale in exchange for the Notes.
"Officer" means the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer or the Treasurer of the Company.
"Officers' Certificate" means a certificate signed by two Officers of
the Company, at least one of whom shall be the principal executive officer or
principal financial officer of the Company.
"Offshore Global Security" has the meaning provided in Section 201.
"Offshore Physical Security" has the meaning provided in Section 201.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be counsel to the Company or the
Trustee.
"Original Offering Memorandum" means Inter*Act's final Offering
Memorandum dated July 30, 1996, pursuant to which the Original Units were
offered for sale.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee
or delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose
payment or redemption money in the necessary amount has been
theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; PROVIDED
that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the Trustee has been made;
(iii) Securities which have been paid pursuant to
Section 308 or 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
12
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, consent,
notice or waiver hereunder, and for the purpose of making the
calculations required by TIA Section 316, 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 making
such calculation or 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 the pledgee's
right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other
obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium, if any)
or interest on any Securities on behalf of the Company.
"Permitted Holders" means (i) the descendants of Xxxxxxxx Xxxxxxxxxx,
Xx., their spouses, trusts, and corporations in which they have interests and
charitable organizations established by such descendants, (ii) AT&T Corporation
and its controlled Affiliates, (iii) Xxxxxxx X. Xxxxxxx, his lineal descendants,
and his or their current or former spouses, including widows or widowers (all
collectively referred to herein as the "LCH Family"), estates of, and trusts for
the benefit of, or created by, any member of the LCH Family, any partnerships,
foundations, philanthropic funds or other entities created by them, or created
for their benefit by another, and (iv) Xxxxxxx X. Xxxxxxx and Xxx X. Xxxxxxxxx,
their estates, spouses, ancestors, and lineal descendants, the legal
representatives of any of the foregoing and the trustee of any bona fide trust
of which the foregoing are the sole beneficiaries or the grantors, or any Person
of which the foregoing "beneficially owns" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act) voting securities representing at least 66-2/3% of the
total voting power of all classes of Capital Stock of such Person (exclusive of
any matters as to which class voting rights exist).
"Permitted Indebtedness" is defined to include any and all of the
following: (i) Indebtedness Incurred in an aggregate principal amount which,
when taken together with the principal amount of all other Indebtedness Incurred
pursuant to this clause (i) and then outstanding, does not exceed $25 million;
(ii) Indebtedness Incurred to finance the purchase or lease and installation
(including all associated capitalized costs) of ILN Terminals; PROVIDED,
HOWEVER, that the aggregate principal amount of such Indebtedness does not
exceed 100% of the Fair Market Value (on the date of such Incurrence) of the ILN
Terminals acquired; (iii) Indebtedness of the Company evidenced by the
Securities; (iv) Indebtedness of the Company owing to and held by a Wholly Owned
Subsidiary and Indebtedness of a Wholly Owned Subsidiary owing to and held by
the Company or any
13
Wholly Owned Subsidiary; PROVIDED, HOWEVER, that any event that results in any
such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to the Company or a Wholly
Owned Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the issuer thereof; (v) Indebtedness under Interest Rate
Agreements entered into for the purpose of limiting interest rate risks;
PROVIDED, HOWEVER, that the obligations under such agreements are related to
payment obligations of the Company in respect of Indebtedness otherwise
permitted by the terms of the covenant described hereunder; (vi) Indebtedness in
connection with one or more standby letters of credit or performance bonds
issued in the ordinary course of business or pursuant to self-insurance
obligations and not in connection with the borrowing of money or the obtaining
of advances or credit; and (vii) Permitted Refinancing Indebtedness Incurred in
respect of Indebtedness Incurred pursuant to clause (a) of the immediately
preceding paragraph and clauses (ii) and (iii) above.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in (i) a Wholly Owned Subsidiary or a Person which will,
upon the making of such Investment, become a Wholly Owned Subsidiary; PROVIDED,
HOWEVER, that such Person's primary business is a Related Business; (ii) another
Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Wholly Owned Subsidiary; PROVIDED, HOWEVER, that
such Person's primary business is a Related Business; (iii) Temporary Cash
Investments; (iv) receivables owing to the Company or any Restricted Subsidiary,
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; (v) payroll, travel and
similar advances to cover matters that are expected at the time of such advances
ultimately to be treated as expenses for accounting purposes and that are made
in the ordinary course of business; (vi) loans and advances to employees made in
the ordinary course of business consistent with past practice of the Company or
such Restricted Subsidiary, as the case may be; PROVIDED, HOWEVER, that such
loans and advances do not exceed $5 million at any one time outstanding; and
(vii) stock, obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Restricted
Subsidiary or in satisfaction of judgments.
"Permitted Liens" means (i) Liens on the Property of the Company or any
Restricted Subsidiary existing on the Issue Date; (ii) Liens on inventory,
accounts receivable and any ILN Terminals owned or leased, or cash held on the
Issue Date to secure Indebtedness permitted to be incurred under clause (i) of
the definition of "Permitted Indebtedness"; (iii) Liens on ILN Terminals
acquired or leased with the proceeds of Indebtedness permitted to be Incurred
under clause (ii) of "Permitted Indebtedness"; (iv) Liens on the Property of the
Company or any Restricted Subsidiary to secure any extension, renewal,
refinancing, replacement or refunding (or successive extensions, renewals,
refinancings, replacements or refundings), in whole or in part, of any
Indebtedness secured by Liens referred to in any of clauses (i), (ii), (iii),
(viii) or (xi); PROVIDED, HOWEVER, that any such Lien will be limited to all or
part of the same Property that secured the original Lien (plus improvements on
such Property) and the aggregate principal amount of Indebtedness that is
secured by such Lien will not be increased to an amount greater than the sum of
(A) the outstanding principal
14
amount, or, if greater, the committed amount, of the Indebtedness secured by
Liens described under clauses (i), (ii), (iii), (viii) or (xi) at the time the
original Lien became a Permitted Lien under the Indenture and (B) an amount
necessary to pay any premiums, fees and other expenses incurred by the Company
in connection with such refinancing, refunding, extension, renewal or
replacement; (v) Liens for taxes, assessments or governmental charges or levies
on the Property of the Company or any Restricted Subsidiary if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings; (vi) Liens imposed
by law, such as carriers', warehousemen's and mechanics' Liens and other similar
Liens on the Property of the Company or any Restricted Subsidiary arising in the
ordinary course of business and securing payment of obligations which are not
more than 60 days past due or are being contested in good faith and by
appropriate proceedings; (vii) Liens on the Property of the Company or any
Restricted Subsidiary Incurred in the ordinary course of business to secure
performance of obligations with respect to statutory or regulatory requirements,
performance or return-of-money bonds, surety bonds or other obligations of a
like nature and Incurred in a manner consistent with industry practice; (viii)
Liens on Property at the time the Company or any Restricted Subsidiary acquired
such Property, including any acquisition by means of a merger or consolidation
with or into the Company or any Restricted Subsidiary; PROVIDED, HOWEVER, that
such Lien shall not have been Incurred in anticipation of or in connection with
such transaction or series of related transactions pursuant to which such
Property was acquired by the Company or any Restricted Subsidiary; (ix) other
Liens on the Property of the Company or any Restricted Subsidiary incidental to
the conduct of their respective businesses or the ownership of their respective
Properties which were not created in connection with the Incurrence of
Indebtedness or the obtaining of advances or credit and which do not in the
aggregate materially detract from the value of their respective Properties or
materially impair the use thereof in the operation of their respective
businesses; (x) pledges or deposits by the Company or any Restricted Subsidiary
under workmen's compensation laws, unemployment insurance laws or similar
legislation, or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Indebtedness) or leases to which the Company or
any Restricted Subsidiary is party, or deposits to secure public or statutory
obligations of the Company, or deposits for the payment of rent, in each case
Incurred in the ordinary course of business; (xi) Liens on the Property of a
Person at the time such Person becomes a Restricted Subsidiary; PROVIDED,
HOWEVER, that any such Lien may not extend to any other Property of the Company
or any other Restricted Subsidiary which is not a direct Subsidiary of such
Person; PROVIDED FURTHER, HOWEVER, that any such Lien was not Incurred in
anticipation of or in connection with the transaction or series of related
transactions pursuant to which such Person became a Restricted Subsidiary; (xii)
utility easements, building restrictions and such other encumbrances or charges
against real property as are of a nature generally existing with respect to
properties of a similar character; or (xiii) Liens to secure Interest Rate
Agreements permitted to be incurred under clause (vi) of the definition of
"Permitted Indebtedness".
"Permitted Refinancing Indebtedness" means any renewals, extensions,
substitutions, refinancings or replacements of any Indebtedness, including any
successive extensions, renewals, substitutions, refinancings or replacements so
long as (i) the aggregate amount of Indebtedness represented thereby is not
increased by such renewal, extension, substitution,
15
refinancing or replacement (other than to finance fees and expenses associated
with such refinancing, including any premium and defeasance costs), (ii) the
Average Life of such Indebtedness is equal to or greater than the Average Life
of the Indebtedness being refinanced, (iii) the Stated Maturity of such
Indebtedness is no earlier than the Stated Maturity of the Indebtedness being
refinanced and (iv) the new Indebtedness shall not be senior in right of payment
to the Indebtedness that is being extended, renewed, substituted, refinanced or
replaced; PROVIDED, HOWEVER, that Permitted Refinancing Indebtedness shall not
include (a) Indebtedness of a Subsidiary that refinances Indebtedness of the
Company or (b) Indebtedness of the Company or a Restricted Subsidiary that
refinances Indebtedness of an Unrestricted Subsidiary.
"Permitted Sale and Leaseback Transactions" shall mean any Sale and
Leaseback Transaction covering ILN Terminals.
"Person" means any individual, corporation, company (including any
limited liability company), partnership, joint venture, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Physical Security" has the meaning provided in Section 201.
"PIK Notes" has the meaning provided in Section 301.
"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 308 in exchange for a mutilated
security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means any Capital Stock, including but not limited to
the New Preferred Stock, of a Person, however designated, which entitles the
holder thereof to a preference with respect to dividends, distributions or
liquidation proceeds of such Person over the holders of other Capital Stock
issued by such Person.
"Prepayment Offer" has the meaning provided in Section 1014.
"Prepayment Offer Notice" has the meaning provided in Section 1014.
"Private Placement Legend" has the meaning provided in Section 202.
"Pro Forma EBITDA" means, for any Person at any date of determination,
the EBITDA of such Person for the four most recent full fiscal quarters
preceding such date for which financial statements are available as determined
on a consolidated basis in accordance with GAAP consistently applied after
giving effect to the following: (i) if, during or after such period, such Person
or any of its Subsidiaries shall have made any disposition of any Person or
business, Pro Forma EBITDA of such Person and its Subsidiaries shall be
16
computed so as to give pro forma effect to such disposition and (ii) if, during
or after such period, such Person or any of its Subsidiaries completes an
acquisition of any Person or business which immediately after such acquisition
is a Subsidiary of such Person or whose assets are held directly by such Person
or a Subsidiary of such Person, Pro Forma EBITDA shall be computed so as to give
pro forma effect to the acquisition of such Person or business; PROVIDED,
HOWEVER, that, with respect to the Company, all of the foregoing references to
"Subsidiary" or "Subsidiaries" shall be deemed to refer only to the "Restricted
Subsidiaries" of the Company.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in, and
other securities of, any other Person (but excluding Capital Stock or other
securities issued by such first mentioned Person).
"Purchase Agreement" has the meaning provided in the recitals to this
Indenture.
"Purchase Date" has the meaning provided in Section 1014.
"Purchasers" has the meaning provided in the recitals to this
Indenture.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A.
"Redeemable Dividend" means, for any dividend with regard to Redeemable
Stock, the quotient of the dividend divided by the difference between one and
the maximum statutory Federal income tax rate (expressed as a decimal number
between 1 and 0) then applicable to the issuer of such Redeemable Stock.
"Redeemable Stock" means, with respect to any person, any Capital Stock
that by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or otherwise (i) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (ii) is or may
become redeemable or repurchasable at the option of the holder thereof, in whole
or in part, or (iii) is convertible or exchangeable for Indebtedness.
"Redemption Date," when used with respect to any Security to be
redeemed, in whole or in part, 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.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement between the Company and the Purchasers named therein, dated as
of December 15, 1999, relating to the Securities.
17
"Registration Statement" means the Registration Statement as defined
in the Registration Rights Agreement.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the January 15 or July 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Related Business" means any business related to the consumer product
promotion business (including any interactive, multi-media and
telecommunications aspects thereof).
"Responsible Officer," when used with respect to the Trustee, means any
officer of the Trustee employed within the corporate trust administration
department, including any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer, any trust officer or assistant
trust officer or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Restricted Payment" means (i) any dividend or distribution (whether
made in cash, Property or securities) declared or paid on or with respect to any
shares of Capital Stock of the Company or Capital Stock of any Restricted
Subsidiary except for any dividend or distribution which is made solely to the
Company or a Restricted Subsidiary (and, if such Restricted Subsidiary is not a
Wholly Owned Subsidiary, to the other shareholders of such Restricted Subsidiary
on a pro rata basis) or dividends or distributions payable solely in shares of
Capital Stock (other than Redeemable Stock) of the Company; (ii) a payment made
by the Company or any Restricted Subsidiary to purchase, redeem, acquire or
retire any Capital Stock of the Company of Capital Stock of any Affiliate of the
Company (other than a Restricted Subsidiary) of any warrants, rights or options
to directly or indirectly purchase or acquire any such Capital Stock or any
securities exchangeable for or convertible into any such Capital Stock; (iii) a
payment made by the Company or any Restricted Subsidiary to redeem, repurchase,
defease or otherwise acquire or retire for value, prior to any scheduled
maturity, scheduled sinking fund or mandatory redemption payment (other than the
purchase, repurchase, or other acquisition of any Indebtedness subordinate in
right of payment to the Securities purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition), Indebtedness of the Company
which is subordinate (whether pursuant to its terms or by operation of law) in
right of payment to the Securities; (iv) an Investment (other than Permitted
Investments) in any Person; or (v) any Restricted Payment (as such term is
defined in the Indenture, dated as of August 1, 1996, between Inter*Act and
Fleet National Bank) made after August 1, 1996 and before the Issue Date.
"Restricted Subsidiary" means (i) any Subsidiary of the Company as of
and after the Issue Date unless such Subsidiary shall have been designated an
Unrestricted Subsidiary as
18
permitted or required pursuant to the definition of "Unrestricted Subsidiary"
and (ii) an Unrestricted Subsidiary which is redesignated as a Restricted
Subsidiary as permitted pursuant to the definition of "Unrestricted Subsidiary."
"Rule 144A" means Rule 144A under the Securities Act.
"Sale and Leaseback Transaction" means with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold or transferred
by such Person or a Subsidiary of such Person and is thereafter leased back from
the purchaser or transferee thereof by such Person or one of its Subsidiaries.
"S&P" means Standard and Poor's Ratings Group, or any successor to the
rating agency business thereof.
"Secured Indebtedness" means Indebtedness of the Company secured by
property or assets of the Company or any Restricted Subsidiary.
"Securities" has the meaning stated in the second recital of this
Indenture, and more particularly means any Securities authenticated and
delivered under this Indenture, and such term shall also specifically include
the PIK Notes from and after the Interest Payment Date pursuant to which such
PIK Notes are to be issued.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" means, with respect to any Indebtedness, the date
specified in such Indebtedness as the fixed date on which the principal of such
Indebtedness is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
Indebtedness at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Indebtedness" means Indebtedness of the Company that is
expressly subordinated in right of payment to the Securities.
"Subsidiary" of any specified Person means any corporation,
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which at least 50% of the total voting power of
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the Voting Stock is held by such first-named Person or any of its Subsidiaries
and such first-named Person or any of its Subsidiaries has the power to direct
the management, policies and affairs thereof; or (ii) in the case of a
partnership, joint venture, association, or other business entity, with respect
to which such first-named Person or any of its Subsidiaries has the power to
direct or cause the direction of the management and policies of such entity by
contract or otherwise if in accordance with generally accepted accounting
principles such entity is consolidated with the first-named Person for financial
statement purposes.
"Temporary Cash Investments" means any of the following: (i)
Investments in U.S. Government Obligations maturing within 90 days of the date
of acquisition thereof, (ii) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 90 days of the date of
acquisition thereof issued by a bank or trust company which is organized under
the laws of the United States of America or any state thereof having capital,
surplus and undivided profits aggregating in excess of $500,000,000 and whose
long-term debt is rated "A-3" or "A-" or higher according to Xxxxx'x or S & P
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the Securities
Act)), (iii) repurchase obligations with a note of not more than 7 days for
underlying securities of the types described in clause (i) entered into with a
bank meeting the qualifications described in clause (ii) above, and (iv)
Investments in commercial paper, maturing not more than 90 days after the date
of acquisition, issued by a corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United States of America with a
rating at the time as of which any Investment therein is made of "P-1" (or
higher) according to Xxxxx'x or "A-1" (or higher) according to S & P (or such
similar equivalent rating by at least one "nationally recognized statistical
rating organization" (as defined in Rule 436 under the Securities Act)).
"Trust Indenture Act" or "TIA" (except as provided in Section 905)
means the Trust Indenture Act of 1939 as in force at the date as of which this
Indenture is executed and, to the extent required by law, as amended.
"Trustee" means the Person named as the "Trustee" in the heading of
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Units" has the meaning provided in the recitals to this Indenture.
"Unrestricted Subsidiary" means (a) any Subsidiary of the Company in
existence on the Issue Date that is not a Restricted Subsidiary and (b) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Subsidiary or any Restricted Subsidiary (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary so long as
(i) the Subsidiary to be so designated does not own any Capital Stock or
Indebtedness of, or own or hold any Lien on any Property of the Company or any
other Restricted Subsidiary, (ii) the Subsidiary to be so designated is not
obligated under any Indebtedness or other obligation that, if in default, would
result (with the passage of time or notice or otherwise) in a default on any
Indebtedness of the Company or any Restricted Subsidiary and (iii) either (A)
the Subsidiary to be so designated has total assets of
20
$1,000 or less or (B) such designation is effective immediately upon such entity
becoming a Subsidiary of the Company or any Restricted Subsidiary. Unless so
designated as an Unrestricted Subsidiary, any Person that becomes a Subsidiary
of the Company or of any Restricted Subsidiary will be classified as a
Restricted Subsidiary; PROVIDED, HOWEVER, that such Subsidiary shall not be
designated a Restricted Subsidiary and shall be automatically classified as an
Unrestricted Subsidiary if the Company would be unable to Incur at least $1.00
of additional Indebtedness pursuant to clause (a) of Section 1008. Except as
provided in the second sentence of this paragraph, no Restricted Subsidiary may
be redesignated as an Unrestricted Subsidiary. The Company's Board of Directors
may designate any Unrestricted Subsidiary to be a Restricted Subsidiary if,
immediately after giving pro forma effect to such designation, (x) the Company
could incur at least $1.00 of additional Indebtedness pursuant to clause (a) of
Section 1008 and (y) no Default or Event of Default shall have occurred and be
continuing or would result therefrom. Any such designation by the Company's
Board of Directors will be evidenced to the Trustee by filing with the Trustee a
copy of the Board Resolution giving effect to such designation and an Officers'
Certificate certifying (i) that such designation complies with the foregoing
provisions and (ii) giving the effective date of such designation, such filing
with the Trustee to occur within 75 days after the end of the fiscal quarter of
the Company in which such designation is made (or in the case of a designation
made during the last fiscal quarter of the Company's fiscal year, within 120
days after the end of such fiscal year).
"U.S. Global Security" has the meaning provided in Section 201.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable.
"U.S. Person" has the meaning provided in Regulation S.
"U.S. Physical Security" has the meaning provided in Section 201.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Voting Stock" means all classes of Capital Stock of such corporation
then outstanding and normally entitled to vote in the election of directors.
"Warrant Agreement" has the meaning provided in the recitals to this
Indenture.
"Warrants" have the meaning provided in the recitals to this Indenture.
"Wholly Owned Subsidiary" means a Restricted Subsidiary, all the
Capital Stock of which (other than directors' qualifying shares and shares held
by other Persons to the extent such shares are required by applicable law to be
held by a Person other than the Company or
21
a Restricted Subsidiary) is owned by the Company or one or more Wholly Owned
Subsidiaries.
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 an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture (including any covenant 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 (other than pursuant to
Section 1006(a)) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, 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 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 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 his certificate
22
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 officer or officers 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 agents duly
appointed in writing; and, except as herein 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 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 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 by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that the Trustee deems sufficient.
(c) The principal amount and serial numbers of Securities held
by any Person, and the date of holding the same, shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders of
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Such record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If
23
such a record date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such record
date shall be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of Outstanding Securities have authorized or
agreed or consented to such request, demand, authorization, direction, notice,
consent, waiver or other Act, and for that purpose the Outstanding Securities
shall be computed as of such record date; PROVIDED that no such authorization,
agreement or consent by the Holders on such record date shall be deemed
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than 120 days after the record date.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, Etc., 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,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust
Office, Attention: Corporate Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the heading of this Indenture, 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 of any event to Holders by the
Company or the Trustee, 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 his 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 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
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice. Where this Indenture provides for notice in
24
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 or irregularities in regular
mail service or by reason of any other cause, it shall be impracticable to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice for every purpose hereunder.
SECTION 107. 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 108. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 109. 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 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Paying Agent, any
Securities Registrar and their successors hereunder and the Holders, any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the law of the State of New York. Upon the issuance of the
Exchange Securities or the effectiveness of the Shelf Registration Statement,
this Indenture shall be subject to the provisions of the Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions; and, if and to the extent that any
provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture which is required to be included in this
Indenture by any of Sections 310 to 318, inclusive, of the Trust Indenture Act,
such required provision shall control.
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SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, or
Maturity Date of any Security shall not be a Business Day, then (notwithstanding
any other provision of this Indenture or of the Securities) payment of principal
(or premium, if any) or interest 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, Redemption Date, or at the Stated Maturity or
Maturity; PROVIDED that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Maturity Date, as the case
may be.
ARTICLE II
SECURITY FORMS
SECTION 201. Forms Generally.
The definitive Securities shall be typed, printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form annexed hereto as Exhibit A. The Securities may have
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by this Indenture and may have such letters,
notations, numbers or other marks of identification and such legends or
endorsements placed thereon as the Company may deem appropriate (and as are not
prohibited by the terms of this Indenture) or as may be required or appropriate
to comply with any law or with any rules made pursuant thereto or with any rules
of any securities exchange on which such Securities may be listed, or to conform
to general usage, or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of such
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 Company shall approve the form of the Securities and any notation,
legend or endorsement on the Securities. Each Security shall be dated the date
of its authentication.
The terms and provisions contained in the form of the Securities
annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a
part of this Indenture. Each of the Company and the Trustee, by its execution
and delivery of this Indenture, expressly agrees to the terms and provisions of
the Securities applicable to it and to be bound thereby.
Initial Securities shall be issued in the form of a single permanent
global Security in registered form, substantially in the form set forth in
Exhibit A (the "U.S. Global Security"), deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount at maturity of
the U.S. Global Security may from time to time be increased or decreased by
26
adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold in offshore transactions in
reliance on Regulation S shall be issued in the form of a single global
Security, initially in temporary form and after the Private Placement Legend is
no longer required pursuant to Section 202, in permanent global form, in each
case in registered form substantially in the form set forth in Exhibit A (the
"Offshore Global Security") deposited with the Trustee, as custodian for the
Depositary, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount at maturity of the Offshore
Global Security may from time to time be increased or decreased by adjustments
made in the records of the Trustee, as custodian for the Depositary or its
nominee, as herein provided.
Initial Securities which are offered and sold to Institutional
Accredited Investors which are not QIBs (excluding Non-U.S. Persons) shall be
issued in the form of permanent certificated Securities in registered form in
substantially the form set forth in Exhibit A (the "U.S. Physical Securities").
Securities issued pursuant to Section 306 in exchange for interests in the U.S.
Global Security or the Offshore Global Security shall be in the form of U.S.
Physical Securities or in the form of permanent certificated Securities in
registered form substantially in the form set forth in Exhibit A (the "Offshore
Physical Securities"), respectively.
The Offshore Physical Securities and U.S. Physical Securities are
sometimes collectively herein referred to as the "Physical Securities." The
U.S. Global Security and the Offshore Global Security are sometimes
collectively referred to as the "Global Securities."
SECTION 202. Restrictive Legends.
Unless and until (i) an Initial Security is sold under an effective
Registration Statement or (ii) an Initial Security is exchanged for an Exchange
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement, (A) each U.S. Global Security and
each U.S. Physical Security shall bear the following legend set forth below (the
"Private Placement Legend") on the face thereof and (B) the Offshore Physical
Securities and the Offshore Global Security shall bear the legend set forth
below on the face thereof until at least 1 year after the Issue Date. THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY, OR ANY AFFILIATE OF THE COMPANY, WAS THE OWNER OF THIS
SECURITY (OR ANY
27
PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN
INSTITUTIONAL, "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
"ACCREDITED INVESTOR", FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (ii) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE.
Each Global Security, whether or not an Initial Security, shall also
bear the following legend on the face thereof: UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO DTC OR NOMINEES OF DTC OR TO A SUCCESSOR OF DTC OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTIONS 306 AND 307 OF THE INDENTURE.
28
ARTICLE III
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount at final maturity of Securities which
may be authenticated and delivered under this Indenture is limited to
$70,000,000, plus the amount of any PIK Notes (as hereafter defined) issued
hereunder, except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 304, 305, 308, 906, 1013, 1014 or 1108.
The Initial Securities shall be known and designated as the "Senior
Pay-In-Kind Notes due 2003" and the Exchange Securities shall be known and
designated as the "Senior Pay-In-Kind Notes due 2003," in each case of the
Company. Their Stated Maturity shall be August 1, 2003 and, except as may be
otherwise provided for in the Securities, they shall bear interest, until the
principal thereof is paid or duly provided for, at the rate of 14% per annum
from and after August 1, 1999, or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, payable beginning on February
1, 2000 and semi-annually thereafter on August 1 and February 1 in each year and
at said Stated Maturity. Interest shall be payable in cash; PROVIDED, HOWEVER,
that the Company may at its option pay interest in kind on the Securities by the
issuance of one or more promissory notes therefor (each a "PIK Note," and
collectively the "PIK Notes"), with the same terms, including date of maturity
and interest rate, as the Senior Pay-In-Kind Notes, to each Holder registered in
the Security Register at the close of business on the preceding January 15 or
July 15, as the case may be; PROVIDED FURTHER, HOWEVER, that upon the first
Interest Payment Date immediately following the date that is eighteen (18)
months after (i) the consummation of an Initial Public Offering or (ii) a Change
in Control, then and thereafter interest shall be payable only in cash. PIK
Notes shall be deemed to have been issued by the Company, and it obligations
thereunder shall commence, as of the applicable Interest Payment Date,
irrespective of the actual date of execution and delivery of the PIK Notes, and
shall be deemed to be included within the term "Securities" for all purposes of
this Agreement as of such Interest Payment Date.
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose; PROVIDED, HOWEVER, that, at the
option of the Company, interest that is payable in cash pursuant to the terms
hereof may be paid by check mailed to addresses of the Persons entitled thereto
as such addresses shall appear on the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
29
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $500 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman, its President or a Vice President, under its corporate seal reproduced
thereon. The signature of any of these officers on the Securities may be manual
or facsimile signatures of the present or any future such authorized officer and
may be imprinted or otherwise reproduced on the Securities. The seal of the
Company, if any, may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. In addition, any Security may
be signed on behalf of the Company by such Persons as, at the actual date of the
execution of such Security, shall be the proper officers of the Company,
although at the date of such Security or of the execution of this Indenture any
such Person was not such officer.
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.
Each Security shall be dated the date of its 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 herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture.
In case the Company, pursuant to Article Eight, shall be consolidated
or merged with or into any other Person or shall convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety to
any Person, and the successor Person resulting from such consolidation, or
surviving such merger, or into which the Company shall have been merged, or the
Person which shall have received a conveyance, transfer, lease or other
disposition 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, transfer, lease or
other disposition may, from time
30
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 at maturity; and the Trustee, upon Company Request 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 the 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 the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such name.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 1002,
without charge to the Holder (except as provided in Section 305). Upon surrender
for cancellation of any one or more temporary Securities, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount at maturity of definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall keep or 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 1002 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 and exchanges of Securities. The
Security Register shall be in written form or any other form capable of being
converted into written form within a reasonable time. At all reasonable times,
the Security Register shall be open to inspection by the Trustee. The Trustee is
hereby initially appointed as security registrar (the "Security Registrar") for
the purpose of registering Securities and transfers and exchanges of Securities
as herein provided.
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Upon surrender for registration of transfer of any Security at the
Corporate Trust Office of the Trustee or the office or agency of the Company
designated pursuant to Section 1002, the Company 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 maturity.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination and of a like aggregate principal
amount at maturity, upon surrender of the Securities to be exchanged at the
Corporate Trust Office of the Trustee or 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; PROVIDED that no exchange of Initial
Securities for Exchange Securities shall occur until an Exchange Offer
Registration Statement shall have been declared effective by the Commission and
that the Initial Securities to be exchanged for the Exchange Securities shall be
cancelled by the Trustee.
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 shall (if so required by the Company) 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 his
attorney duly authorized in writing.
No service charge shall be payable by the Holders 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 that
may be imposed in connection with any registration of transfer or exchange of
Securities, other than transfer taxes and similar charges with respect to
exchanges pursuant to Section 304, 906, 1013, 1014 or 1108 not involving any
transfer.
The Company shall not be required (i) to issue or register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the selection of Securities to be redeemed under Section 1104 and
ending at the close of business on the day of mailing of the relevant notice of
redemption, or (ii) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
SECTION 306. Book-Entry Provisions for Global Securities.
(a) The U.S. Global Security and Offshore Global Security
shall (i) be registered in the name of the Depositary for such Global
Securities or the nominee of such
32
Depositary, (ii) be delivered to the Trustee as custodian for such Depositary
and (iii) bear legends as set forth in Section 202.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under any
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial ownership of any Security.
(b) Transfers of a Global Security shall be limited to
transfers of such Global Security in whole, but not in part, to the Depositary,
its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the applicable rules and
procedures of the Depositary and the provisions of Section 307. In addition,
U.S. Physical Securities or Offshore Physical Securities shall be transferred to
all beneficial owners in exchange for their beneficial interests in the U.S.
Global Security or the Offshore Global Security, respectively, if (i) the
Depositary notifies the Company that it is unwilling or unable to continue as
Depositary for the U.S. Global Security or the Offshore Global Security, as the
case may be, or the Depositary ceases to be a "Clearing Agency" registered under
the Exchange Act and a successor depositary is not appointed by the Company
within 90 days or (ii) an Event of Default has occurred and Holders of more than
25% in aggregate principal amount of the Securities at the time outstanding
represented by the Global Securities advise the Trustee through the Depositary
in writing that the continuation of a book-entry system through the Depositary
with respect to the Global Securities is no longer required.
(c) Any beneficial interest in one of the Global Securities
that is transferred to a person who takes delivery in the form of an interest in
the other Global Security will, upon transfer, cease to be an interest in such
Global Security and become an interest in the other Global Security and,
accordingly, will thereafter be subject to all transfer restrictions, if any,
and other procedures applicable to beneficial interests in such other Global
Security for as long as it remains such an interest.
(d) In connection with any transfer pursuant to paragraph (b)
of this Section of a portion of the beneficial interests in the U.S. Global
Security to beneficial owners who are required to hold U.S. Physical Securities,
the Registrar shall reflect on its books and records the date and a decrease in
the principal amount at maturity of the U.S. Global Security in an amount equal
to the principal amount at maturity of the beneficial interest in the U.S.
Global Security to be transferred, and the Company shall execute, and the
Trustee shall authenticate and deliver, one or more U.S. Physical Securities of
like tenor and amount.
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(e) In connection with the transfer of the entire U.S. Global
Security or Offshore Global Security to beneficial owners pursuant to paragraph
(b) of this Section, the U.S. Global Security or Offshore Global Security, as
the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the U.S. Global Security or Offshore Global
Security, as the case may be, an equal aggregate principal amount at maturity of
U.S. Physical Securities or Offshore Physical Securities, as the case may be, of
authorized denominations.
(f) Any U.S. Physical Security delivered in exchange for an
interest in the U.S. Global Security pursuant to paragraph (b) or (d) of this
Section shall, except as otherwise provided by paragraph (a)(i)(x) or paragraph
(e) of Section 307, bear the legend regarding transfer restrictions applicable
to the U.S. Physical Security set forth in Section 202.
(g) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
(h) Beneficial owners of interests in a Global Security may
receive Physical Securities (which shall bear the Private Placement Legend if
required by Section 202) in accordance with the procedures of the Depositary. In
connection with the execution, authentication and delivery of such Physical
Securities, the Registrar shall reflect on its books and records a decrease in
the principal amount at maturity of the relevant Global Security equal to the
principal amount at maturity of such Physical Securities and the Company shall
execute and the Trustee shall authenticate and deliver one or more Physical
Securities having an equal aggregate principal amount at maturity.
SECTION 307. Special Transfer Provisions. Unless and until (i) an
Initial Security is sold under an effective Registration Statement (as certified
to the Trustee by the Company), or (ii) an Initial Security is exchanged for an
Exchange Security in connection with an effective Registration Statement, in
each case pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors.
The following provisions shall apply with respect to the registration of any
proposed transfer of an Initial Security to any Institutional Accredited
Investor which is not a QIB (excluding Non-U.S.
Persons):
(i) The Registrar shall register the transfer of any
Security, whether or not such Security bears the Private Placement
Legend, if (x) the requested transfer is at least two years after the
original issue date of the Initial Securities or (y) the proposed
transferee has delivered to the Registrar a certificate substantially
in the form of Exhibit C hereto.
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(ii) If the proposed transferor is an Agent Member
holding a beneficial interest in the U.S. Global Security, upon receipt
by the Registrar of (x) the documents, if any, required by paragraph
(i), and (y) instructions given in accordance with the Depositary's and
the Registrar's procedures therefor, the Registrar shall reflect on its
books and records the date and a decrease in the principal amount of
the U.S. Global Security in an amount equal to the principal amount of
the beneficial interest in the U.S. Global Security to be transferred,
and the Company shall execute, and the Trustee shall authenticate and
deliver, one or more U.S. Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a U.S. Physical
Security or an interest in the U.S. Global Security to a QIB (excluding Non-U.S.
Persons):
(i) If the Security to be transferred consists of (x)
U.S. Physical Securities, the Security Registrar shall register the
transfer if such transfer is being made by a proposed transferor who
has checked the box provided for on the form of Initial Security
stating, or has otherwise advised the Company and the Security
Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Initial Security stating, or
has otherwise advised the Company and the Security Registrar in
writing, that it is purchasing the Initial Security for its own account
or an account with respect to which it exercises sole investment
discretion and that it and any such account is a QIB within the meaning
of Rule 144A, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such
information regarding the Company as it has requested pursuant to Rule
144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations
in order to claim the exemption from registration provided by Rule 144A
or (y) an interest in the U.S. Global Security, the transfer of such
interest may be effected only through the book-entry system maintained
by the Depositary.
(ii) If the proposed transferee is an Agent Member,
and the Security to be transferred consists of U.S. Physical
Securities, upon receipt by the Security Registrar of the documents
referred to in clause (i) and instructions given in accordance with the
Depositary's and the Security Registrar's procedures, the Security
Registrar shall reflect on its books and records the date and an
increase in the principal amount at maturity of the U.S. Global
Security in an amount equal to the principal amount at maturity of the
U.S. Physical Securities to be transferred, and the Trustee shall
cancel the Physical Securities so transferred.
(c) Transfers of Interests in the Offshore Global Security or
Offshore Physical Securities to U.S. Persons. The following provisions shall
apply with respect to any transfer of interests in the Offshore Global Security
or Offshore Physical Securities to U.S. Persons:
35
(i) prior to the removal of the Private Placement
Legend from the Offshore Global Security or Offshore Physical
Securities pursuant to Section 202, the Security Registrar shall refuse
to register such transfer; and
(ii) after such removal, the Security Registrar shall
register the transfer of any such Security without requiring any
additional certification.
(d) Transfers to Non-U.S. Persons at Any Time. The following
provisions shall apply with respect to any transfer of an Initial Security to a
Non-U.S. Person:
(i) The Security Registrar shall register any
proposed transfer to any Non-U.S. Person if the Security to be
transferred is a U.S. Physical Security or an interest in the U.S.
Global Security only upon receipt of a certificate substantially in the
form of Exhibit D from the proposed transferor.
(ii) (x) If the proposed transferee is an Agent
Member holding a beneficial interest in the U.S. Global Security, upon
receipt by the Security Registrar of (1) the documents required by
paragraph (i) and (2) instructions in accordance with the Depositary's
and the Security Registrar's procedures, the Security Registrar shall
reflect on its books and records the date and a decrease in the
principal amount at maturity of the U.S. Global Security in an amount
equal to the principal amount at maturity of the beneficial interest in
the U.S. Global Security to be transferred, and (y) if the proposed
transferee is an Agent Member, upon receipt by the Security Registrar
of instructions given in accordance with the Depositary's and the
Security Registrar's procedures, the Security Registrar shall reflect
on its books and records the date and an increase in the principal
amount at maturity of the Offshore Global Security in an amount equal
to the principal amount at maturity of the U.S. Physical Security or
the U.S. Global Security, as the case may be, to be transferred, and
the Trustee shall cancel the Physical Security, if any, so transferred
or decrease the amount of the U.S. Global Security.
(e) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the Security
Registrar shall deliver Securities that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Security Registrar shall deliver only Securities
that bear the Private Placement Legend unless either (i) the Private Placement
Legend is no longer required by Section 202 or (ii) there is delivered to the
Security Registrar an Opinion of Counsel reasonably satisfactory to the Company
and the Trustee to the effect that neither such Legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(f) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of, or beneficial owner of an interest in,
such Security acknowledges the restrictions on transfer of such Security set
forth in this Indenture and in the Private Placement Legend and agrees that it
will transfer such Security only as provided in this Indenture. The Security
Registrar shall not register a transfer of any Security unless
36
such transfer complies with the requirements of this Section 307. In connection
with any transfer of Securities to an Institutional Accredited Investor, each
such Holder or beneficial owner agrees by its acceptance of the Securities to
furnish the Security Registrar or the Company such certifications, legal
opinions or other information as such Person may reasonably require to confirm
that such transfer is being made pursuant to an exemption from, or a transaction
not subject to, the registration requirements of the Securities Act; PROVIDED
that the Security Registrar shall not be required to determine (but may rely on
a determination made by the Company with respect to) the sufficiency of any such
certifications, legal opinions or other information. The Security Registrar's
only obligation to enforce the transfer restrictions of this Indenture shall be
to require the certifications and opinions specifically required by this Section
307 as a condition to transfer.
Every replacement Security is an additional obligation of the Company
and shall be entitled to the benefits of this Indenture.
SECTION 308. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee, or (ii)
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 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 Company Order 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 new Security of like tenor, form, terms
and principal amount, bearing a number not contemporaneously Outstanding.
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 new Security, pay or authorize the payment of such
Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
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.
All Securities shall be held and owned upon the express condition that
the foregoing provisions of this Section are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities and
shall preclude any and all other rights or remedies, notwithstanding any law or
statute existing or hereinafter enacted to the contrary
37
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
SECTION 309. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name such Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest at the
office or agency of the Company maintained for such purpose pursuant to Section
1002; PROVIDED, HOWEVER, that to the extent such interest payment is payable in
cash, each installment of interest may at the Company's option be paid by (i)
mailing a check for such interest, payable to or upon the written order of the
Person entitled thereto pursuant to Section 310, to the address of such Person
as it appears in the Security Register at the close of business on the Regular
Record Date for such interest payment or (ii) transfer to an account located in
the United States maintained by the payee the details of which account are
notified to the Security Registrar prior to the close of business on the Record
Date for such interest payment.
Any interest on any Security which is payable in cash, but is not
punctually paid or duly provided for, on any Interest Payment Date shall
forthwith cease to be payable to the Holder on the Regular Record Date by virtue
of having been such Holder, and such defaulted interest and (to the extent
lawful) interest on such defaulted interest at the rate borne by the Securities
(such defaulted interest and interest thereon herein collectively called
"Defaulted Interest") may be paid by the Company, at its election in each case,
as provided in clause (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 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 to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 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, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
given in the manner provided for in Section 106, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so given,
38
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 clause (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
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 310. Persons Deemed Owners.
Prior to the due presentment of a 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 such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 305 and 309) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and none
of the Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 311. 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 may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. 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 by the Trustee in accordance with its customary
procedures and certification of their disposal delivered to the Company unless
by Company Order the Company shall direct that cancelled Securities be returned
to it.
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SECTION 312. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of 12 30-day months.
SECTION 313. Wire Transfers.
Notwithstanding any other provision to the contrary in this Indenture,
the Company may make any payment of monies required to be deposited with the
Trustee on account of principal of, or premium, if any, or interest on, the
Securities (whether pursuant to optional or mandatory redemption payments,
interest payments or otherwise) by wire transfer in immediately available funds
to an account designated by the Trustee on or before 10:00 a.m. (New York City
time) the date such monies are to be paid to the Holders of the Securities in
accordance with the terms hereof.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights and obligations of the Trustee expressly provided
for in this Indenture and the surviving rights of registration of transfer or
exchange of Securities expressly provided for herein or pursuant hereto) and the
Trustee, at the direction and expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(1) either
(a) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 308 and (ii) Securities for whose
payment money has theretofore been deposited in trust with the
Trustee or any Paying Agent or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(b) all such Securities not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
40
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company, and the Company, in the case of (i), (ii) or
(iii) above, has irrevocably deposited or caused to
be deposited with the Trustee as trust funds in trust
for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for
cancellation, for principal of (and premium, if any)
and interest to the date of such deposit (in the case
of Securities which have become due and payable) or
to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law. So long as no Event of Default shall have occurred and
be continuing, all interest allowed on any such moneys shall be paid from time
to time to the Company upon a Company Order.
ARTICLE V
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
41
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):
(1) failure to make the payment of any principal of or
premium, if any, on any Security at its Maturity Date (upon
acceleration, optional redemption, required purchase or otherwise); or
(2) failure to make the payment of any interest on any
Security when it becomes due and payable, and any such failure
continues for a period of 30 days; or
(3) failure to comply with any covenant or warranty of the
Company in this Indenture (other than a covenant or warranty that is
specifically dealt with in clause (1) or (2) above), which failure
continues for a period of 30 days after written notice of such failure
requiring the Company to remedy the same shall have been given to the
Company by the Trustee or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities; or
(4) (A) Indebtedness of the Company or any Restricted
Subsidiary in an amount greater than $5,000,000 shall have been
accelerated or otherwise declared due and payable, or required to be
prepaid or repurchased (other than by regularly scheduled required
prepayment prior to the stated maturity thereof) or (B) there shall
have occurred a default by the Company or any Restricted Subsidiary in
the payment of the principal on Indebtedness of the Company or any
Restricted Subsidiary in an amount greater than $5,000,000, when the
same becomes due and payable at the stated maturity thereof, and such
default shall have continued after any applicable grace period and
shall not have been cured or waived ; or
(5) one or more final judgments or orders rendered against the
Company or any Restricted Subsidiary for the payment of money in an
uninsured aggregate amount in excess of $5,000,000 shall not be waived,
satisfied or discharged for any period of 30 consecutive days during
which a stay of enforcement of such judgment or order was not in
effect; or
(6) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company or any Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company or any Subsidiary under the Federal Bankruptcy
Code or any other applicable federal or state law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or any Subsidiary or of any substantial part
of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order unstayed and
in effect for a period of 60 consecutive days; or
(7) the institution by the Company or any Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent
by it to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or
42
answer or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable federal or state law, or the
consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Company or any Subsidiary or of any
substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 501(6) or (7)) occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Securities Outstanding may declare the principal of all the Securities and all
accrued and unpaid interest thereon to such date, if any, to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such amounts shall become immediately
due and payable. If an Event of Default specified in Section 501(6) or (7)
occurs and is continuing, then the principal of all the Securities and all
accrued and unpaid interest thereon to such date, if any, shall IPSO FACTO
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in principal amount of the Outstanding Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(A) all overdue interest on all Outstanding
Securities,
(B) all unpaid principal of and premium, if any, on
any Outstanding Securities which have become due otherwise
than by such declaration of acceleration, and interest on such
unpaid principal at the rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest on overdue interest and overdue principal at
the rate borne by the Securities, and
(D) 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
(2) all Events of Default, other than the nonpayment of
amounts of principal of or premium, if any, on or interest on
Securities which have become due
43
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 installment of
interest on any Security when such interest becomes due and payable and
such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of or
premium, if any, on 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, the whole amount then due and payable
on such Securities for principal (and premium, if any) and interest,
and interest on any overdue principal (and premium, if any) and, to the
extent that payment of such interest shall be legally enforceable, upon
any overdue installment of interest, at the rate borne by the
Securities 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, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company 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 or any other obligor upon the Securities, wherever
situated.
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 judicial 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.
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
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company 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, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
44
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in
respect of the Securities 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 judicial proceeding, and
(ii) 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
606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 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 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 for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
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 premium,
if any) or interest, 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 amounts due the Trustee under
Section 606;
SECOND: To the payment of the amounts then due and unpaid
for principal of (and premium, if any) and interest on the Securities
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or
45
priority of any kind, according to the amounts due and payable on
such Securities for principal (and premium, if any) and interest,
respectively; and
THIRD: The balance, if any, to the Company, its successors
or assigns, or to any other Person or Persons lawfully 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
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities 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;
(3) 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;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such action
or proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority or more in principal amount of the Outstanding Securities;
it being understood and intended, and being expressly covenanted by the Holder
of every Security with every other Holder and the Trustee, that no one or more
Holders shall have any right in any manner whatever 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.
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment, as provided herein (including, if applicable, Article Thirteen)
and in such Security of the principal of (and premium, if any) and (subject to
Section 309) interest on such Security on the respective
46
Stated Maturities expressed in such Security (or, in the case of redemption, on
the Redemption Date) and to institute suit for the enforcement of any such
payment on or after such respective dates, 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, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 308, 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.
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 an
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.
Subject to the provisions of Section 602(5), the Holders of not less
than a majority in principal amount of the Outstanding Securities 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, PROVIDED that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture,
47
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve
it in personal liability or be unjustly prejudicial to the Holders not
consenting.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may, on behalf of the Holders of all the Securities,
waive any past Default hereunder and its consequences, except a Default
(1) in respect of the payment of the principal of (or
premium, if any) or interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine 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; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
The Company 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 wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) 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.
ARTICLE VI
THE TRUSTEE
SECTION 601. Notice of Defaults.
Within 30 days after the occurrence of any Default hereunder, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such Default hereunder known to the Trustee, unless such
Default shall have been cured or waived; PROVIDED, HOWEVER, that, except in the
case of a Default in the payment of the principal of (or premium, if any) or
interest on any Security, the Trustee shall be
48
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders; and
PROVIDED FURTHER that in the case of any Default of the character specified in
Section 501(4) no such notice to Holders shall be given until at least 30 days
after the occurrence thereof.
SECTION 602. Certain Rights of Trustee.
Subject to the provisions of TIA Sections 315(a) through 315(d):
(1) 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 believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
(unless other evidence in respect thereof is herein specifically
prescribed) and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(3) 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 is herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(6) prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, 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
49
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;
(7) 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 and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(8) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
The Trustee shall not be required 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.
SECTION 603. Trustee Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, 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 any Statement of Eligibility on Form T-1 supplied to the Company will be
true and accurate when made, subject to the qualifications set forth therein.
The Trustee shall not be accountable for the use or application by the Company
of Securities or the proceeds thereof.
SECTION 604. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other
agent of the Company or of the Trustee, in its individual or any other capacity,
may become the owner or pledgee of Securities and, subject to the Trust
Indenture Act, 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 605. Money Held in Trust.
Subject to the provisions of Section 506, all moneys received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
50
SECTION 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall agree 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);
(2) 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 and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses (including the reasonable compensation and the expenses and
disbursements of its agents and counsel) of investigating or defending
itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the resignation or removal
of the Trustee and/or the satisfaction and discharge of this Indenture. As
security for the performance of such obligations of the Company, the Trustee
shall have a claim prior to the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the payment of
principal of (and premium, if any) or interest on particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 501(6) or (7), the expenses (including
the reasonable charges and expenses of its counsel) of and the compensation for
such services are intended to constitute expenses of administration under any
applicable federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests.
There shall be at all times a Trustee hereunder which shall be eligible
to act as Trustee under TIA Section 310(a)(1) and 310(a)(5) and shall have a
combined capital and surplus of at least $50,000,000. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of federal, state, territorial or District of
51
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. 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 608. 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 in
accordance with the applicable requirements of Section 609.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If the instrument of acceptance by a successor
Trustee required by Section 609 shall not have been delivered to the Trustee
within 30 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 Act of the
Holders of not less than a majority in principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the
provisions of TIA Section 310(b) after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under
Section 607 and shall fail to resign after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(3) 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 or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the
Company, by a Board Resolution, may remove the Trustee, or
(ii) Subject to TIA Section 315(e), any Holder who has been a
bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, 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 Board
52
Resolution, 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 Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, 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 and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, and the Trustee may, 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 to the
Holders of Securities in the manner provided for in Section 106. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.
SECTION 609. 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 under the TIA and
eligible under this Article.
SECTION 610. 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 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. 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
53
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. In case at that time any of the Securities shall
not have been authenticated, any successor Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor Trustee. In all such cases such certificates shall have the full force
and effect which this Indenture provides for the certificate of authentication
of the Trustee shall have; PROVIDED, HOWEVER, that the right to adopt the
certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
ARTICLE VII
HOLDERS LISTS AND REPORTS BY TRUSTEE
SECTION 701. Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that none of the Company or the Trustee or any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
TIA Section 312, 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 TIA Section 312(b).
SECTION 702. Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities, the Trustee shall transmit to the
Holders, in the manner and to the extent provided in TIA Section 313(c), a brief
report dated as of such May 15 if required by TIA Section 313(a).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
(a) The Company shall not merge or consolidate with or into
any other entity (other than a merger of a Restricted Subsidiary into the
Company or of the Company into Inter*Act) or sell, transfer, assign, lease,
convey or otherwise dispose of all or substantially all of its Property in any
one transaction or series of transactions unless:
(1) the entity formed by or surviving any such consolidation
or merger (if the Company is not the surviving entity) or the Person to
which such sale, transfer, assignment, lease or conveyance is made (the
"Surviving Entity") shall be a
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corporation organized and existing under the laws of the United States
of America or a State thereof or the District of Columbia and such
corporation expressly assumes, by supplemental indenture in form
satisfactory to the Trustee, executed and delivered to the Trustee by
such corporation, the due and punctual payment of the principal of,
premium, if any, and interest on all the Securities, according to their
tenor, and the due and punctual performance and observance of all the
covenants and conditions of the Indenture to be performed by the
Company;
(2) in the case of a sale, transfer, assignment, lease,
conveyance or other disposition of all or substantially all the
Company's Property, such Property shall have been transferred as an
entirety or virtually as an entirety to one Person;
(3) immediately before and after giving effect to such
transaction or series of transactions, no Default or Event of Default
shall have occurred and be continuing; and
(4) immediately after giving effect to such transaction or
series of transactions on a pro forma basis (including any Indebtedness
Incurred or anticipated to be Incurred in connection with such
transaction or series of transactions), the Company or the Surviving
Entity, as the case may be, would be able to Incur at least $1.00 of
additional Indebtedness under clause (a) Section 1008.
(b) In connection with any consolidation, merger or transfer
contemplated by this Section 801, the Company shall deliver, or cause to be
delivered, to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officer's Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent herein
provided for relating to such transaction or transactions have been complied
with.
SECTION 802. Successor Substituted.
Upon any merger or consolidation or any sale, transfer, assignment,
lease, conveyance or other disposition of all or substantially all of the
properties and assets of the Company in accordance with Section 801 in which the
Company is not the continuing obligor under this Indenture, the Surviving Entity
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
had been named as the Company herein and, in the event of any such conveyance or
transfer, the Company (which term shall for this purpose mean the Person named
as the "Company" in the first paragraph of this Indenture or any successor
Person which shall theretofore become such in the manner described in Section
801), except in the case of a transfer by lease, shall be discharged of all
obligations and covenants under this Indenture and the Securities and may be
dissolved and liquidated.
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SECTION 803. Securities To Be Secured in Certain Events.
If, upon any such consolidation of the Company with or merger of the
Company into any other corporation, or upon any sale, assignment, conveyance,
lease, transfer or disposition of all or substantially all of the properties and
assets of the Company substantially as an entirety to any other Person or
Persons, any property or assets of the Company would thereupon become subject to
any Lien, then, unless such Lien could be created pursuant to Section 1012
without equally and ratably securing the Securities, the Company, prior to or
simultaneously with such consolidation, merger, conveyance, lease or transfer,
will, as to such property or assets, secure the Outstanding Securities (together
with, if the Company shall so determine any other Indebtedness of the Company
now existing or hereinafter created which is not subordinate in right of payment
to the Securities) equally and ratably with (or prior to) the Indebtedness which
upon such consolidation, merger, conveyance, lease or transfer is to become
secured as to such property or assets by such Lien, or will cause such
Securities to be so secured.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, 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:
(1) to evidence the succession of another Person to the
Company or any other obligor on the Securities and the assumption by
any such successor of the covenants of the Company or such obligor
contained herein and in the Securities in accordance with Article
Eight; or
(2) to add to the covenants of the Company or any other
obligor on the Securities for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company or any
other obligor on the Securities; or
(3) to add any additional Events of Default; or
(4) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of
Section 609; or
(5) 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 or changes with
respect to matters or questions arising under this Indenture; PROVIDED
that such action shall not adversely affect the interests of the
Holders in any material respect; or
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(6) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
Trust Indenture Act; or
(7) to add a guarantor of the Securities; or
(8) to mortgage, pledge, hypothecate or grant a security
interest in favor of the Trustee for the benefit of the Holders of the
Securities as additional security for the payment and performance of
the Company's and any guarantor's obligations under this Indenture in
any property or assets, including any of which are required to be
mortgaged, pledged or hypothecated, or in which a security interest is
required to be granted to the Trustee pursuant to Section 803 or 1012
or otherwise.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, 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 each Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal
amount thereof (or premium, if any) or the rate of interest thereon or
reduce the amount of the principal of the Securities that would be due
and payable upon a declaration of acceleration of the Maturity Date
thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, or change the coin or currency in
which any Security or any premium 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 the Redemption Date), or
(2) amend, change or modify in any material respect the
obligation of the Company to make and consummate a Prepayment Offer
with respect to any Asset Sale in accordance with Section 1014 or the
obligation of the Company to make and consummate a Change of Control
Offer in the event of a Change of Control in accordance with Section
1013, including, in each case, amending, changing or modifying in any
material respect any definition relating thereto, or
(3) reduce the percentage in principal amount of the
Outstanding Securities the consent of the Holders of which Outstanding
Securities is required for any such supplemental indenture, or the
consent of the Holders of which Outstanding Securities 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
57
(4) modify any of the provisions of this Section or Section
513, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected
thereby, or
(5) except as otherwise provided by Article Eight, consent to
the assignment or transfer by the Company of any of its obligations
under this Indenture.
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.
SECTION 903. 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 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 adversely affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 904. 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.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. 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. Failure to make the appropriate notation or to issue a
new Security shall not affect the validity of such amendment.
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SECTION 907. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 902, the Company
shall give notice thereof to the Holders of each Outstanding Security affected,
in the manner provided for in Section 106, setting forth in general terms the
substance of such supplemental indenture. Failure to provide such notice shall
not affect the validity of such amendment.
ARTICLE X
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, and Interest.
The Company covenants and agrees for the benefit of the Holders that it
will duly and punctually pay or cause to be paid the principal of (and premium,
if any) and interest on the Securities in accordance with the terms of the
Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in The City of New York, 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 and this
Indenture may be served. The Trustee's Affiliate at 00 Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, shall be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more
of such purposes. The Company will give prompt written notice to the Trustee of
any change in the location of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; PROVIDED, HOWEVER, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and any change in the location of any such other
office or agency.
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SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of (or premium, if any) or interest
on any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal of (or premium,
if any) or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will, on or before 10:00 a.m. on each due date of the principal
of (or premium, if any) or interest on any Securities, deposit with a Paying
Agent a sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of such action or
any failure so to act.
The Company will cause each 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:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) 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;
(2) 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 (and premium, if any) or interest; and
(3) 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.
Notwithstanding anything in this Section 1003 to the contrary, 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
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or 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 sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (or premium, if
any) or interest on any Security and remaining unclaimed for two years after
such principal, premium or interest has become due and payable shall, subject to
applicable escheat laws, be paid to the Company on
60
Company Request, or (if then held by the Company) shall be discharged from such
trust; 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, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 1005. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a material lien upon the property of the Company or any Subsidiary;
PROVIDED, HOWEVER, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings.
SECTION 1006. Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, within 120 days
after the end of each fiscal year, a brief certificate from the principal
executive officer, principal financial officer or principal accounting officer
as to his or her knowledge of the Company's compliance with all conditions and
covenants under this Indenture. For purposes of this Section 1006(a), such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
(b) When any Default has occurred and is continuing under this
Indenture, or if the trustee for or the holder of any other evidence of
Indebtedness of the Company or any Subsidiary gives any notice or takes any
other action with respect to a claimed default
61
(other than with respect to Indebtedness in the principal amount of less than
$5,000,000), the Company shall deliver to the Trustee by registered or certified
mail or by telegram, telex or facsimile transmission an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
occurrence.
SECTION 1007. Provision of Reports and Financial Statements.
(a) The Company shall file with the Trustee and provide the
Holders of Securities, within 15 days after it files them with the Commission,
copies of its annual and quarterly reports and other information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) which the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
(b) Notwithstanding that the Company may not be subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company
shall, for all periods ending after the date of this Indenture, file with the
Commission and provide the Trustee and holders of the Notes with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be so
filed and provided at the times specified for the filing of such information,
documents and reports under such Sections; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the Company shall have no obligation under this
Section 1007(b) for so long as its parent company, Inter*Act, makes all filings
and provides all reports required under this Section 1007(b).
SECTION 1008. Limitation on Indebtedness.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, Incur any Indebtedness, except that the Company may
Incur Indebtedness, if either (a) after giving pro forma effect to the
application of the proceeds thereof, no Default or Event of Default would occur
as a consequence of such Incurrence or be continuing following such Incurrence
and, after giving effect to the Incurrence of such Indebtedness and the receipt
and application of the proceeds thereof, the Consolidated Leverage Ratio of the
Company and its Restricted Subsidiaries would not exceed 5.0 to 1.0 or (b) such
Indebtedness is Permitted Indebtedness.
SECTION 1009. Limitation on Indebtedness and Preferred Stock of
Restricted Subsidiaries.
The Company shall not permit any Restricted Subsidiary to, directly or
indirectly, Incur any Indebtedness or issue any Preferred Stock, except that a
Restricted Subsidiary may Incur the following Indebtedness:
(i) Indebtedness owing to the Company or a Wholly Owned
Subsidiary; PROVIDED, HOWEVER, that any event that
results in any such
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Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of any such
Indebtedness (except to the Company or another Wholly
Owned Subsidiary) shall be deemed to constitute the
Incurrence of such Indebtedness by the issuer
thereof;
(ii) Indebtedness Incurred and outstanding on or prior
to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness
Incurred in anticipation of, or in connection with,
the transaction or series of related transactions
pursuant to which such Subsidiary became a
Restricted Subsidiary or was acquired by the
Company); PROVIDED, HOWEVER, that either (a) such
Indebtedness does not exceed at any one time
outstanding $5,000,000 or (b) the Company would be
permitted to Incur $1.00 of Indebtedness pursuant
to clause (a) of Section 1008;
(iii) Indebtedness under Interest Rate Agreements entered
into for the purpose of limiting interest rate risks,
provided that the obligations under such agreements
are related to payment obligations of such Restricted
Subsidiary in respect of Indebtedness otherwise
permitted by the terms of this Section 1009;
(iv) Indebtedness in connection with one or more standby
letters of credit or performance bonds issued in the
ordinary course of business or pursuant to
self-insurance obligations and not in connection with
the borrowing of money or the obtaining of advances
or credit; and
(v) Permitted Refinancing Indebtedness Incurred in
respect of Indebtedness Incurred pursuant to clauses
(ii) and (iii) above.
SECTION 1010. Limitation on Restricted Payments.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, make any Restricted Payment if at the time of, and
after giving effect to, such proposed Restricted Payment, (a) a Default or Event
of Default shall have occurred and be continuing, (b) the Company could not
Incur at least $1.00 of additional Indebtedness pursuant to clause (a) of
Section 1008 or (c) the aggregate amount of such Restricted Payment and all
other Restricted Payments made since August 1, 1996 (the amount of any
Restricted Payment, if made other than in cash, to be based upon Fair Market
Value) would exceed an amount equal to the sum of (i) the excess of (A)
Cumulative EBITDA over (B) the product of 1.5 and Cumulative Interest Expense,
(ii) Capital Stock Sale Proceeds, (iii) the amount by which Indebtedness of the
Company or its Restricted Subsidiaries is reduced on the balance sheet of the
Company upon the conversion or exchange (other than by a Subsidiary) subsequent
to the Issue Date of any Indebtedness of the Company or any Restricted
Subsidiary convertible or exchangeable for Capital Stock (other than Redeemable
Stock) of the Company (less the amount of any cash or other Property distributed
by the Company or any Restricted Subsidiary upon conversion or exchange) and
(iv) an amount
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equal to the net reduction in Investments made by the Company and its Restricted
Subsidiaries subsequent to the Issue Date in any Person resulting from (A)
dividends, repayment of loans or advances, or other transfers or distributions
of Property (but only to the extent the Company excludes such transfers or
distributions from the calculation of Cumulative EBITDA for purposes of clause
(c)(i) above), in each case to the Company or any Restricted Subsidiary from any
Person or (B) the redesignation of any Unrestricted Subsidiary as a Restricted
Subsidiary, not to exceed, in the case of (A) or (B), the amount of such
Investments previously made by the Company and its Restricted Subsidiaries in
such Person which were treated as Restricted Payments.
Notwithstanding the foregoing limitation, the Company may (a) pay
dividends on its Capital Stock within 60 days of the declaration thereof if, on
the declaration date, such dividends could have been paid in compliance
herewith, (b) redeem, repurchase, defease, acquire or retire for value, any
Indebtedness subordinate (whether pursuant to its terms or by operation of law)
in right of payment to the Securities with the proceeds of any Permitted
Refinancing Indebtedness, (c) acquire, redeem or retire Capital Stock of the
Company or Indebtedness subordinate (whether pursuant to its terms or by
operation of law) in right of payment to the Securities in exchange for or in
connection with a substantially concurrent issuance of, Capital Stock of the
Company (other than Redeemable Stock and other than Capital Stock issued or sold
to a Subsidiary or an employee stock ownership plan or other trust established
by the Company or any Subsidiary), and (d) make Investments in Persons the
primary businesses of which are Related Businesses (other than Investments in
the Capital Stock of the Company) in an amount at any time outstanding not to
exceed $10,000,000 in the aggregate.
Any payments made pursuant to clauses (b) and (c) of the immediately
preceding paragraph shall be excluded from the calculation of the aggregate
amount of Restricted Payments made after the Issue Date; PROVIDED, HOWEVER, that
the proceeds from the issuance of Capital Stock pursuant to clause (c) of the
immediately preceding paragraph shall not constitute Capital Stock Sale Proceeds
for purposes of clause (c)(ii) of the first paragraph of this Section.
SECTION 1011. Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, conduct any business or enter into or suffer to
exist any transaction or series of transactions (including the purchase, sale,
transfer, lease or exchange of any Property or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company (an "Affiliate
Transaction") unless (a) the terms of such Affiliate Transaction are (i) set
forth in writing, (ii) in the best interest of the Company or such Restricted
Subsidiary, as the case may be, and (iii) no less favorable to the Company or
such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable arm's-length transaction with a Person that is not an
Affiliate of the Company or such Restricted Subsidiary, (b) with respect to an
Affiliate Transaction involving aggregate payments or value in excess of
$1,000,000, the Board of Directors of the Company (including a majority of the
Disinterested Directors of the Company) approves such Affiliate Transaction and,
in its good faith judgment,
64
believes that such Affiliate Transaction complies with clauses (a)(ii) and (iii)
of this paragraph as evidenced by a Board Resolution and (c) with respect to an
Affiliate Transaction involving aggregate payments or value in excess of
$10,000,000, the Company obtains a written opinion from an independent appraisal
firm to the effect that such Affiliate Transaction is fair from a financial
point of view.
Notwithstanding the foregoing limitation, the Company may enter into or
suffer to exist the following: (i) any transaction pursuant to any contract in
existence on the Issue Date and listed on Schedule I; (ii) any transaction or
series of transactions between the Company and one or more of its Restricted
Subsidiaries or between two or more of its Restricted Subsidiaries; (iii) any
Restricted Payment permitted to be made pursuant to Section 1010; (iv) the
payment of compensation (including amounts paid pursuant to employee benefit
plans) for the personal services of officers, directors and employees of the
Company or any of its Restricted Subsidiaries, so long as the Board of Directors
of the Company in good faith shall have approved the terms thereof and deemed
the services theretofore or thereafter to be performed for such compensation or
fees to be fair consideration therefor; (v) loans and advances to employees made
in the ordinary course of business and consistent with past practice of the
Company or such Restricted Subsidiary, as the case may be, provided, that such
loans and advances do not exceed $5,000,000 at any one time outstanding; (vi)
employment arrangements entered into in the ordinary course of business with
officers of the Company approved by a majority of the Disinterested Directors of
the Company; and (vii) the Management Services Agreement.
SECTION 1012. Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, Incur or suffer to exist, any Lien (other than
Permitted Liens) upon any of its Property, whether now owned or hereafter
acquired, including any Lien on any interest in, or any income or profits from,
its Property, unless effective provision has been or will be made whereby the
Securities will be secured equally and ratably with (or prior to) such
obligation; PROVIDED, HOWEVER, that no Lien may be granted with respect to
Indebtedness of the Company that is subordinated to the Securities.
SECTION 1013. Purchase of Securities upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each
Holder of Securities shall have the right to require that the Company purchase
such Holder's Securities, in whole or in part in integral multiples of $500
principal amount, at a purchase price (the "Change of Control Purchase Price")
in cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest, if any, to the date of purchase (the "Change of Control
Purchase Date") in accordance with the procedures set forth in paragraphs (b)
and (c) of this Section (the "Change of Control Offer").
(b) Within 30 days following any Change of Control, the
Company shall (x) cause a notice of the Change of Control Offer to be sent at
least once to the Dow Xxxxx News Service or similar business news service in the
United States and (y) notify the Trustee
65
thereof and give written notice of such Change of Control to each Holder of
Securities in the manner provided in Section 106, stating:
(1) that a Change of Control has occurred and a
Change of Control Offer is being made pursuant to this Section
1013 and that all Securities timely tendered will be accepted
for payment;
(2) the Change of Control Purchase Price and the
Change of Control Purchase Date, which shall be, subject to
any contrary requirements of applicable law, no earlier than
30 days nor later than 60 days from the date such notice is
mailed;
(3) that any Security (or portion thereof) accepted
for payment (and duly paid on the Change of Control Purchase
Date) pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Purchase Date;
(4) that any Securities (or portions thereof) not
tendered will continue to accrue interest;
(5) a description of the transaction or
transactions constituting the Change of Control; and
(6) the procedures that Holders of Securities must
follow in order to tender their Securities (or portions
thereof) for payment and the procedures that Holders of
Securities must follow in order to withdraw an election to
tender Securities (or portions thereof) for payment.
(c) The Company will comply, to the extent applicable, with
the requirements of Rule 14e-1 under the Exchange Act, and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of Securities in connection with a
Change of Control. To the extent that the provisions of any securities laws or
regulations conflict with the provisions relating to the Change of Control
Offer, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations described
above by virtue thereof.
SECTION 1014. Limitation on Assets Sales.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale after the Issue
Date unless (i) the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Sale at least equal to the Fair
Market Value of the Property subject to such Asset Sale and (ii) at least 80% of
the consideration paid to the Company or such Restricted Subsidiary in
connection with such Asset Sale is in the form of cash or cash equivalents.
66
(b) The Net Available Cash (or any portion thereof) from Asset
Sales may be applied by the Company or a Restricted Subsidiary, to the extent
the Company or such Restricted Subsidiary elects, (A) to prepay, repay or
purchase Indebtedness of a Restricted Subsidiary (excluding Indebtedness owed to
the Company or an Affiliate of the Company); or (B) to reinvest in Additional
Assets (including by means of an Investment in Additional Assets by a Restricted
Subsidiary with Net Available Cash received by the Company or another Restricted
Subsidiary).
(c) Any Net Available Cash from an Asset Sale is not applied
in accordance with the preceding paragraph within 270 days from the date of such
Asset Sale or the receipt of such Net Available Cash shall constitute "Excess
Proceeds". When the aggregate amount of Excess Proceeds exceeds $10,000,000
(taking into account income earned on such Excess Proceeds), the Company will be
required to make an offer to purchase (the "Prepayment Offer") the Securities,
on a pro rata basis according to principal amount at maturity, at a purchase
price equal to 100% of the principal amount thereof plus accrued and unpaid
interest thereon (if any) to the date of purchase, in accordance with the
procedures (including prorating in the event of oversubscription) set forth
herein. If the aggregate principal amount of Securities surrendered for purchase
by Holders thereof exceeds the amount of Excess Proceeds, then the Trustee shall
select the Securities to be purchased according to the principal amount of the
Securities tendered in response to the Prepayment Offer pro rata or by lot with
such adjustments as may be deemed appropriate by the Company so that only
Securities having a principal amount of maturity of $500, or integral multiples
thereof, shall be purchased. To the extent that any portion of the amount of Net
Available Cash remains after compliance with the preceding sentence and provided
that all Holders of Securities have been given the opportunity to tender their
Securities for purchase as described in the following paragraph, the Company or
such Restricted Subsidiary may use such remaining amount for general corporate
purposes and the amount of Excess Proceeds will be reset to zero.
(d) Within five Business Days after the Excess Proceeds
exceeds $10,000,000, the Company shall send a written notice, by first-class
mail, to the Holders (the "Prepayment Offer Notice"), accompanied by such
information regarding the Company and its Subsidiaries as the Company in good
faith believes will enable such Holders to make an informed decision with
respect to the Prepayment Offer. The Prepayment Offer Notice will state, among
other things, (1) that the Company is offering to purchase Securities pursuant
to the provisions of this Section 1014, (2) the purchase price and purchase
date, which shall be, subject to any contrary requirements of applicable law, no
less than 30 days not more than 60 days from the date the Prepayment Offer
Notice is mailed (the "Purchase Date"), (3) that any Security (or any portion
thereof) accepted for payment (and duly paid on the Purchase Date) pursuant to
the Prepayment Offer shall cease to accrue interest after the Purchase Date, (4)
the aggregate principal amount of Securities (or portion thereof) to be
purchased and (5) a description of the procedure that Holders must follow in
order to tender their Securities (or portions thereof) and the procedure that
Holders must follow in order to withdraw an election to tender their Securities
(or portions thereof) for payment.
67
(e) The Company will comply, to the extent applicable with
Rule 14e-1 under the Exchange Act and any other securities laws or regulations
thereunder to the extent such laws and regulations are applicable in connection
with the purchase of Securities pursuant to this Section. To the extent that the
provisions of any securities laws or regulations conflict with the provisions
relating to the Prepayment Offer, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations described in this Section by virtue thereof.
SECTION 1015. Limitation on Lines of Business.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, engage in any business other than a Related
Business.
SECTION 1016. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective, or enter into any agreement with any Person that
would cause to become effective, any consensual encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) pay dividends, in cash or
otherwise, or make any other distributions on or in respect of its Capital
Stock, or pay any Indebtedness or other obligation owed, to the Company or any
other Restricted Subsidiary, (b) make any loans or advances to the Company or
any other Restricted Subsidiary or (c) transfer any of its Property to the
Company or any other Restricted Subsidiary. Such limitation will not apply (1)
with respect to clauses (a), (b) and (c), to encumbrances and restrictions (i)
in existence under or by reason of any agreements in effect on the Issue Date,
(ii) relating to Indebtedness of a Restricted Subsidiary and existing at such
Restricted Subsidiary at the time it became a Restricted Subsidiary if such
encumbrance or restriction was not created in connection with or in anticipation
of the transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company, or (iii) which result from the renewal, refinancing, extension or
amendment of an agreement referred to in the immediately preceding clauses (1)
(i) and (ii) above an in clauses (2) (i) and (ii) below, provided, such
encumbrance or restriction is no more restrictive to such Restricted Subsidiary
than those under or pursuant to the agreement evidencing the Indebtedness so
extended, renewed, refinanced or replaced, and (2) with respect to clause (c)
only, to (i) any encumbrance or restriction relating to Indebtedness that is
permitted to be Incurred and secured pursuant to the provisions under Section
1011 and Section 1015 that limits the right of the debtor to dispose of the
assets or Property securing such Indebtedness, (ii) any encumbrance or
restriction in connection with an acquisition of Property, so long as such
encumbrance or restriction relates solely to the Property so acquired and was
not created in connection with or in anticipation of such acquisition, (iii)
customary provisions restricting subletting or assignment of leases and
customary provisions in other agreements that restrict assignment of such
agreements or rights thereunder or (iv) customary restrictions contained in
asset sale agreements limiting the transfer of such assets pending the closing
of such sale.
68
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 1101. Mandatory and Optional Redemption.
(a) The Company shall redeem all of the Outstanding Securities
on August 1, 2003 at 100% of the principal amount thereof, together with accrued
and unpaid interest to the redemption date, from the Holders of the Securities.
(b) The Securities are redeemable at any time at the option of
the Company, in whole or in part, on not less than 30 nor more than 60 days'
notice, at 100% of the principal amount thereof, plus accrued and unpaid
interest (if any) to the date of redemption.
SECTION 1102. 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 1103. Notice to Trustee of Redemption.
The election of the Company to redeem any Securities pursuant to
paragraph (b) of Section 1101 shall be evidenced by a Board Resolution. In case
of any redemption at the election of the Company, the Company shall, at least 60
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date and shall deliver to the Trustee such documentation and records as shall
enable the Trustee to select the Securities to be redeemed pursuant to Section
1104.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, with such selection to be done on a pro rata
basis for all of the Outstanding Securities; PROVIDED, HOWEVER, that no such
partial redemption shall reduce the portion of the principal amount of a
Security not redeemed to less than $500.
The Trustee shall promptly notify the Company 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
69
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 1105. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed. The notice if given in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the Holder receives such notice. In any case, failure to give such notice
or any defect in the notice to the Holder of any Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest to
the Redemption Date payable as provided in Section 1107, if any,
(3) if less than all Outstanding Securities are to be
redeemed, the identification (and, in the case of a partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder will
receive, without charge, a new Security or Securities of authorized
denominations for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and
accrued interest, if any, to the Redemption Date payable as provided in
Section 1107) will become due and payable upon each such Security, or
the portion thereof, to be redeemed, and that interest thereon will
cease to accrue on and after said date, and
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest,
if any.
Notice of redemption of Securities to be redeemed 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.
SECTION 1106. Deposit of Redemption Price.
On or prior to 10:00 a.m. (New York City time) on any Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount
70
of money sufficient to pay the Redemption Price of, and accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 1107. 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 (together with accrued interest, if any, to
the Redemption Date), 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, if any, to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest payable on any
Interest Payment Date 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 at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 309.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest, from the Redemption Date at the rate borne by the
Securities.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at the Corporate Trust Office of the Trustee or at the office or agency of the
Company maintained for such purpose pursuant to Section 1002 (with, if the
Company or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or such Holder's 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 like tenor and form, 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.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
71
This Indenture may be signed in any number of counterparts each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Indenture.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
INTER*ACT OPERATING CO., INC.
By /s/ Xxxxxx XxXxxxxxxx
--------------------------
Name: Xxxxxx XxXxxxxxxx
Title: Executive Vice President
[Corporate Seal]
Attest:
/s/ Xxx X. Xxxxxx, Xx
---------------------------
Asst. Secretary
STATE STREET BANK AND
TRUST COMPANY
By /s/ Xxxxxxx X. Xxxxxxx
__________________________
Name: Xxxxxxx X. Xxxxxxx
_______________________
Title: Vice President
72
Exhibit A
[FACE OF NOTE]
INTER*ACT OPERATING CO., INC.
Senior Pay-In-Kind Note Due 2003
CUSIP [ ]
No. _______ US$__________
INTER*ACT OPERATING CO., INC., a corporation existing under the laws of
the State of North Carolina (the "Company," which term includes any successor
under the Indenture hereinafter referred to), for value received, promises to
pay to ____________, or its registered assigns, the principal sum of
_____________ dollars ($_________) on August 1, 2003
Initial Interest Rate: 14% per annum.**
Interest Rate: 14% per annum.*
Interest Payment Dates: February 1 and August 1,
commencing February 1, 2000.
Regular Record Dates: January 15 and July 15
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
-------------------
* Include only for Exchange Securities.
** Include only for Initial Securities.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers.
Date: ____________ INTER*ACT OPERATING CO., INC.
By: ___________________________
Name:
Title:
Attest: _______________________
Name:
Title:
A-2
(Form of Trustee's Certificate of Authentication)
This is one of the Senior Pay-In-Kind Notes due 2003 described in the
within-mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY
as Trustee
By: ________________________________
Authorized Signatory
A-3
[REVERSE SIDE OF NOTE]
INTER*ACT OPERATING CO., INC.
Senior Pay-In-Kind Note due 2003
1. Principal and Interest.
The Company will pay the principal of this Note on August 1, 2003.
The Company promises to pay interest on the principal amount of this
Note on each Interest Payment Date, as set forth below, [at the rate of 14% per
annum (subject to adjustment as provided below)]1 [at the rate of 14% per annum,
except that interest accrued on this Note (or the predecessor Note hereto) in
accordance with the terms of this Section 1 for periods prior to the applicable
Exchange Date (as such term is defined in the Registration Rights Agreement
referred to below) will accrue at the rate or rates borne by the predecessor
Note hereto from time to time during such periods pursuant to the Registration
Rights Agreement as set forth below].**
Interest will be payable semiannually to the holder of record of the
Note, or any predecessor Note (the "Holder") at the close of business on the
January 15 or July 15 immediately preceding the Interest Payment Date) on each
Interest Payment Date, commencing February 1, 2000, and thereafter on August 1
and February 1 of each year and at said Stated Maturity. Interest shall be
payable in cash; PROVIDED, HOWEVER, that the Company may at its option pay
interest in kind on the Note by the issuance of one or more promissory notes
therefor (each a "PIK Note," and collectively the "PIK Notes"), with the same
terms, including date of maturity and interest rate, as the Note, to the Holder;
PROVIDED FURTHER, HOWEVER, that upon the first Interest Payment Date immediately
following the date that is eighteen (18) months after (i) the consummation of an
Initial Public Offering or (ii) a Change in Control, then and thereafter
interest shall be payable only in cash. PIK Notes shall be deemed to have been
issued by the Company, and it obligations thereunder shall commence, as of the
applicable Interest Payment Date, irrespective of the actual date of execution
and delivery of the PIK Notes, and shall be deemed to be included within the
term "Notes" for all purposes as of such Interest Payment Date.
The Holder of this Note is entitled to the benefits of the Exchange and
Registration Rights Agreement, dated as of December __, 1999, between the
Company and the parties named therein (the "Registration Rights Agreement"). In
the event that as of the date that is 180 days following the date hereof,
neither the Company nor Inter*Act has commenced an Initial Public Offering, and
(a) the Exchange Offer Registration Statement or the Shelf Registration
Statement (as such terms are defined in the Registration Rights Agreement), as
--------
1 Include only for Initial Securities.
2 Include only for Exchange Securities.
A-4
the case may be, is not filed with the Securities and Exchange Commission on or
prior to the Target Filing Date (as defined in the Registration Rights
Agreement), (b) the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, has not been declared effective on
or prior to the Target Effective Date (as defined in the Registration Rights
Agreement; (c) either the Exchange Offer (as such term is defined in the
Registration Rights Agreement) is not consummated or the Shelf Registration
Statement (as such term is defined in the Registration Rights Agreement) is not
declared effective on or prior to the Target Consummation Date (as defined in
the Registration Rights Agreement), or (d) the Exchange Offer Registration
Statement or the Shelf Registration Statement is declared effective, but
thereafter ceases to be effective or usable (each such event referred to in
clause (a) through (d) above, a "Registration Default") interest (in addition
to the interest otherwise due on the Note after such date) will accrue on this
Note at a rate of one-half of one percent per annum of the principal amount of
this Note with respect to the first 90-day period following such Registration
Default, and the amount of such additional interest will increase by an
additional one-half of one percent per annum for each subsequent 90-day period
until such Registration Default has been cured, with such interest payable in
cash semi-annually, in arrears, on February 1 and August 1 of each year;
PROVIDED, HOWEVER, that in no event shall the rate of such additional interest
be more than one and one-half of one percent. Upon the cure of all applicable
Registration Defaults, such additional interest shall cease to accrue.
Any and all payments made by the Company under this Note will be made
free and clear of and without deduction for or on account of any and all present
or future taxes, levies, imposts, deductions, charges or withholdings and all
liabilities with respect thereto imposed by the United States excluding any
taxes, levies, imposts, deductions, charges or withholdings and all liability
with respect thereto (i) resulting from the Holder having some connection with
the United States other than the mere holding of or enforcement of or receipt of
any payment with respect to such Note, (ii) the payment of which may be avoided
by the Holder complying with any certification, declaration or other reporting
requirement concerning the nationality, residence, identity or connection with
any taxing authority of such Holder as the beneficial owner of such Note, (iii)
that would not have been imposed but for the presentation (where presentation is
required) of such Note for payment more than 30 days after the date such payment
became due and payable or was duly provided for, whichever occurs later, (iv) in
the nature of estate, inheritance, gift, sale, transfer, personal property or
similar taxes or (v) imposed on or with respect to any payment by the Company to
the Holder if such Holder is a fiduciary or partnership or person other than the
sole beneficial owner of such payment to the extent such tax, levy, impost,
deduction, charge or withholding would not have been imposed on a beneficiary or
settlor with respect to such fiduciary, member of such partnership or the
beneficial owner of such payment had such beneficiary, settlor, member or
beneficial owner been the Holder of such Note (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
referred to collectively or individually as "U.S. Withholding Taxes"). If the
Company is required by law to deduct any U.S. Withholding Taxes from or in
respect of any sum payable under this Note, the sum payable hereunder shall be
increased by the amount necessary so that after making all required deductions
the Holder will receive an amount equal to the sum it would have received had no
such deductions been made.
A-5
From and after August 1, 1999, interest on this Note will accrue from
the most recent date to which interest has been paid [on this Note or the Note
surrendered in Exchange herefor]* or, if no interest has been paid, from August
1, 1999; provided that, if there is no existing default in the payment of
interest and if this Note is authenticated between a Regular Record Date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such Interest Payment Date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and premium, if
any, and interest on overdue installments of interest, to the extent lawful, at
a rate per annum equal to the rate of interest applicable to the Notes.
2. Method of Payment.
The Company will pay interest (except Defaulted Interest) on the
principal amount of the Notes on each February 1 and August 1 to the persons who
are Holders (as reflected in the Security Register at the close of business on
the January 15 and July 15 immediately preceding the Interest Payment Date), in
each case, even if the Note is cancelled on registration of transfer or
registration of exchange after such record date; provided that, with respect to
the payment of principal, the Company will make payment to the Holder that
surrenders this Note to any Paying Agent on or after August 1, 2003.
The Company will pay principal, premium, if any, and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay principal, premium, if
any, and interest by its check payable in such money. The Company may mail an
interest check to a Holder's registered address (as reflected in the Security
Register). The Company may also make any payment of monies required to be
deposited with the Trustee on account of principal of, or premium, if any, or
interest on, this Note by wire transfer in immediately available funds to an
account designated by the Trustee on or before the date such monies are to be
paid to the Holder. If a payment date is a date other than a Business Day,
payment may be made on the next succeeding day that is a Business Day and no
interest shall accrue for the intervening period.
3. Paying Agent and Registrar.
Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. The Company may change any authenticating agent, Paying Agent or
Registrar upon written notice thereto. The Company, any Subsidiary or any
Affiliate of any of them may act as Paying Agent, Registrar or co-registrar.
--------
1 Include only for Exchange Securities.
A-6
4. Indenture; Limitations.
The Company issued the Note under an Indenture dated as of December __,
1999 (the "Indenture"), between the Company and State Street Bank and Trust
Company as trustee (the "Trustee"). Capitalized terms herein are used as defined
in the Indenture unless otherwise indicated. The terms of this Note include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act. The Note is subject to all such terms, and the
Holder is referred to the Indenture and the Trust Indenture Act for a statement
of all such terms. To the extent permitted by applicable law, in the event of
any inconsistency between the terms of this Note and the terms of the Indenture,
the terms of the Indenture shall control.
The Note is a general unsecured obligations of the Company. The
Indenture limits the aggregate principal amount of the Notes to $70,000,000 plus
the amounts of PIK Notes issued thereunder.
5. Redemption.
Mandatory Redemption. The Company will redeem 100% of the principal
amount of the Notes, together with accrued and unpaid interest to the redemption
date, from the Holders of the Notes at the close of business on August 1, 2003.
Optional Redemption. The Notes are redeemable at any time at the option
of the Company, in whole or in part, on not less than 30 nor more than 60 days'
notice, at 100% of the principal amount thereof, plus accrued and unpaid
interest (if any) to the date of redemption.
On and after any redemption date, interest will cease to accrue on the
Notes or portions thereof called for redemption unless the Company shall fail to
redeem any such Notes.
6. Repurchase upon a Change of Control.
Upon the occurrence of a Change in Control, each Holder shall have the
right to require that the Company repurchase such Holder's Notes, in whole or in
part, in integral multiples of $500 principal amount at final Maturity, at a
purchase price in cash in an amount equal to 100% of the principal amount
thereof, plus accrued interest (if any) to the date of purchase (the "Change of
Control Purchase Price").
A notice of each Change in Control will be mailed within 15 days after
such Change of Control occurs to each Holder at his last address as it appears
in the Security Register. On and after the Change of Control Payment Date,
interest ceases to accrue on Notes or portions of Notes surrendered for purchase
by the Company, unless the Company defaults in the payment of the Change of
Control Purchase Price.
A-7
7. Denominations; Transfer; Exchange.
The Notes are in registered form without coupons, in denominations of
$500 principal amount at maturity and multiples of $500 in excess thereof. A
Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer or exchange of any Notes selected for redemption (except the
unredeemed portion of any Note being redeemed in part). Also, it need not
register the transfer or exchange of any Notes for a period of 15 days before a
selection of Notes to be redeemed is made.
8. Persons Deemed Owners.
A Holder may be treated as the owner of a Note for all purposes.
9. Unclaimed Money.
If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will, subject
to escheat law, pay the money back to the Company at its request. After that,
Holders entitled to the money must look to the Company for payment, unless an
abandoned property law designates another Person, and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
10. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount at final Maturity of the Notes then outstanding,
and any existing default or compliance with any provision may be waived with the
consent of the Holders of a majority in aggregate principal amount at final
Maturity of the Notes then outstanding. Without notice to or the consent of any
Holder, the parties thereto may amend or supplement the Indenture or the Notes
to, among other things, cure any ambiguity, or inconsistency provided such
change does not materially adversely affect the rights of any Holder.
11. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of the Company
and its Subsidiaries, among other things, to incur additional Indebtedness,
grant Liens, make Restricted Payments, use the proceeds from Asset Sales, engage
in transactions with Affiliates, engage in other businesses, restrict payments
from Restricted Subsidiaries or merge, consolidate or transfer substantially all
of its assets. At the end of each fiscal year, the Company must report to the
Trustee on compliance with such limitations.
A-8
12. Successor Persons.
When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.
13. Defaults and Remedies.
The following events constitute "Events of Default" under the
Indenture: (a) failure to make the payment of any principal of or premium, if
any, on any Note at its Maturity Date (upon acceleration, optional redemption,
required purchase or otherwise); (b) failure to make the payment of any interest
on any Note when it becomes due and payable and any such failure continues for a
period of 30 days; (c) failure to comply with any covenant or warranty of the
Company contained in the Indenture (other than a covenant or warranty that is
specifically dealt with in clauses (a) or (b) above) which failure continues for
a period of 30 days after written notice shall have been given to the Company by
the Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the Notes then outstanding; (d) (i) Indebtedness
of the Company or any Restricted Subsidiary in an amount greater than $5,000,000
shall have been accelerated or otherwise declared due and payable, or required
to be prepaid or repurchased (other than by regularly scheduled required
prepayment prior to the stated maturity thereof) or (ii) a default by the
Company or any Restricted Subsidiary in the payment of principal on Indebtedness
of the Company or any Restricted Subsidiary in an amount greater than
$5,000,000, when the same becomes due and payable at the stated maturity
thereof, and such default shall have continued after any applicable grace period
and shall not have been cured or waived; (e) one or more final judgments or
orders shall be rendered against the Company or any Restricted Subsidiary for
the payment of money in an uninsured aggregate amount, in excess of $5,000,000
shall not be waived, satisfied or discharged for any period of 30 consecutive
days during which a stay of enforcement of such judgment or order was not in
effect; or (f) the occurrence of certain events of bankruptcy, insolvency or
reorganization with respect to the Company or any Subsidiary.
If an Event of Default, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount at final Maturity of the Notes then outstanding may declare all the Notes
to be immediately due and payable. If a bankruptcy or insolvency Event of
Default with respect to the Company or any of its Subsidiaries occurs and is
continuing, the Notes automatically become immediately due and payable. Holders
may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Notes. Subject to certain limitations, Holders of at least a
majority in aggregate principal amount at final Maturity of the Notes then
outstanding may direct the Trustee in its exercise of any trust or power.
A-9
14. Trustee Dealings with Company.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Notes and may make loans to, accept
deposits from, perform services for, and otherwise deal with, the Company and
its Affiliates as if it were not the Trustee.
15. Authentication.
This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.
16. Abbreviations.
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).
17. Defeasance.
The Indenture contains provisions for defeasance, at any time, of the
Indebtedness represented by this Note or the covenants governing the
Indebtedness represented by this Note, upon compliance by the Company with
certain conditions set forth in the Indenture.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to Inter*Act Operating Co.,
Inc., 00 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000.
A-10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No. ___________________________________________
------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing attorney to transfer such Note on the books of the Company with full
power of substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED
ON ALL CERTIFICATES
EXCEPT PERMANENT OFFSHORE PHYSICAL
CERTIFICATES]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
December __, 2002, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
[Check One]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 307 of the Indenture shall have
been satisfied.
Date: __________________________
____________________________
NOTICE: The signature to
this assignment must
correspond with the name as
written upon the face of
the within-mentioned
instrument in every
particular, without
alteration or any change
whatsoever.
A-11
Signature Guarantee: (1) ____________________________________________________
(signature must be guaranteed)
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: __________________________ ______________________________________
NOTICE: To be executed by an executive
officer
-----------
(1) Guarantor must be a member of the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange Medallion Signature Program
("MSP") or the Stock Exchange Medallion Program ("SEMP").
A-12
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Company pursuant to
Section 1013 or Section 1014 of the Indenture, check the Box: [ ].
If you wish to have a portion of this Note purchased by the Company
pursuant to Section 1013 or Section 1014 of the Indenture, state the amount in
original principal amount (must be an integral multiple of $500) below:
$___________
Date: ____________________
Your Signature: _______________________________
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee: (1) ___________________________________________
(signature must be guaranteed)
---------------
(1) Guarantor must be a member of the Securities Transfer Agents Medallion
Program ("STAMP"), the New York Stock Exchange Medallion Signature
Program ("MSP") or the Stock Exchange Medallion Program ("SEMP").
A-13
Exhibit B
Form of Certificate
to Be Delivered upon
Termination of Restricted Period
On or after ________ __, ____
State Street Bank and Trust Company
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Inter*Act Systems, Inc. (the "Company")
Senior Pay-In-Kind Notes due 2003 (the "Securities")
Ladies and Gentlemen:
This letter relates to U.S. $_____________________ principal amount of
Securities represented by the temporary global note certificate (the "Temporary
Certificate"). Pursuant to Section 202 of the Indenture dated as of December __,
1999 relating to the Securities (the "Indenture"), we hereby certify that (1) we
are the beneficial owner of such principal amount of Securities represented by
the Temporary Certificate and (2) we are a person outside the United States to
whom the Securities could be transferred in accordance with Rule 904 of
Regulation S promulgated under the U.S. Securities Act of 1933, as amended.
Accordingly, you are hereby requested to issue a Certificated Security
representing the undersigned's interest in the principal amount of Securities
represented by the Temporary Certificate, all in the manner provided by the
Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
Authorized Signature
B-1
Exhibit C
Form of Certificate to Be
Delivered in Connection with
Transfers to Non-QIB Institutional Accredited Investors
-------------, ----
Inter*Act Systems, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
x/x
Xxxxx Xxxxxx Xxxx and Trust Company
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Inter*Act Systems, Inc. (the "Company")
Senior Pay-In-Kind Notes due 2003 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed purchase of $ _________________
aggregate principal amount of the Securities:
1. We understand that the Securities have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be sold
except as permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing the Securities to
offer, sell or otherwise transfer such Securities prior to the date which is two
years after the later of the date of original issue and the last date on which
the Company or any affiliate of the Company was the owner of such Securities, or
any predecessor thereto (the "Resale Restriction Termination Date") only (a) to
the Company, (b) pursuant to a registration statement which has been declared
effective under the Securities Act, (c) for so long as the Securities are
eligible for resale pursuant to Rule 144A under the Securities Act, to a person
we reasonably believe is a qualified institutional buyer under Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB to whom
notice is given that the transfer is being made in reliance on Rule 144A, (d)
pursuant to offers and sales to non-U.S. Persons that occur outside the United
States within the meaning of Regulation S under the Securities Act, (e) to an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) of Rule 501 under the Securities Act that is acquiring the
Securities for its own account or for the account of such an institutional
"accredited investor" for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution thereof in violation of the
Securities Act or (f) pursuant to any other available exemption from the
registration requirements of the
C-1
Securities Act, subject in each of the foregoing cases to any requirement of law
that the disposition of our property and the property of such investor account
or accounts be at all times within our or their control and to compliance with
any applicable state securities laws. The foregoing restrictions on resale will
not apply subsequent to the Resale Restriction Termination Date. If any resale
or other transfer of the Securities is proposed to be made pursuant to clause
(e) above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Trustee, which shall provide, among other things, that the transferee is an
institutional "accredited investor" within the meaning of subparagraph (a)(1),
(2), (3) or (7) or Rule 501 under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. We acknowledge that the Company and the Trustee reserve the
right prior to any offer, sale or other transfer prior to the Resale Restriction
Termination Date of the Securities pursuant to clauses (d), (e) and (f) above to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company and the Trustee.
2. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of such an institutional "accredited
investor," and we are acquiring the Securities for investment purposes and not
with a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Securities, and we and any accounts for which we
are acting are each able to bear the economic risk of our or its investment.
3. We are acquiring the Securities purchased by us for our own account
or for one or more accounts as to each of which we exercise sole investment
discretion.
4. You are entitled to rely upon this letter and you are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By: _________________________
(NAME OF PURCHASER)
Date: _______________________
C-2
Upon transfer, the Securities should be registered in the name of the
new beneficial owner as follows:
Name: _______________________________________________________________________
Address: ____________________________________________________________________
Taxpayer ID Number: _________________________________________________________
C-3
Exhibit D
Form of Certificate to Be Delivered
in Connection with Transfers
Pursuant to Regulation S
-------------------, ----
State Street Bank and Trust Company
[ ]
[ ]
Attention: Corporate Trust Administration
Re: Inter*Act Systems, Inc. (the "Company")
Senior Pay-In-Kind Notes due 2003 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_______ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the Securities Act of 1933, as
amended ("Regulation S"; capitalized terms used but not defined herein shall
have the meanings given the in Regulation S, and, accordingly, we represent
that:
1. the offer of the Securities was not made to or for the
account or benefit of a United States Person or to a person in the
United States;
2. either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
3. no direct selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable; and
4. the transaction is not part of a plan or scheme to evade
the registration requirements of the U.S. Securities Act of 1933, as
amended.
We acknowledge and agree that, if the sale is made during a restricted
period and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S
are applicable thereto, we confirm that such sale has been made in accordance
with the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case
may be.
D-1
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By: ___________________________
Authorized Signature
D-2
