EXHIBIT 4.5
================================================================================
NBC ACQUISITION CORP.
AND
BNY MIDWEST TRUST COMPANY
as Trustee
11% Senior Discount Notes due 2013
==================
INDENTURE
Dated as of March 4, 2004
==================
================================================================================
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
------- -------
310 (a)(1) ............................................................... 7.10
(a)(2) ............................................................... 7.10
(a)(3) ............................................................... N.A.
(a)(4) ............................................................... N.A.
(b) .................................................................. 7.8; 7.10
(c) .................................................................. N.A.
311 (a) .................................................................. 7.11
(b) .................................................................. 7.11
(c) .................................................................. N.A.
312 (a) .................................................................. 2.5
(b) .................................................................. 10.3
(c) .................................................................. 10.3
313 (a) .................................................................. 7.6
(b)(1) ............................................................... N.A.
(b)(2) ............................................................... 7.6
(c) .................................................................. 7.6
(d) .................................................................. 7.6
314 (a) .................................................................. 3.2; 3.17; 10.2
(b) .................................................................. N.A.
(c)(1) ............................................................... 10.4
(c)(2) ............................................................... 10.4
(c)(3) ............................................................... N.A.
(d) .................................................................. N.A.
(e) .................................................................. 10.5
315 (a) .................................................................. 7.1
(b) .................................................................. 7.5; 10.2
(c) .................................................................. 7.1
(d) .................................................................. 7.1
(e) .................................................................. 6.11
316 (a)(last sentence) ................................................... 10.6
(a)(1)(a) ............................................................ 6.5
(a)(1)(b) ............................................................ 6.4
(a)(2) ............................................................... N.A.
(b) .................................................................. 6.7
317 (a)(1) ............................................................... 6.8
(a)(2) ............................................................... 6.9
(b) .................................................................. 2.4
318 (a) .................................................................. 10.1
N.A. means Not Applicable.
------------------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions .......................................................... 1
SECTION 1.2. Other Definitions .................................................... 27
SECTION 1.3. Incorporation by Reference of Trust Indenture Act .................... 28
SECTION 1.4. Rules of Construction ................................................ 28
ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms ............................................... 29
SECTION 2.2. Execution and Authentication ......................................... 36
SECTION 2.3. Registrar and Paying Agent ........................................... 37
SECTION 2.4. Paying Agent To Hold Money in Trust .................................. 38
SECTION 2.5. Securityholder Lists ................................................. 38
SECTION 2.6. Transfer and Exchange ................................................ 38
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors .................... 41
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S ................................. 43
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities ...................... 44
SECTION 2.10. Outstanding Securities ............................................... 45
SECTION 2.11. Temporary Securities ................................................. 45
SECTION 2.12. Cancellation ......................................................... 46
SECTION 2.13. Payment of Interest; Defaulted Interest .............................. 46
SECTION 2.14. Computation of Interest .............................................. 47
SECTION 2.15. CUSIP Numbers ........................................................ 47
SECTION 2.16. Issuance of Additional Securities .................................... 47
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities ................................................ 48
SECTION 3.2. SEC Reports and Available Information ................................ 48
SECTION 3.3. Limitation on Indebtedness ........................................... 49
SECTION 3.4. [Reserved] ........................................................... 52
SECTION 3.5. Limitation on Restricted Payments .................................... 52
SECTION 3.6. Limitation on Restrictions on Distributions from Restricted
Subsidiaries ....................................................... 56
i
SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock ................... 57
SECTION 3.8. Limitation on Affiliate Transactions ................................. 60
SECTION 3.9. Change of Control .................................................... 61
SECTION 3.10. Limitation on Sale of Capital Stock of Restricted Subsidiaries ....... 62
SECTION 3.11. Limitation on Liens .................................................. 62
SECTION 3.12. Future Subsidiary Guarantors ......................................... 63
SECTION 3.13. Limitation on Lines of Business ...................................... 63
SECTION 3.14. Maintenance of Office or Agency ...................................... 63
SECTION 3.15. Corporate Existence .................................................. 63
SECTION 3.16. [Reserved] ........................................................... 64
SECTION 3.17. Compliance Certificate ............................................... 64
SECTION 3.18. Further Instruments and Acts ......................................... 64
SECTION 3.19. Payments for Consent ................................................. 64
SECTION 3.20. Statement by Officers as to Default .................................. 64
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation ............................................. 64
ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption .................................................. 66
SECTION 5.2. Applicability of Article ............................................. 66
SECTION 5.3. Election to Redeem; Notice to Trustee ................................ 66
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed .................... 66
SECTION 5.5. Notice of Redemption ................................................. 66
SECTION 5.6. Deposit of Redemption Price .......................................... 67
SECTION 5.7. Securities Payable on Redemption Date ................................ 68
SECTION 5.8. Securities Redeemed in Part .......................................... 68
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default .................................................... 68
SECTION 6.2. Acceleration ......................................................... 71
SECTION 6.3. Other Remedies ....................................................... 71
SECTION 6.4. Waiver of Past Defaults .............................................. 71
SECTION 6.5. Control by Majority .................................................. 72
SECTION 6.6. Limitation on Suits .................................................. 72
SECTION 6.7. Rights of Holders to Receive Payment ................................. 72
SECTION 6.8. Collection Suit by Trustee ........................................... 73
SECTION 6.9. Trustee May File Proofs of Claim ..................................... 73
ii
SECTION 6.10. Priorities ........................................................... 73
SECTION 6.11. Undertaking for Costs ................................................ 73
ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee .................................................... 74
SECTION 7.2. Rights of Trustee .................................................... 75
SECTION 7.3. Individual Rights of Trustee ......................................... 75
SECTION 7.4. Trustee's Disclaimer ................................................. 75
SECTION 7.5. Notice of Defaults ................................................... 76
SECTION 7.6. Reports by Trustee to Holders ........................................ 76
SECTION 7.7. Compensation and Indemnity ........................................... 76
SECTION 7.8. Replacement of Trustee ............................................... 77
SECTION 7.9. Successor Trustee by Merger .......................................... 78
SECTION 7.10. Eligibility; Disqualification ........................................ 78
SECTION 7.11. Preferential Collection of Claims Against Company .................... 78
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance ..................... 78
SECTION 8.2. Conditions to Defeasance ............................................. 80
SECTION 8.3. Application of Trust Money ........................................... 81
SECTION 8.4. Repayment to Company ................................................. 81
SECTION 8.5. Indemnity for U.S. Government Obligations ............................ 81
SECTION 8.6. Reinstatement ........................................................ 81
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders ........................................... 82
SECTION 9.2. With Consent of Holders .............................................. 83
SECTION 9.3. Compliance with Trust Indenture Act .................................. 83
SECTION 9.4. Revocation and Effect of Consents and Waivers ........................ 83
SECTION 9.5. Notation on or Exchange of Securities ................................ 84
SECTION 9.6. Trustee To Sign Amendments ........................................... 84
ARTICLE X
Miscellaneous
SECTION 10.1. Trust Indenture Act Controls ......................................... 84
SECTION 10.2. Notices .............................................................. 84
SECTION 10.3. Communication by Holders with other Holders .......................... 85
iii
SECTION 10.4. Certificate and Opinion as to Conditions Precedent ................... 85
SECTION 10.5. Statements Required in Certificate or Opinion ........................ 85
SECTION 10.6. When Securities Disregarded .......................................... 86
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar ......................... 86
SECTION 10.8. Legal Holidays ....................................................... 86
SECTION 10.9. GOVERNING LAW ........................................................ 86
SECTION 10.10. No Recourse Against Others ........................................... 86
SECTION 10.11. Successors ........................................................... 87
SECTION 10.12. Multiple Originals ................................................... 87
SECTION 10.13. Variable Provisions .................................................. 87
SECTION 10.14. Qualification of Indenture ........................................... 87
SECTION 10.15. Table of Contents; Headings .......................................... 87
EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
EXHIBIT C Form of Subsidiary Guarantee
iv
INDENTURE dated as of March 4, 2004, between NBC ACQUISITION
CORP, a Delaware corporation (the "Company", or "Holdings"), and BNY MIDWEST
TRUST COMPANY, an Illinois trust company (the "Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of (i) the
Company's 11% Senior Discount Notes due 2013 issued on the date hereof (the
"Initial Securities"), (ii) if and when issued an unlimited principal amount of
additional 11% Senior Discount Notes due 2013 that may be offered from time to
time subsequent to the Issue Date (the "Additional Securities"), (iii) in
exchange for Initial Securities or any Additional Securities as provided in the
Registration Rights Agreement or a similar agreement relating to Initial
Securities or Additional Securities, the Company's 11% Senior Discount Notes due
2013 (the "Exchange Securities" and, together with the Initial Securities and
any Additional Securities, the "Securities").
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions. "Accreted Value" means as of any
date (the "Specified Date"), the amount provided below for each $1,000 principal
amount at maturity of the Securities:
(1) if the Specified Date occurs on one of the following
dates (each, a "Semi-Annual Accrual Date"), the Accreted Value will
equal the amount set forth below for such Semi-Annual Accrual Date:
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
------------------------ --------------
March 15, 2004 ......... $ 651.60
September 15, 2004 ..... $ 687.44
March 15, 2005 ......... $ 725.25
September 15, 2005 ..... $ 765.13
March 15, 2006 ......... $ 807.22
September 15, 2006 ..... $ 851.61
March 15, 2007 ......... $ 898.45
September 15, 2007...... $ 947.87
March 15, 2008 ......... $ 1,000.00
(2) if the Specified Date occurs before the first
Semi-Annual Accrual Date, the Accreted Value will equal the sum of (A)
the original issue price of a Note and (B) an amount equal to the
product of (x) the Accreted Value for the first Semi-Annual Accrual
Date less such original issue price multiplied by (y) a fraction, the
numerator of which is the number of days from the Issue Date to the
Specified Date, using a 360-day year of twelve 30-day months, and the
denominator of which is the number of days elapsed from the Issue Date
to the first Semi-Annual Accrual Date, using a 360-day year of twelve
30-day months;
2
(3) if the Specified Date occurs between two Semi-Annual
Accrual Dates, the Accreted Value will equal the sum of (A) the
Accreted Value for the Semi-Annual Accrual Date immediately preceding
such Specified Date and (B) an amount equal to the product of (x) the
Accreted Value for the Semi-Annual Accrual Date immediately following
such Specified Date less the Accreted Value for the Semi-Annual Accrual
Date immediately preceding such Specified Date multiplied by (y) a
fraction, the numerator of which is the number of days from the
immediately preceding Semi-Annual Accrual Date to the Specified Date,
using a 360-day year of twelve 30-day months, and the denominator of
which is 180.
(4) if the Specified Date occurs after the last
Semi-Annual Accrual Date, the Accreted Value will equal $1,000.
"Acquired Indebtedness" means Indebtedness (i) of a Person or
any of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary or (ii) assumed in connection with the acquisition of assets from or
merger with such Person, in each case whether or not Incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary or such merger or acquisition. Acquired Indebtedness shall
be deemed to have been Incurred, with respect to clause (i) of the preceding
sentence, on the date such Person becomes a Restricted Subsidiary and, with
respect to clause (ii) of the preceding sentence, on the date of consummation of
such merger or acquisition of assets.
"Additional Assets" means:
(1) any property or assets (other than Indebtedness and
Capital Stock) to be used by the Company or a Restricted Subsidiary in
a Related Business;
(2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary;
provided, however, that, in the case of clauses (2) and (3), such Restricted
Subsidiary is primarily engaged in a Related Business.
"Additional Securities" has the meaning ascribed to it in the
second introductory paragraph of this Indenture.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any 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;
provided that beneficial ownership of 10% or more of the Voting Stock of a
Person shall be deemed to be control.
3
"Asset Disposition" means any direct or indirect sale, lease
(other than an operating lease entered into in the ordinary course of business),
transfer, issuance or other disposition, or a series of related sales, leases,
transfers, issuances or dispositions that are part of a common plan, of shares
of Capital Stock of a Subsidiary (other than directors' qualifying shares),
property or other assets (each referred to for the purposes of this definition
as a "disposition") by the Company or any of its Restricted Subsidiaries,
including any disposition by means of a merger, consolidation or similar
transaction.
Notwithstanding the preceding, the following items shall not
be deemed to be Asset Dispositions:
(1) a disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Restricted
Subsidiary; provided that in the case of a sale by a Restricted
Subsidiary to another Restricted Subsidiary, the Company directly or
indirectly owns an equal or greater percentage of the Common Stock of
the transferee than of the transferor;
(2) the sale of Cash Equivalents in the ordinary course
of business;
(3) a disposition of inventory in the ordinary course of
business;
(4) a disposition of obsolete or worn out equipment or
equipment that is no longer useful in the conduct of the business of
the Company and its Restricted Subsidiaries and that is disposed of in
each case in the ordinary course of business;
(5) transactions permitted under Section 4.1 of this
Indenture;
(6) an issuance of Capital Stock by a Restricted
Subsidiary to the Company or to a Wholly-Owned Subsidiary;
(7) for purposes of Section 3.7 of this Indenture only,
the making of a Permitted Investment or a disposition subject to
Section 3.5 of this Indenture;
(8) dispositions in connection with Permitted Liens;
(9) dispositions of receivables in connection with the
compromise, settlement or collection thereof in the ordinary course of
business or in bankruptcy or similar proceedings and exclusive of
factoring or similar arrangements;
(10) the licensing or sublicensing of intellectual
property or other general intangibles and licenses, leases or subleases
of other property; and
(11) disposition of assets acquired in foreclosures.
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended). Such present value shall be
4
calculated using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (1) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (2) the sum of all
such payments.
"Bank Indebtedness" means any and all amounts, whether
outstanding on the Issue Date or Incurred after the Issue Date, payable by the
Company under or in respect of the Credit Agreement and any related notes,
collateral documents, letters of credit and guarantees and any Interest Rate
Agreement entered into in connection with the Credit Agreement, including
principal, premium, if any, interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Company at the rate specified therein whether or not a claim for post filing
interest is allowed in such proceedings), fees, charges, expenses, reimbursement
obligations, guarantees and all other amounts payable thereunder or in respect
thereof.
"Board of Directors" means, as to any Person, the board of
directors of such Person or any duly authorized committee thereof or in the case
of a limited liability company, the board of managers or other similar body.
"Business Day" means each day that is not a Saturday, Sunday
or other day on which banking institutions in New York, New York are authorized
or required by law to close.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Capitalized Lease Obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation will be the capitalized amount of such obligation
at the time any determination thereof is to be made as determined in accordance
with GAAP, and the Stated Maturity thereof will be the date of the last payment
of rent or any other amount due under such lease prior to the first date such
lease may be terminated without penalty.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or
insured by the United States Government or any agency or
instrumentality of the United States (provided that the full faith and
credit of the United States is pledged in support thereof), having
maturities of not more than one year from the date of acquisition;
(2) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such
state or any public instrumentality
5
thereof maturing within one year from the date of acquisition of the
United States (provided that the full faith and credit of the United
States is pledged in support thereof) and, at the time of acquisition,
having a credit rating of "A" or better from either Standard & Poor's
Ratings Services or Xxxxx'x Investors Service, Inc.;
(3) certificates of deposit, time deposits, eurodollar
time deposits, overnight bank deposits or bankers' acceptances having
maturities of not more than one year from the date of acquisition
thereof issued by any commercial bank the long-term debt of which is
rated at the time of acquisition thereof at least "A" or the equivalent
thereof by Standard & Poor's Ratings Services, or "A" or the equivalent
thereof by Xxxxx'x Investors Service, Inc., and having combined capital
and surplus in excess of $500.0 million;
(4) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(1), (2) and (3) entered into with any bank meeting the qualifications
specified in clause (3) above;
(5) commercial paper rated at the time of acquisition
thereof at least "A-2" or the equivalent thereof by Standard & Poor's
Ratings Services or "P-2" or the equivalent thereof by Xxxxx'x
Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of investments, and in any case
maturing within one year after the date of acquisition thereof; and
(6) interests in any investment company or money market
fund which invests 95% or more of its assets in instruments of the type
specified in clauses (1) through (5) above.
"Change of Control" means:
(1) any "person" or "group" of related persons (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), other
than one or more Permitted Holders, is or becomes the beneficial owner
(as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that such person or group shall be deemed to have "beneficial
ownership" of all shares that any such person or group has the right to
acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 35% of the
total voting power of the Voting Stock of New Holdings, the Company or
its Restricted Subsidiaries (or its successor by merger, consolidation
or purchase of all or substantially all of its assets) (for the
purposes of this clause, such person or group shall be deemed to
beneficially own any Voting Stock of New Holdings, the Company or its
Restricted Subsidiaries held by a parent entity, if such person or
group "beneficially owns" (as defined above), directly or indirectly,
more than 35% of the voting power of the Voting Stock of such parent
entity); and (B) the Permitted Holders "beneficially own" (as defined
in Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly,
in the aggregate a lesser percentage of the total voting power of the
Voting Stock of New Holdings, the Company or its Restricted
Subsidiaries, as the case may be, (or its successor by merger,
consolidation or purchase of all or substantially all
6
of its assets) than such other person or group and do not have the
right or ability by voting power, contract or otherwise to elect or
designate for election a majority of the board of directors of the
Company or such successor (for the purposes of this clause, such other
person or group shall be deemed to beneficially own any Voting Stock of
a specified entity held by a parent entity, if such other person or
group "beneficially owns" directly or indirectly, more than 35% of the
voting power of the Voting Stock of such parent entity and the
Permitted Holders "beneficially own" directly or indirectly, in the
aggregate a lesser percentage of the voting power of the Voting Stock
of such parent entity and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a
majority of the board of directors of such parent entity); or
(2) the first day on which a majority of the members of
the Board of Directors of New Holdings or the Company are not
Continuing Directors; or
(3) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
assets of New Holdings, the Company and its Restricted Subsidiaries
taken as a whole to any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) other than a Permitted Holder; or
(4) the adoption by the stockholders of New Holdings or
the Company of a plan or proposal for the liquidation or dissolution of
New Holdings or the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means with respect to any Person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of such Person's common stock
whether or not outstanding on the Issue Date, and includes, without limitation,
all series and classes of such common stock.
"Consolidated Coverage Ratio" means as of any date of
determination, with respect to any Person, the ratio of (x) the aggregate amount
of Consolidated EBITDA of such Person for the period of the most recent four
consecutive fiscal quarters ending prior to the date of such determination for
which financial statements are in existence to (y) Consolidated Interest Expense
for such four fiscal quarters, provided, however, that:
(1) if the Company or any Restricted Subsidiary:
(a) has Incurred any Indebtedness since the
beginning of such period that remains outstanding on such date
of determination or if the transaction giving rise to the need
to calculate the Consolidated Coverage Ratio is an Incurrence
of Indebtedness, Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving effect
on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period
(except that in making such computation, the amount of
Indebtedness under any revolving credit facility outstanding
on the date of such calculation will be deemed to be (i) the
average daily balance of such Indebtedness during such four
fiscal quarters or such shorter period for which such facility
was outstanding
7
or (ii) if such facility was created after the end of such
four fiscal quarters, the average daily balance of such
Indebtedness during the period from the date of creation of
such facility to the date of such calculation) and the
discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first
day of such period; or
(b) has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of
the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio involves a discharge
of Indebtedness (in each case other than Indebtedness Incurred
under any revolving credit facility unless such Indebtedness
has been permanently repaid and the related commitment
terminated), Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving effect
on a pro forma basis to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness, as if
such discharge had occurred on the first day of such period;
(2) if since the beginning of such period the Company or
any Restricted Subsidiary will have made any Asset Disposition or
disposed of any company, division, operating unit, segment, business,
group of related assets or line of business or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is
such an Asset Disposition or disposition:
(a) the Consolidated EBITDA for such period will
be reduced by an amount equal to the Consolidated EBITDA (if
positive) directly attributable to the assets which are the
subject of such Asset Disposition or disposition for such
period or increased by an amount equal to the Consolidated
EBITDA (if negative) directly attributable thereto for such
period; and
(b) Consolidated Interest Expense for such
period will be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company
and its continuing Restricted Subsidiaries in connection with
such Asset Disposition or disposition for such period (or, if
the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary
to the extent the Company and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after
such sale);
(3) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) will have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary or is merged with or into the Company) or an
acquisition of assets, including any acquisition of assets occurring in
connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of a company,
division, operating unit, segment,
8
business or line of business, Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after giving pro
forma effect thereto (including the Incurrence of any Indebtedness) as
if such Investment or acquisition occurred on the first day of such
period; and
(4) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of
such period) will have Incurred any Indebtedness or discharged any
Indebtedness, made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after giving pro
forma effect thereto as if such transaction occurred on the first day
of such period.
For purposes of this definition, whenever pro forma effect is to be given to any
calculation under this definition, the pro forma calculations will be determined
in good faith by a responsible financial or accounting officer of the Company
(including pro forma expense and cost reductions calculated on a basis
consistent with Regulation S-X under the Securities Act). If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness will be calculated as if the rate in
effect on the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement applicable to such
Indebtedness if such Interest Rate Agreement has a remaining term in excess of
12 months). If any Indebtedness that is being given pro forma effect bears an
interest rate at the option of the Company, the interest rate shall be
calculated by applying such optional rate chosen by the Company.
"Consolidated EBITDA" for any period means, without
duplication, the Consolidated Net Income for such period, plus the following to
the extent deducted in calculating such Consolidated Net Income:
(1) Consolidated Interest Expense;
(2) Consolidated Income Taxes;
(3) consolidated depreciation expense;
(4) consolidated amortization expense or impairment
charges recorded in connection with the application of Financial
Accounting Standard No. 142, "Goodwill and Other Intangibles;" and
(5) other non-cash charges reducing Consolidated Net
Income (excluding any such non-cash charge to the extent it represents
an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period
not included in the calculation).
provided, however, that all transaction costs and expenses payable in connection
with the Transaction and all similar costs and expenses paid in connection with
the recapitalization
9
transaction in which Nebraska Book amended and restated its existing senior
secured credit facility and redeemed or repurchased equity securities, including
stock options, for an aggregate purchase price of approximately $34.5 million,
which was consummated on December 10, 2003, shall be excluded from the
calculation of Consolidated EBITDA.
Notwithstanding the preceding sentence, clauses (2) through
(5) relating to amounts of a Restricted Subsidiary of a Person will be added to
Consolidated Net Income to compute Consolidated EBITDA of such Person only to
the extent (and in the same proportion) that the net income (loss) of such
Restricted Subsidiary was included in calculating the Consolidated Net Income of
such Person and, to the extent the amounts set forth in clauses (2) through (5)
are in excess of those necessary to offset a net loss of such Restricted
Subsidiary or if such Restricted Subsidiary has net income for such period
included in Consolidated Net Income, only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Subsidiary without prior approval (that has not been obtained),
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Income Taxes" means, with respect to any Person
for any period, taxes imposed upon such Person or other payments required to be
made by such Person by any governmental authority which taxes or other payments
are calculated by reference to the income or profits of such Person or such
Person and its Restricted Subsidiaries (to the extent such income or profits
were included in computing Consolidated Net Income for such period), regardless
of whether such taxes or payments are required to be remitted to any
governmental authority.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, whether paid or accrued, plus, to the extent not included in such
interest expense:
(1) interest expense attributable to Capitalized Lease
Obligations and the interest portion of rent expense associated with
Attributable Indebtedness in respect of the relevant lease giving rise
thereto, determined as if such lease were a capitalized lease in
accordance with GAAP and the interest component of any deferred payment
obligations;
(2) amortization of debt discount and debt issuance cost
(other than such discounts and costs incurred in connection with the
Transaction) (provided that any amortization of bond premium will be
credited to reduce Consolidated Interest Expense unless, pursuant to
GAAP, such amortization of bond premium has otherwise reduced
Consolidated Interest Expense);
(3) non-cash interest expense;
(4) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance
financing;
10
(5) interest actually paid by the Company or any such
Restricted Subsidiary under any Guarantee of Indebtedness or other
obligation of any other Person;
(6) costs associated with Hedging Obligations (including
amortization of fees) provided, however, that if Hedging Obligations
result in net benefits rather than costs, such benefits shall be
credited to reduce Consolidated Interest Expense unless, pursuant to
GAAP, such net benefits are otherwise reflected in Consolidated Net
Income;
(7) the consolidated interest expense of such Person and
its Restricted Subsidiaries that was capitalized during such period;
(8) the product of (a) all dividends paid or payable, in
cash, Cash Equivalents or Indebtedness or accrued during such period on
any series of Disqualified Stock of such Person or on Preferred Stock
of its Restricted Subsidiaries payable to a party other than the
Company or a Wholly-Owned Subsidiary, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current combined federal, state, provincial and local statutory
tax rate of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP; and
(9) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are
used by such plan or trust to pay interest or fees to any Person (other
than the Company) in connection with Indebtedness Incurred by such plan
or trust.
For the purpose of calculating the Consolidated Coverage Ratio
in connection with the Incurrence of any Indebtedness described in the final
paragraph of the definition of "Indebtedness," the calculation of Consolidated
Interest Expense shall include all interest expense (including any amounts
described in clauses (1) through (9) above) relating to any Indebtedness of the
Company or any Restricted Subsidiary described in the final paragraph of the
definition of "Indebtedness."
For purposes of the foregoing, total interest expense will be
determined (i) after giving effect to any net payments made or received by the
Company and its Subsidiaries with respect to Interest Rate Agreements and (ii)
exclusive of amounts classified as other comprehensive income in the balance
sheet of the Company. Notwithstanding anything to the contrary contained herein,
commissions, discounts, yield and other fees and charges Incurred in connection
with any transaction pursuant to which the Company or its Restricted
Subsidiaries may sell, convey or otherwise transfer or grant a security interest
in any accounts receivable or related assets shall be included in Consolidated
Interest Expense.
"Consolidated Net Income" means, for any period, the net
income (loss) of the Company and its consolidated Restricted Subsidiaries
determined in accordance with GAAP; provided, however, that there will not be
included in such Consolidated Net Income:
(1) any net income (loss) of any Person if such Person is
not a Restricted Subsidiary, except that:
11
(a) subject to the limitations contained in
clauses (3), (4) and (5) below, the Company's equity in the
net income of any such Person for such period will 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 (2) below); and
(b) the Company's equity in a net loss of any
such Person (other than an Unrestricted Subsidiary) for such
period will be included in determining such Consolidated Net
Income to the extent such loss has been funded with cash from
the Company or a Restricted Subsidiary;
(2) any net income (but not 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
(other than as permitted under Section 3.6), except that:
(a) subject to the limitations contained in
clauses (3), (4) and (5) below, the Company's equity in the
net income of any such Restricted Subsidiary for such period
will 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 will be included in
determining such Consolidated Net Income;
(3) any gain (loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or its
consolidated Restricted Subsidiaries (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise disposed of
in the ordinary course of business and any gain (loss) realized upon
the sale or other disposition of any Capital Stock of any Person;
(4) any extraordinary gain or loss; and
(5) the cumulative effect of a change in accounting
principles.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company or New Holdings, as the case
may be, who: (1) was a member of such Board of Directors on the day immediately
following the Issue Date; or (2) was nominated for election or elected to such
Board of Directors with the approval of a majority of the Continuing Directors
who were members of such the relevant Board at the time of such nomination or
election.
12
"Credit Agreement" means one or more debt facilities
(including, without limitation, the Credit Agreement, dated as of February 13,
1998, as amended and restated as of December 10, 2003 and as further amended and
restated on or about March 4, 2004, among the Company, Nebraska Book, New
Holdings, the several banks and other financial institutions or entities from
time to time parties thereto, the eligible subsidiaries referred to therein,
JPMorgan Chase Bank, as administrative agent and collateral agent, Citigroup
Global Markets Inc., as syndication agent and Fleet National Bank as
documentation agent) or commercial paper facilities to which Nebraska Book is a
party with banks or other institutional lenders providing for revolving credit
loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time (and whether or not with the original
administrative agent and lenders or another administrative agent or agents or
other lenders and whether provided under the original credit agreement or any
other credit or other agreement or indenture).
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in
Section 2.13.
"Depositary" means The Depository Trust Company, its nominees
and their respective successors and assigns, or such other depository
institution hereinafter appointed by the Company.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock of such Person which by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable) or upon the
happening of any event:
(1) matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise;
(2) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of the Company or a Restricted
Subsidiary); or
(3) is redeemable at the option of the holder of the
Capital Stock in whole or in part,
in each case on or prior to the date that is 91 days after the earlier of the
date (a) of the Stated Maturity of the Securities or (b) on which there are no
Securities outstanding, provided that only the portion of Capital Stock which so
matures or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such date will be deemed
to be Disqualified Stock; provided, further that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
change of control or asset sale (each defined in a substantially identical
manner to the corresponding definitions in this Indenture) shall not constitute
Disqualified Stock if the terms of such Capital Stock (and all such securities
13
into which it is convertible or for which it is ratable or exchangeable) provide
that the Company may not repurchase or redeem any such Capital Stock (and all
such securities into which it is convertible or for which it is ratable or
exchangeable) pursuant to such provision prior to compliance by the Company with
the provisions of Section 3.9 and Section 3.7 of this Indenture and such
repurchase or redemption complies with Section 3.5 of this Indenture.
"8-3/4% Notes" means the senior subordinated notes of Nebraska
Book due 2008.
"Equity Offering" means an offering or issuance for cash by
either of the Company or New Holdings of its respective common stock, Preferred
Stock (other than any Disqualified Stock) or options, warrants or rights with
respect to its common stock or Preferred Stock (other than any Disqualified
Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Securities" has the meaning ascribed to it in the
second introductory paragraph of this Indenture.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Indenture will be computed in conformity with GAAP.
"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:
(1) 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 agreement
to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or
otherwise); or
(2) entered into for purposes of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part); provided, however, that the term "Guarantee" will not include
endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding
meaning.
"Guarantor" means any Person that Guarantees the Securities;
provided, that upon the release or discharge of such Person from its Guarantee
in accordance with this Indenture, such Person ceases to be a Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a
Subsidiary Guarantor, any Indebtedness of such Subsidiary Guarantor (whether
outstanding on the Issue
14
Date or thereafter Incurred) which is expressly subordinate in right of payment
to the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee
pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement.
"Holder", "holder" or "Securityholder" means the Person in
whose name a Security is registered in the Note Register.
"Incur" means issue, create, assume, Guarantee, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such person becomes a Restricted
Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be
deemed to be Incurred by such Restricted Subsidiary at the time it becomes a
Restricted Subsidiary; and the terms "Incurred" and "Incurrence" have meanings
correlative to the foregoing.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(1) the principal of and premium (if any) in respect of
indebtedness of such Person for borrowed money;
(2) the principal of and premium (if any) in respect of
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(3) the principal component of all obligations of such
Person in respect of letters of credit, bankers' acceptances or other
similar instruments (including reimbursement obligations with respect
thereto except to the extent such reimbursement obligation relates to a
trade payable and such obligation is satisfied within 30 days of
Incurrence);
(4) the principal component of all obligations of such
Person to pay the deferred and unpaid purchase price of property
(except trade payables), which purchase price is due more than six
months after the date of placing such property in service or taking
delivery and title thereto;
(5) Capitalized Lease Obligations and all Attributable
Indebtedness of such Person;
(6) the principal component or liquidation preference of
all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with
respect to any Subsidiary, any Preferred Stock (but excluding, in each
case, any accrued dividends);
(7) the principal component of all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not
such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a)
15
the fair market value of such asset at such date of determination and
(b) the amount of such Indebtedness of such other Persons;
(8) the principal component of Indebtedness of other
Persons to the extent Guaranteed by such Person; and
(9) to the extent not otherwise included in this
definition, net obligations of such Person under Interest Rate
Agreements (the amount of any such obligations to be equal at any time
to the termination value of such agreement or arrangement giving rise
to such obligation that would be payable by such Person at such time).
The amount of Indebtedness of any Person at any date will be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
In addition, "Indebtedness" of any Person shall include
Indebtedness described in the preceding paragraph that would not appear as a
liability on the balance sheet of such Person if:
(1) such Indebtedness is the obligation of a partnership
or joint venture that is not a Restricted Subsidiary (a "Joint
Venture");
(2) such Person or a Restricted Subsidiary of such Person
is a general partner of the Joint Venture (a "General Partner"); and
(3) there is recourse, by contract or operation of law,
with respect to the payment of such Indebtedness to property or assets
of such Person or a Restricted Subsidiary of such Person; and then such
Indebtedness shall be included in an amount not to exceed:
(a) the lesser of (i) the net assets of the
General Partner and (ii) the amount of such obligations to the
extent that there is recourse, by contract or operation of
law, to the property or assets of such Person or a Restricted
Subsidiary of such Person; or
(b) if less than the amount determined pursuant
to clause (a) immediately above, the actual amount of such
Indebtedness that is recourse to such Person or a Restricted
Subsidiary of such Person, if the Indebtedness is evidenced by
a writing and is for a determinable amount and the related
interest expense shall be included in Consolidated Interest
Expense to the extent actually paid by the Company or its
Restricted Subsidiaries.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Initial Securities" has the meaning ascribed to it in the
second introductory paragraph of this Indenture.
16
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement as to which such Person is party or a
beneficiary.
"Investment" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the form
of any direct or indirect advance, loan (other than advances or extensions of
credit to customers in the ordinary course of business) or other extensions of
credit (including by way of Guarantee or similar arrangement, but excluding any
debt or extension of credit represented by a bank deposit other than a time
deposit) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by, such Person and all other items that are or
would be classified as investments on a balance sheet prepared in accordance
with GAAP; provided that none of the following will be deemed to be an
Investment:
(1) Hedging Obligations entered into in the ordinary
course of business and in compliance with this Indenture;
(2) endorsements of negotiable instruments and documents
in the ordinary course of business; and
(3) an acquisition of assets, Capital Stock or other
securities by the Company or a Subsidiary for consideration to the
extent such consideration consists of Common Stock of the Company.
For purposes of Section 3.5 of this Indenture,
(1) "Investment" will include the portion (proportionate
to the Company's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of
the net assets of such Restricted Subsidiary at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary;
provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company will be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (a) the Company's "Investment" in such Subsidiary at
the time of such redesignation less (b) the portion (proportionate to
the Company's equity interest in such Subsidiary) of the fair market
value of the net assets (as conclusively determined by the Board of
Directors of the Company in good faith) of such Subsidiary at the time
that such Subsidiary is so re-designated a Restricted Subsidiary; and
(2) any property transferred to or from an Unrestricted
Subsidiary will be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of
Directors of the Company.
"Issue Date" means the date on which the Initial Securities
are originally issued.
17
"Legal Holiday" has the meaning ascribed to it in Section 10.8
of this Indenture.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Nebraska Book" means Nebraska Book Company, Inc., a Kansas
corporation, or any successor thereto which assumes the obligations under the
Senior Subordinated Notes.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and net proceeds from the sale or other disposition of any securities received
as consideration, 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 the properties or assets that are
the subject of such Asset Disposition or received in any other non-cash form)
therefrom, in each case net of:
(1) all legal, accounting, investment banking, title and
recording tax expenses, commissions and other fees and expenses
Incurred, and all Federal, state, provincial, foreign and local taxes
required to be paid or accrued as a liability under GAAP (after taking
into account any tax credits or deductions and any tax sharing
agreements available as a direct result of such Asset Disposition), as
a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance
with the terms of any Lien upon such assets, or which must by its
terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the proceeds from
such Asset Disposition;
(3) all distributions and other payments required to be
made to minority interest holders in Subsidiaries or joint ventures as
a result of such Asset Disposition; and
(4) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset
Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition (including, but not limited to, those in
respect of indemnification obligations).
provided, however, that any amounts deposited into escrow or otherwise held back
shall not be deemed to be Net Available Cash unless and until such amounts are
released to the Company or a Restricted Subsidiary without restriction.
"Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents' fees,
listing fees, discounts or commissions and brokerage, consultant and other fees
and charges actually Incurred in connection with such issuance or sale and net
of taxes
18
paid or payable as a result of such issuance or sale (after taking into account
any available tax credit or deductions and any tax sharing arrangements).
"New Holdings" means NBC Holdings Corp., a Delaware
corporation.
"Non U.S. Person" means a person who is not a U.S. person, as
described in Regulation S.
"Note Register" means the register of Securities, maintained
by the Trustee, pursuant to Section 2.3.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Indebtedness" means Indebtedness that ranks
equally in right of payment to the Securities.
"Permitted Holders" means each of (i) Weston Presidio Capital
III, L.P., Weston Presidio Capital IV, L.P., WPC Entrepreneur Fund II, L.P. and
WPC Entrepreneur Fund II, L.P. (collectively, the "WP Funds") and any of their
respective Affiliates or limited partners, to the extent such limited partners
received Capital Stock of the Company or New Holdings in a general distribution
by a WP Fund of such Capital Stock to its limited partners; (ii) any officer or
other member of management or employee employed by the Company or any Subsidiary
as of the date of this Indenture; (iii) family members or relatives of the
persons described in clause (ii); and (iv) in the event of the incompetence or
death of any of the persons described in clauses (ii), such person's estate,
executor, administrator, committee or other personal representatives or
beneficiaries.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in:
(1) a Restricted Subsidiary or a Person which will, upon
the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted
Subsidiary is a Related Business;
(2) 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
Restricted Subsidiary; provided, however, that such Person's primary
business is a Related Business;
19
(3) cash and Cash Equivalents;
(4) receivables owing to the Company or any Restricted
Subsidiary created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(5) 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;
(6) loans or advances to employees (other than executive
officers) made in the ordinary course of business consistent with past
practices of the Company or such Restricted Subsidiary;
(7) Capital 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 or pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of a debtor;
(8) Investments made as a result of the receipt of
non-cash consideration from an Asset Disposition that was made pursuant
to and in compliance with Section 3.7 of this Indenture;
(9) Investments in existence on the Issue Date;
(10) Interest Rate Agreements and related Hedging
Obligations, which transactions or obligations are Incurred in
compliance with Section 3.3 of this Indenture;
(11) Investments by the Company or any of its Restricted
Subsidiaries, together with all other Investments pursuant to this
clause (11), in an aggregate amount at the time of such Investment not
to exceed $5.0 million outstanding at any one time (with the fair
market value of such Investment being measured at the time made and
without giving effect to subsequent changes in value); and
(12) Guarantees issued in accordance with Section 3.3 of
this Indenture.
"Permitted Liens" means, with respect to any Person:
(1) Liens securing Indebtedness and other obligations
under the Credit Agreement and Hedging Obligations with any of the
banks and other financial institutions or entities party to the Credit
Agreement and Liens on assets of Restricted Subsidiaries securing
Guarantees of Indebtedness and other obligations under other
Indebtedness permitted to be Incurred under this Indenture;
(2) pledges or deposits by such Person under workmen's
compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection
20
with bids, tenders, contracts (other than for the payment of
Indebtedness) or leases to which such Person is a party, or deposits to
secure public or statutory obligations of such Person or deposits of
cash or United States government bonds to secure surety or appeal bonds
to which such Person is a party, or deposits as security for contested
taxes or import or customs duties or for the payment of rent, in each
case Incurred in the ordinary course of business;
(3) Liens imposed by law, including carriers',
warehousemen's and mechanics' Liens, in each case for sums not yet due
or being contested in good faith by appropriate proceedings if a
reserve or other appropriate provisions, if any, as shall be required
by GAAP shall have been made in respect thereof;
(4) Liens for taxes, assessments or other governmental
charges not yet subject to penalties for non-payment or which are being
contested in good faith by appropriate proceedings provided appropriate
reserves required pursuant to GAAP have been made in respect thereof;
(5) Liens in favor of issuers of surety or performance
bonds or letters of credit or bankers' acceptances issued pursuant to
the request of and for the account of such Person in the ordinary
course of its business; provided, however, that such letters of credit
do not constitute Indebtedness;
(6) encumbrances, ground leases, easements or
reservations of, or rights of others for, licenses, rights of way,
sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning, building codes or other restrictions (including,
without limitation, minor defects or irregularities in title and
similar encumbrances) as to the use of real properties or liens
incidental to the conduct of the business of such Person or to the
ownership of its properties which do not in the aggregate materially
adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;
(7) Liens securing Hedging Obligations so long as the
related Indebtedness is, and is permitted to be under this Indenture,
secured by a Lien on the same property securing such Hedging
Obligation;
(8) leases, licenses, subleases and sublicenses of assets
(including, without limitation, real property and intellectual property
rights) which do not materially interfere with the ordinary conduct of
the business of the Company or any of its Restricted Subsidiaries;
(9) judgment Liens not giving rise to an Event of Default
so long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment have not been finally terminated or the period within which
such proceedings may be initiated has not expired;
(10) Liens for the purpose of securing the payment of all
or a part of the purchase price of, or Capitalized Lease Obligations,
purchase money obligations or other
21
payments Incurred to finance the acquisition, improvement or
construction of, assets or property acquired or constructed in the
ordinary course of business; provided that:
(a) the aggregate principal amount of
Indebtedness secured by such Liens is otherwise permitted to
be Incurred under this Indenture and does not exceed the cost
of the assets or property so acquired or constructed; and
(b) such Liens are created within 180 days of
construction or acquisition of such assets or property and do
not encumber any other assets or property of the Company or
any Restricted Subsidiary other than such assets or property
and assets affixed or appurtenant thereto;
(11) Liens arising solely by virtue of any statutory or
common law provisions relating to banker's Liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds
maintained with a depositary institution; provided that:
(a) such deposit account is not a dedicated cash
collateral account and is not subject to restrictions against
access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board; and
(b) such deposit account is not intended by the
Company or any Restricted Subsidiary to provide collateral to
the depository institution;
(12) Liens arising from Uniform Commercial Code financing
statement filings regarding operating leases entered into by the
Company and its Restricted Subsidiaries in the ordinary course of
business;
(13) Liens existing on the Issue Date;
(14) Liens on property or shares of stock of a Person at
the time such Person becomes a Restricted Subsidiary; provided,
however, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such other Person becoming a
Restricted Subsidiary; provided further, however, that any such Lien
may not extend to any other property owned by the Company or any
Restricted Subsidiary;
(15) Liens on property at the time the Company or a
Restricted Subsidiary acquired the property, including any acquisition
by means of a merger or consolidation with or into the Company or any
Restricted Subsidiary; provided, however, that such Liens are not
created, Incurred or assumed in connection with, or in contemplation
of, such acquisition; provided further, however, that such Liens may
not extend to any other property owned by the Company or any Restricted
Subsidiary;
(16) Liens securing Indebtedness or other obligations of a
Restricted Subsidiary owing to the Company or a Restricted Subsidiary;
(17) Liens securing the Securities and Subsidiary
Guarantees; and
22
(18) Liens securing Refinancing Indebtedness Incurred to
refinance
Indebtedness that was previously so secured, provided that any such
Lien is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under
which the original Lien arose, could secure) the Indebtedness being
refinanced or is in respect of property that is the security for a
Permitted Lien hereunder.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company, government or any agency or political subdivision
hereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however designated)
which is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"QIB" means any "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act).
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refund, refinance, replace, exchange, renew, repay or extend (including
pursuant to any defeasance or discharge mechanism) (collectively, "refinance,"
"refinances," and "refinanced" shall have a correlative meaning) any
Indebtedness existing on the date of this Indenture or Incurred in compliance
with this Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary and Indebtedness of any Restricted
Subsidiary that refinances Indebtedness of another Restricted Subsidiary)
including Indebtedness that refinances Refinancing Indebtedness, provided,
however, that:
(1) (a) if the Stated Maturity of the Indebtedness being
refinanced is earlier than the Stated Maturity of the Securities, the
Refinancing Indebtedness has a Stated Maturity no earlier than the
Stated Maturity of the Indebtedness being refinanced or (b) if the
Stated Maturity of the Indebtedness being refinanced is later than the
Stated Maturity of the Securities, the Refinancing Indebtedness has a
Stated Maturity later than the Stated Maturity of the Securities;
(2) the Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced;
(3) such Refinancing Indebtedness is Incurred in an
aggregate principal amount (or if issued with original issue discount,
an aggregate issue price) that is equal to or less than the sum of the
aggregate principal amount (or if issued with original issue discount,
the aggregate accreted value) then outstanding of the Indebtedness
being refinanced (plus, without duplication, any additional
Indebtedness Incurred to pay interest or premiums required by the
instruments governing such existing Indebtedness and fees Incurred in
connection therewith); and
23
(4) if the Indebtedness being refinanced is subordinated
in right of payment to the Securities or the Subsidiary Guarantee, such
Refinancing Indebtedness is subordinated in right of payment to the
Securities or the Subsidiary Guarantee on terms at least as favorable
to the Holders as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Registered Exchange Offer" shall have the meaning set forth
in the Registration Rights Agreement.
"Registration Rights Agreement" means that certain
registration rights agreement dated as of the date of this Indenture by and
among the Company and the initial purchasers set forth therein, and with respect
to any Additional Securities, one or more substantially similar registration
rights agreements among the Company and the other parties thereto, as such
agreement(s) may be amended, from to time.
"Related Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Company and
its Restricted Subsidiaries on the Issue Date.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Period" means the 40 consecutive days beginning on
and including the later of (A) the day on which the Initial Securities are
offered to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date or the date on which any Additional
Securities are originally issued in the form of Initial Securities as the case
may be.
"Restricted Securities Legend" means the Private Placement
Legend set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set
forth in clause (B) of Section 2.1(c), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or a Restricted
Subsidiary leases it from such Person.
"SEC" means the United States Securities and Exchange
Commission.
"Securities" means the collective reference to the Initial
Securities, Additional Securities and Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by the Depositary), or any successor Person
thereto and shall initially be the Trustee.
24
"Senior Subordinated Note Indenture" means the Indenture dated
as of the date hereof among Nebraska Book, the guarantors party thereto and the
Trustee relating to the Senior Subordinated Notes.
"Senior Subordinated Notes" means the $175.0 million aggregate
principal amount of 8-5/8% Senior Subordinated Notes due 2012 of Nebraska Book,
including any exchange notes issued pursuant to the Senior Subordinated
Registration Rights Agreement.
"Senior Subordinated Registration Rights Agreement" means that
certain registration rights agreement dated as of the date of the Senior
Subordinated Note Indenture by and among Nebraska Book, the subsidiary guarantor
party thereto and the initial purchasers set forth therein, and with respect to
any additional notes issued pursuant to the Senior Subordinated Note Indenture,
one or more substantially similar registration rights agreements among Nebraska
Book and the other parties thereto, as such agreement(s) may be amended, from to
time.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision, but shall not include any contingent obligations
to repay, redeem or repurchase any such principal prior to the date originally
scheduled for the payment thereof.
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means (a) any corporation,
association or other business entity (other than a partnership, joint venture,
limited liability company or similar entity) of which more than 50% of the total
ordinary voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof (or persons performing similar functions) or (b) any
partnership, joint venture, limited liability company or similar entity of which
more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general or limited partnership interests, as applicable, is,
in the case of clauses (a) and (b), at the time owned or controlled, directly or
indirectly, by (1) such Person, (2) such Person and one or more Subsidiaries of
such Person or (3) one or more Subsidiaries of such Person. Unless otherwise
specified herein, each reference to a Subsidiary will refer to a Subsidiary of
the Company.
"Subsidiary Guarantee" means, individually, any Guarantee of
payment of the Securities by a Subsidiary Guarantor pursuant to the terms of
this Indenture and any supplemental indenture thereto. Each such Subsidiary
Guarantee will be in the form prescribed by this Indenture.
"Subsidiary Guarantor" means each Restricted Subsidiary of the
Company that has guaranteed any Indebtedness of the Company and executed a
Subsidiary Guarantee in
25
accordance with the provisions of this Indenture, but excluding any Restricted
Subsidiary that in the future is released from a guarantee of Indebtedness of
the Company that resulted in the obligation to guarantee the Securities.
"10-3/4% Notes" means the senior discount debentures of the
Company due 2009.
"TIA" or "Trust Indenture Act" means the Trust Indenture Act
of 1939 (15 U.S.C. Sections 77aaa-77bbbb), as in effect on the date of this
Indenture.
"Transaction" shall have the meaning set forth in the Offering
Memorandum, dated February 27, 2004, relating to the Securities.
"Trustee" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Company in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) to be an Unrestricted Subsidiary only if:
(1) such Subsidiary or any of its Subsidiaries does not
own any Capital Stock or Indebtedness of or have any Investment in, or
own or hold any Lien on any property of, any other Subsidiary of the
Company which is not a Subsidiary of the Subsidiary to be so designated
or otherwise an Unrestricted Subsidiary;
(2) such designation and the Investment of the Company in
such Subsidiary complies with Section 3.5 of this Indenture;
(3) such Subsidiary, either alone or in the aggregate
with all other Unrestricted Subsidiaries, does not operate, directly or
indirectly, all or substantially all of the business of the Company and
its Subsidiaries;
(4) such Subsidiary is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has any
direct or indirect obligation:
(a) to subscribe for additional Capital Stock of
such Person; or
26
(b) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any
specified levels of operating results; and
(5) on the date such Subsidiary is designated an
Unrestricted Subsidiary, such Subsidiary is not a party to any
agreement, contract, arrangement or understanding with the Company or
any Restricted Subsidiary with terms substantially less favorable to
the Company than those that might have been obtained from Persons who
are not Affiliates of the Company.
Any such designation by the Board of Directors of the Company
shall be evidenced to the Trustee by filing with the Trustee a resolution of the
Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying that such designation complies with the
foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to
meet the foregoing requirements as an Unrestricted Subsidiary, it shall
thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture
and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of
such date.
The Board of Directors of the Company may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately
after giving effect to such designation, no Default or Event of Default shall
have occurred and be continuing or would occur as a consequence thereof (A) in
the case of any Subsidiary of Nebraska Book, Nebraska Book could Incur at least
$1.00 of additional Indebtedness under the Section 3.3(a) of this Indenture on a
pro forma basis taking into account such designation or (B) in the case of any
Subsidiary of the Company that is not also a Subsidiary of Nebraska Book, the
Company could Incur at least $1.00 of additional Indebtedness under Section
3.3(a) of this Indenture on a pro forma basis taking into account such
designation.
"U.S. Government Obligations" means securities that are (a)
direct obligations of the United States of America for the timely payment of
which its full faith and credit is pledged or (b) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation of the United States of
America, which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act), as custodian with respect
to any such U.S. Government Obligations or a specific payment of principal of or
interest on any such U.S. Government Obligations held by such custodian for the
account of the holder of such depositary receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received
by the custodian in respect of the U.S. Government Obligations or the specific
payment of principal of or interest on the U.S. Government Obligations evidenced
by such depositary receipt.
"Voting Stock" of a corporation means all classes of Capital
Stock of such corporation then outstanding and normally entitled to vote in the
election of directors.
27
"Wholly-Owned Subsidiary" means a Restricted Subsidiary, all
of the Capital Stock of which (other than directors' qualifying shares) is owned
by the Company or another Wholly-Owned Subsidiary.
SECTION 1.2. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction".............................................................. 3.8
"Agent Member"....................................................................... 2.1(d)
"Asset Disposition Offer"............................................................ 3.7(b)
"Asset Disposition Offer Amount"..................................................... 3.7(c)
"Asset Disposition Offer Period"..................................................... 3.7(c)
"Asset Disposition Purchase Date".................................................... 3.7(c)
"Authenticating Agent"............................................................... 2.2
"Bankruptcy Law"..................................................................... 6.1
"Change of Control Offer"............................................................ 3.9
"Change of Control Payment".......................................................... 3.9
"Change of Control Payment Date"..................................................... 3.9
"Company Order"...................................................................... 2.2
"covenant defeasance option"......................................................... 8.1(b)
"cross acceleration provision"....................................................... 6.1
"Custodian".......................................................................... 6.1
"Definitive Securities".............................................................. 2.1(e)
"Event of Default"................................................................... 6.1
"Excess Proceeds".................................................................... 3.7(b)
"Exchange Global Note"............................................................... 2.1(a)
"Global Securities".................................................................. 2.1(a)
"IAI" 2.1(a)
"Institutional Accredited Investor Global Note"...................................... 2.1(a)
"Institutional Accredited Investor Note"............................................. 2.1(a)
"legal defeasance option"............................................................ 8.1(b)
"Notice of Default".................................................................. 6.1
"Pari Passu Notes"................................................................... 3.7(b)
"Paying Agent"....................................................................... 2.3
"Payment Default".................................................................... 6.1
"Private Placement Legend"........................................................... 2.1(c)
"Registrar".......................................................................... 2.3
"Regulation S"....................................................................... 2.1
"Regulation S Certificate"........................................................... 2.1
"Regulation S Global Note"........................................................... 2.1
"Regulation S Legend"................................................................ 2.1
"Regulation S Note".................................................................. 2.1
"Regulation S Permanent Global Note"................................................. 2.1
"Regulation S Temporary Global Note"................................................. 2.1
"Release Date"....................................................................... 2.1
"Resale Restriction Termination Date"................................................ 2.6(a)
28
Defined in
Term Section
---- -------
"Restricted Payment"................................................................. 3.5
"Rule 144A".......................................................................... 2.1
"Rule 144A Global Note".............................................................. 2.1
"Rule 144A Note"..................................................................... 2.1
"Special Interest Payment Date"...................................................... 2.13(a)
"Special Record Date"................................................................ 2.13(a)
"Successor Company".................................................................. 4.1
SECTION 1.3. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by the TIA reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to Secured Indebtedness merely by virtue of its
nature as unsecured Indebtedness;
29
(7) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal amount
thereof that would be shown on a balance sheet of the issuer dated such
date prepared in accordance with GAAP;
(8) the principal amount of any Preferred Stock shall be
(i) the maximum liquidation value of such Preferred Stock or (ii) the
maximum mandatory redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater;
(9) all references to (a) Initial Securities shall refer
also to any Additional Securities issued in the form of Initial
Securities and (b) Exchange Securities shall refer also to any
Additional Securities issued in the form of Exchange Securities, in
each case, pursuant to Section 2.16; and
(10) all references to the date the Securities were
originally issued shall refer to the Issue Date or the date any
Additional Securities were originally issued, as the case may be.
ARTICLE II
The Securities
SECTION 2.1. Form, Dating and Terms. (a) The Initial
Securities are being offered and sold by the Company pursuant to a Purchase
Agreement, dated February 27, 2004, between the Company and X.X. Xxxxxx
Securities Inc., as representative of the several initial purchasers listed in
Schedule 1 thereto. The Initial Securities will be resold initially only to (A)
qualified institutional buyers (as defined in Rule 144A under the Securities Act
("Rule 144A")) in reliance on Rule 144A ("QIBs") and (B) Persons other than U.S.
Persons (as defined in Regulation S under the Securities Act ("Regulation S"))
in reliance on Regulation S. Such Initial Securities may thereafter be
transferred to among others, QIBs, purchasers in reliance on Regulation S and to
institutional "accredited investors", as defined in Rule 501(a)(1), (2), (3) and
(7) of Regulation D under the Securities Act who are not QIBs ("IAIs") in
accordance with Rule 501 of the Securities Act in accordance with the procedures
described herein.
Initial Securities offered and sold to QIBs in the United
States of America (the "Rule 144A Note") will be issued on the Issue Date in the
form of a permanent global Security, without interest coupons, substantially in
the form of Exhibit A, which is hereby incorporated by reference and made a part
of this Indenture, together with appropriate legends as set forth in Section
2.1(c) (the "Rule 144A Global Note"), deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The Rule 144A Global Note may be represented by
more than one certificate, if so required by the Depositary's rules regarding
the maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Rule 144A Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States
of America ("Regulation S Note") in reliance on Regulation S will be issued on
the Issue Date in the form of
30
a temporary global Security, without interest coupons, substantially in the form
set forth in Exhibits A and B, which are hereby incorporated by reference and
made a part of this Indenture, together with appropriate legends as set forth in
Section 2.1(c) (a "Regulation S Temporary Global Note"). Beneficial interests in
a Regulation S Temporary Global Note will be exchangeable for beneficial
interests in a single permanent global security (the "Regulation S Permanent
Global Note", together with the Regulation S Temporary Global Note, the
"Regulation S Global Note") on or after the expiration of the Restricted Period
(the "Release Date") upon the receipt by the Trustee or its agent of a
certificate certifying that the Holder of the beneficial interest in the
Regulation S Temporary Global Note is a non-United States Person within the
meaning of Regulation S (a "Regulation S Certificate"), substantially in the
form set forth in Section 2.8. Upon receipt by the Trustee or Paying Agent of a
Regulation S Certificate, (i) with respect to the first such Regulation S
Certificate, the Company shall execute and upon receipt of a Company Order for
authentication, the Authenticating Agent (as defined in Section 2.2) shall
authenticate and deliver to the custodian, the applicable Regulation S Permanent
Global Note and (ii) with respect to the first and all subsequent Regulation S
Certificates, the custodian shall exchange on behalf of the applicable
beneficial owners the portion of the applicable Regulation S Temporary Global
Note covered by such Regulation S Certificates for a comparable portion of the
applicable Regulation S Permanent Global Note. Upon any exchange of a portion of
a Regulation S Temporary Global Note for a comparable portion of a Regulation S
Permanent Global Note, the custodian shall endorse on the schedules affixed to
each of such Regulation S Global Note (or on continuations of such schedules
affixed to each of such Regulation S Global Note and made parts thereof)
appropriate notations evidencing the date of transfer and (x) with respect to
the applicable Regulation S Temporary Global Note, a decrease in the principal
amount thereof equal to the amount covered by the applicable certification and
(y) with respect to the applicable Regulation S Permanent Global Note, an
increase in the principal amount thereof equal to the principal amount of the
decrease in the applicable Regulation S Temporary Global Note pursuant to clause
(x) above. The Regulation S Global Note will be deposited with the Trustee, as
custodian for the Depositary, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Regulation S Global Note may be
represented by more than one certificate, if so required by the Depositary's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Regulation S Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Initial Securities resold to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities
Act) in the United States of America (the "Institutional Accredited Investor
Note") will be issued in the form of a permanent global Security substantially
in the form set forth in Exhibit A hereto, which is hereby incorporated by
reference and made a part of this Indenture, together with appropriate legends
as set forth in Section 2.1(c) (the "Institutional Accredited Investor Global
Note") deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The Institutional Accredited Investor Global Note may be represented
by more than one certificate, if so required by the Depositary's rules regarding
the maximum principal amount to be represented by a single certificate. The
aggregate principal amount of the Institutional Accredited Investor Global Note
may from time to time be increased or decreased
31
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A
Note, the Regulation S Note and the Institutional Accredited Investor Note will
be issued in the form of a permanent global Security substantially in the form
set forth in Exhibit B hereto, which is hereby incorporated by reference and
made a part of this Indenture, deposited with the Trustee as hereinafter
provided, with the appropriate legend set forth in Section 2.1(c) hereof (the
"Exchange Global Note"). The Exchange Global Note may be represented by more
than one certificate, if so required by the Depositary's rules regarding the
maximum principal amount to be represented by a single certificate.
The Rule 144A Global Note, the Regulation S Global Note, the
Exchange Global Note and the Institutional Accredited Investor Global Note are
sometimes collectively herein referred to as the "Global Securities."
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 pursuant to Section 2.3;
provided, however, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer to an account located in the United States maintained by the payee.
Payments in respect to Securities represented by a Global Security (including
principal, premium, if any, and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the Depositary.
The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, in addition to those set forth on
Exhibit A and Exhibit B and Section 2.1(c). The Company and the Trustee shall
approve the forms of the Securities and any notation, endorsement or legend on
them. Each Security shall be dated the date of its authentication. The terms of
the Securities set forth in Exhibit A and Exhibit B are part of the terms of
this Indenture and, to the extent applicable, the Company, the Subsidiary
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only
in fully registered form, without coupons, and only in denominations of $1,000
and any integral multiple thereof.
(c) 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 or a similar agreement,
(A) such Rule 144A Global Note and the
Institutional Accredited Investor Global Note shall bear the
following legend (the "Private Placement Legend") on the face
thereof:
32
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF, AGREES
ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY),
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF SECURITIES OF $250,000, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN
CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO 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 PURSUANT TO CLAUSES (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."; and
33
(B) the Regulation S Global Note shall bear the
following legend (the "Regulation S Legend") on the face
thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A
U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S.
PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT ("REGULATION S"), (2) BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY,
PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS FORTY DAYS 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
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S, (E) TO AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR
ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH
ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F)
PURSUANT TO 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 PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM AND IN THE CASE OF
THE FOREGOING CLAUSE (E), A CERTIFICATE OF TRANSFER IN
34
THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND
THE TRUSTEE. THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE
DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DAY ON
WHICH THE SECURITIES ARE OFFERED TO PERSONS OTHER THAN
DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE DATE OF
THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT."
(C) The Global Securities, whether or not an
Initial Security, shall bear the following legend on the face
thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO
A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.":
(D) The Regulation S Temporary Global Note shall
also bear the following legend on the face thereof:
THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF
REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY GLOBAL
NOTE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR
DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE REFERRED TO
BELOW.
35
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON
UNLESS THE REQUIRED CERTIFICATIONS HAVE BEEN DELIVERED
PURSUANT TO THE TERMS OF THE INDENTURE.
(d) Book-Entry Provisions. (i) This Section 2.1(d) shall
apply only to Global Securities deposited with the Trustee, as custodian for the
Depositary.
(ii) Each Global Security initially shall (x) be
registered in the name of the Depositary for such Global Security or the nominee
of such Depositary, (y) be delivered to the Trustee as custodian for such
Depositary and (z) bear legends as set forth in Section 2.1(c).
(iii) 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 by the Trustee as the
custodian of the Depositary or under such 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 of the Depositary governing the exercise of the
rights of a Holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to Section 2.1(e) to
beneficial owners who are required to hold Definitive Securities, the Security
Trustee shall reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Definitive Securities of like tenor and amount.
(v) In connection with the transfer of an entire Global
Security to beneficial owners pursuant to Section 2.1(e), such Global Security
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 such Global Security, an equal aggregate principal amount of
Definitive Securities of authorized denominations.
(vi) 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.
(vii) Any Holder of a Global Security shall, by acceptance
of such Global Security, agree that transfers of beneficial interests in such
Global Security may be effected only through a book-entry system maintained by
(a) the Holder of such Global Security (or its agent)
36
or (b) any Holder of a beneficial interest in such Global Security, and that
ownership of a beneficial interest in such Global Security shall be required to
be reflected in a book entry.
(e) Definitive Securities. Except as provided below,
owners of beneficial interests in Global Securities will not be entitled to
receive certificated Securities ("Definitive Securities"). If required to do so
pursuant to any applicable law or regulation, beneficial owners may obtain
Definitive Securities in exchange for their beneficial interests in a Global
Security upon written request in accordance with the Depositary's and the
Registrar's procedures. In addition, Definitive Securities shall be transferred
to all beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depositary notifies the Company that it is unwilling or
unable to continue as depositary for such Global Security or the Depositary
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depositary is required to be so registered in order to act as depositary,
and in each case a successor depositary is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Security shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depositary.
(f) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d)(iv) or (v) shall,
except as otherwise provided by Section 2.6(c), bear the applicable legend
regarding transfer restrictions applicable to the Definitive Security set forth
in Section 2.1(c).
(g) In connection with the exchange of a portion of a
Definitive Security for a beneficial interest in a Global Security, the Trustee
shall cancel such Definitive Security, and the Company shall execute, and the
Trustee shall authenticate and deliver, to the transferring Holder a new
Definitive Security representing the principal amount not so transferred.
SECTION 2.2. Execution and Authentication. One Officer shall
sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the time
the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually authenticates the Security. The signature of the Trustee on
a Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture. A Security shall be dated
the date of its authentication.
At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery: (1) Initial Securities for original issue on the Issue Date in an
aggregate principal amount at maturity of $77.0 million, (2) any Additional
Securities for original issue from time to time after the Issue Date in such
principal amounts as set forth in Section 2.16 and (3) Exchange Securities for
issue only in a Registered Exchange Offer pursuant to the Registration Rights
Agreement, and only in exchange for Initial Securities of an equal principal
amount, in each case upon a written order of the Company signed by two Officers
or by an Officer and either an Assistant Treasurer or an Assistant Secretary of
the Company (the "Company Order"). Such Company Order shall specify
37
the amount of the Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and whether the Securities
are to be Initial Securities or Exchange Securities. The aggregate principal
amount at maturity of Initial Securities which may be authenticated and
delivered under this Indenture is limited to $77.0 million outstanding.
Additionally, the Company may from time to time, without notice to or consent of
the Holders, issue such additional principal amounts of Additional Securities as
may be issued and authenticated pursuant to clause (2) of this paragraph, and
Securities authenticated and delivered upon registration or transfer of, or in
exchange for, or in lieu of, other Securities of the same class pursuant to
Section 2.6, Section 2.9, Section 2.11, Section 5.8, Section 9.5 and except for
transactions similar to the Registered Exchange Offer. All Securities issued on
the Issue Date shall be identical in all respects other than issue dates, the
date from which interest accrues and any changes relating thereto.
Notwithstanding anything to the contrary contained in this Indenture, all notes
issued under this Indenture shall vote and consent together on all matters as
one class and no series of notes will have the right to vote or consent as a
separate class on any matter.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company or any Subsidiary Guarantor, if any,
pursuant to Article IV, 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 or any Subsidiary Guarantor 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 IV, any of the Securities authenticated or delivered prior
to such consolidation, merger, conveyance, transfer, lease or other disposition
may, from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section 2.2 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 new name.
SECTION 2.3. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Note
38
Register"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional paying
agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its Restricted Subsidiaries may act as Paying Agent,
Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent for the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least
10:00 a.m. (New York City time) on the date on which any principal of or
interest on any Security is due and payable, the Company shall deposit with the
Paying Agent a sum sufficient to pay such principal or interest when due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that such Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money held by such Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company or any Subsidiary Guarantor in making any
such payment. If the Company or a Subsidiary acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent (other than the
Trustee) to pay all money held by it to the Trustee and to account for any funds
disbursed by such Paying Agent. Upon complying with this Section, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money delivered to the Trustee. Upon any bankruptcy,
reorganization or similar proceeding with respect to the Company, the Trustee
shall serve as Paying Agent for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to
any proposed transfer of a Rule 144A Note or an Institutional Accredited
Investor Note 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"):
39
(i) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB
shall be made upon the representation of the transferee that it is
purchasing the 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 "qualified institutional buyer" 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 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 its foregoing representations
in order to claim the exemption from registration provided by Rule
144A;
(ii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an IAI
shall be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.7 hereof from the
proposed transferee and, if requested by the Company or the Trustee,
the delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.8 hereof
from the proposed transferee and, if requested by the Company or the
Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them.
(b) The following provisions shall apply with respect to
any proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(i) a transfer of a Regulation S Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee that it is purchasing the 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 "qualified institutional buyer"
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 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
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial
interest therein to an IAI shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in
Section 2.7 hereof from the proposed transferee and, if requested by
the Company or the Trustee, the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them;
and
(iii) a transfer of a Regulation S Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by the
Trustee or its agent of a certificate
40
substantially in the form set forth in Section 2.8 hereof from the
proposed transferee and, if requested by the Company or the Trustee,
receipt by the Trustee or its agent of an opinion of counsel,
certification and/or other information satisfactory to each of them.
Prior to the expiration of the Restricted Period, a
registration of transfer of a Regulation S Note or a beneficial interest therein
shall only be made to a Non-U.S. Person and shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set forth in
Section 2.8 hereof from the proposed transferee and, if requested by the
Company, receipt by the Trustee or its agent of an opinion of counsel,
certification and/or other information satisfactory to the Company.
After the expiration of the Restricted Period, interests in
the Regulation S Note may be transferred in accordance with applicable law
without requiring certification set forth in Section 2.8 or any additional
certification.
(c) Restricted Securities Legend. Upon the transfer,
exchange or replacement of Securities not bearing a Restricted Securities
Legend, the Registrar shall deliver Securities that do not bear a Restricted
Securities Legend. Upon the transfer, exchange or replacement of Securities
bearing a Restricted Securities Legend, the Registrar shall deliver only
Securities that bear a Restricted Securities Legend unless there is delivered to
the Registrar an Opinion of Counsel 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.
(d) The Company shall deliver to the Trustee an Officer's
Certificate setting forth the Resale Restriction Termination Date and the
Restricted Period.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.1 or this Section
2.6. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges
of Securities.
(i) To permit registrations of transfers and exchanges,
the Company shall, subject to the other terms and conditions of this
Article II, execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-registrar's
request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes, assessments or similar governmental charges
payable upon exchange or transfer pursuant to Sections 3.7, 3.9 or
9.5).
(iii) The Registrar or co-registrar shall not be required
to register the transfer of or exchange of any Security for a period
beginning (1) 15 days before the mailing of a notice of an offer to
repurchase or redeem Securities and ending at the close of business
41
on the day of such mailing or (2) 15 days before an interest payment
date and ending on such interest payment date.
(iv) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent,
the Registrar or any co-registrar may deem and treat the person in
whose name a Security is registered as the absolute owner of such
Security for the purpose of receiving payment of principal of and
interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d) shall, except
as otherwise provided by Section 2.6(c), bear the applicable legend
regarding transfer restrictions applicable to the Definitive Security
set forth in Section 2.1(c).
(vi) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (i) The Trustee shall
have no responsibility or obligation to any beneficial owner of a Global
Security, a member of, or a participant in, the Depositary or other Person with
respect to the accuracy of the records of the Depositary or its nominee or of
any participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depositary) of any notice
(including any notice of redemption) or the payment of any amount or delivery of
any Securities (or other security or property) under or with respect to such
Securities. All notices and communications to be given to the Holders and all
payments to be made to Holders in respect of the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through the
Depositary subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and shall be fully protected in relying upon information
furnished by the Depositary with respect to its members, participants and any
beneficial owners.
(ii) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between or
among Depositary participants, members or beneficial owners in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
SECTION 2.7. Form of Certificate to be Delivered in Connection
with Transfers to Institutional Accredited Investors.
42
[Date]
BNY Midwest Trust Company
Xxx Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Ladies and Gentlemen:
This certificate is delivered to request a transfer of
$________principal amount at maturity of the 11% Senior Discount Notes due 2013
(the "Securities") of NBC Acquisition Corp. (the "Company").
Upon transfer, the Securities would be registered in the name
of the new beneficial owner as follows:
Name: ___________________________________
Address: _______________________________
Taxpayer ID Number: ____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act")) purchasing for our own account or for the
account of such an institutional "accredited investor" at least $250,000
principal amount of the Securities, and we are acquiring the Securities not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities Act. We have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risk of our investment in the Securities and we invest in or purchase securities
similar to the Securities in the normal course of our business. We and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment.
2. We understand that the Securities have not been
registered under the Securities Act and, unless so registered, may not be sold
except as permitted in the following sentence. We agree on our own behalf and on
behalf of any investor account for which we are purchasing 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) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional
43
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor," in each case in a
minimum principal amount of Securities of $250,000 or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the 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 Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" (within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Termination Date of the Securities pursuant to clauses (d), (e) or (f) above to
require the delivery of an opinion of counsel, certifications and/or other
information satisfactory to the Company and the Trustee.
TRANSFEREE:_____________________
BY______________________________
SECTION 2.8. Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S.
[Date]
BNY Midwest Trust Company
Xxx Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
Re: NBC Acquisition Corp.
11% Senior Discount Notes due 2013 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate
principal amount at maturity of the Securities, we confirm that such sale has
been effected pursuant to and in accordance with Regulation S under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, we represent that:
(a) the offer of the Securities was not made to a person
in the United States;
(b) either (i) 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 (ii) the transaction was executed in, on
44
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;
(c) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(a)(2) or
Rule 904(a)(2) of Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(b)(2) or Rule 904(b)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(b)(2) or Rule 904(b)(1), as the case may
be.
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
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.
If a mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss which any of them may suffer if a Security is
replaced, then, in the absence of notice to the Company, any Subsidiary
Guarantor 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 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 such Security.
45
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) in connection
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, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, 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.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security ceases to be outstanding in the
event the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.9 (other than
a mutilated Security surrendered for replacement, it ceases to be outstanding
unless the Trustee and the Company receive proof satisfactory to them that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.11. Temporary Securities. Until Definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate Definitive Securities.
After the preparation of Definitive Securities, the temporary Securities shall
be exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities.
46
SECTION 2.12. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel and return to the Company all Securities surrendered for registration of
transfer, exchange, payment or cancellation and deliver a certificate of such
destruction to the Company. The Company may not issue new Securities to replace
Securities it has paid or delivered to the Trustee for cancellation.
SECTION 2.13. Payment of Interest; Defaulted Interest.
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 2.3.
Any interest on any Security which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days 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") shall be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) 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 (as defined below) 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
(not less than 30 days after such notice) of the proposed payment (the
"Special Interest Payment Date"), 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 record date (the "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 Special Interest Payment Date
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 and Special Interest
Payment Date therefor to be given in the manner provided for in Section
10.2, 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 and Special Interest Payment Date therefor having been so
given, such Defaulted Interest shall be paid on the Special Interest
Payment Date 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 (b).
47
(b) 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 2.14. Computation of Interest. Interest on the
Securities shall be computed on the basis of a 360-day year composed of twelve
30-day months.
SECTION 2.15. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such CUSIP numbers.
SECTION 2.16. Issuance of Additional Securities. The Company
shall be entitled to issue, from time to time, Additional Securities under this
Indenture which shall have identical terms as the Initial Securities issued on
the Issue Date or the Exchange Securities exchanged therefor (in each case,
other than with respect to the date of issuance, issue price and amount of
interest payable on the first payment date applicable thereto), as the case may
be. The Initial Securities issued on the Issue Date, any Additional Securities
and all Exchange Securities issued in exchange therefor shall be treated as a
single class for all purposes under this Indenture.
With respect to any Additional Securities, the Company shall
set forth in a resolution of the Board of Directors and an Officers'
Certificate, a copy of each shall be delivered to the Trustee, the following
information:
(i) the aggregate principal amount at maturity of such
Additional Securities to be authenticated and delivered pursuant to
this Indenture;
(ii) the issue price, the issue date and the "CUSIP" and
"ISIN" number of any such Additional Securities and the amount of
interest payable on the first payment date applicable thereto;
(iii) whether such Additional Securities shall be transfer
restricted securities and issued in the form of Initial Securities as
set forth in Exhibit A to this Indenture or shall be issued in the form
of Exchange Securities as set forth in Exhibit B to this Indenture; and
(iv) if applicable, the Restricted Period for such
Additional Securities.
48
ARTICLE III
Covenants
SECTION 3.1. Payment of Securities. The Company shall promptly
pay the Accreted Value of (and premium, if any) and interest on the Securities
on the dates and in the manner provided in the Securities and in this Indenture.
An installment of Accreted Value of premium, if any, and interest shall be
considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Indenture money sufficient to pay all principal
and interest then due and the Trustee or the Paying Agent, as the case may be,
is not prohibited from paying such money to the Securityholders on that date
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal amount at
maturity at the rate specified therefor in the Securities, and it shall pay
interest on overdue installments of interest at the same rate to the extent
lawful.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.
SECTION 3.2. SEC Reports and Available Information.
(a) Notwithstanding that the Company may not be subject
to the reporting requirements of Section 13 or 15(d) of the Exchange Act, to the
extent permitted by the Exchange Act, the Company will file with the SEC, and
make available to the Trustee and the registered holders of the Securities, the
annual reports and the information, documents and other reports (or copies of
such portions of any of the foregoing as the SEC may by rules and regulations
prescribe) that are specified in Sections 13 and 15(d) of the Exchange Act
within the time periods specified therein. In the event that the Company is not
permitted to file such reports, documents and information with the SEC pursuant
to the Exchange Act, the Company will nevertheless make available such Exchange
Act information to the Trustee and the holders of the Securities as if the
Company were subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act within the time periods specified therein. The Company shall also
comply with the other provisions of TIA Section 314(a).
(b) If the Company has designated any of its Subsidiaries
as Unrestricted Subsidiaries that, alone or taken together, represent 10% or
more of the Consolidated EBITDA of the Company for the most recent four
consecutive fiscal quarters presented in a particular report or other document
filed with the SEC, then the quarterly and annual financial information required
by Section 3.2(a) shall include a reasonably detailed presentation, either on
the face of the financial statements or in the footnotes to the financial
statements and in Management's Discussion and Analysis of Results of Operations
and Financial Condition, of the financial condition and results of operations of
the Company and its Restricted Subsidiaries (excluding any such Unrestricted
Subsidiaries).
49
SECTION 3.3. Limitation on Indebtedness. (a) (1) The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness (including Acquired Indebtedness); provided, however, that (i) the
Company may Incur Indebtedness if the Consolidated Coverage Ratio for the
Company is at least 2.00 to 1.00; and (ii) Nebraska Book and any Restricted
Subsidiary of Nebraska Book which guarantees the Senior Subordinated Notes may
Incur Indebtedness if the Consolidated Coverage Ratio of Nebraska Book is 2.00
to 1.00; and (2) no Default or Event of Default will have occurred or be
continuing or would occur as a consequence of Incurring the Indebtedness or
transactions relating to such Incurrence.
(b) Section 3.3(a) will not prohibit the Incurrence of
the following Indebtedness: (1) Indebtedness of Nebraska Book Incurred pursuant
to the Credit Agreement and Guarantees of the Company and its Restricted
Subsidiaries in respect of the Indebtedness Incurred pursuant to a Credit
Agreement; provided, however, that the aggregate principal amount of all
Indebtedness Incurred by Nebraska Book pursuant to this Section 3.3(b)(1) does
not exceed $250.0 million at any time outstanding, less the aggregate principal
amount of all Net Cash Proceeds from Asset Dispositions applied to permanently
reduce the commitments with respect to such Indebtedness pursuant to this
Section 3.3 described under Section 3.7; (2) Guarantees by the Subsidiary
Guarantors of Indebtedness Incurred in accordance with this Indenture; provided
that in the event such Indebtedness that is being Guaranteed is a Subordinated
Obligation or a Guarantor Subordinated Obligation, then the related Guarantee
shall be subordinated in right of payment to the Subsidiary Guarantee; (3)
Indebtedness of the Company owing to and held by any Restricted Subsidiary or
Indebtedness of a Restricted Subsidiary owing to and held by the Company or any
other Restricted Subsidiary; provided, however, (a) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all obligations with respect to the Securities;
(b) if a Subsidiary Guarantor is the obligor on such Indebtedness and the
Company or a Subsidiary Guarantor is not the obligee, such Indebtedness is
subordinated in right of payment to the Subsidiary Guarantees of such Subsidiary
Guarantor; and (c) (i) any subsequent issuance or transfer of Capital Stock or
any other event which results in any such Indebtedness being beneficially held
by a Person other than the Company or a Restricted Subsidiary of the Company;
and (ii) any sale or other transfer of any such Indebtedness to a Person other
than the Company or a Restricted Subsidiary of the Company; shall be deemed, in
each case, to constitute the Incurrence of such Indebtedness by the Company or
such Subsidiary, as the case may be; (4) Indebtedness represented by (a) the
Securities issued on the Issue Date, the Subsidiary Guarantees (if any) and the
exchange notes issued in a registered exchange offer pursuant to the
Registration Rights Agreement, the Senior Subordinated Notes, the Guarantees
issued in connection with the Senior Subordinated Notes and any exchange
guarantees, (b) any Indebtedness (other than the Indebtedness described in
clauses (1), (2), (3), (6), (8), (9) and (10) of this Section 3.3(b))
outstanding on the Issue Date and (c) any Refinancing Indebtedness Incurred in
respect of any Indebtedness described in this Section 3.3(b)(4) or Section
3.3(b)(5) or Incurred pursuant to Section 3.3(a); (5) Indebtedness of a
Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by the Company or any Restricted Subsidiary
(other than Indebtedness Incurred (a) to provide all or any portion of the funds
utilized to consummate the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or
was otherwise acquired by the Company or any Restricted Subsidiary or (b)
otherwise in connection with, or in contemplation of, such acquisition);
provided, however, that at the time such Restricted
50
Subsidiary is acquired by the Company or any Restricted Subsidiary, (A) in the
case of Indebtedness of a Restricted Subsidiary of the Company other than
Nebraska Book or a Restricted Subsidiary of Nebraska Book, the Company would
have been able to Incur $1.00 of additional Indebtedness pursuant to Section
303(a) after giving effect to the Incurrence of such Indebtedness pursuant to
this Section 3.3(b)(5) or (B) in the case of Indebtedness of a Restricted
Subsidiary of Nebraska Book, Nebraska Book would have been able to Incur $1.00
of additional Indebtedness pursuant to Section 3.3(a) after giving effect to the
Incurrence of such Indebtedness pursuant to this Section 3.3(b)(5); (6)
Indebtedness under Interest Rate Agreements; provided, that such Interest Rate
Agreements are entered into for bona fide hedging purposes of the Company or its
Restricted Subsidiaries (as determined in good faith by the Board of Directors
or senior management of the Company) and substantially correspond in terms of
notional amount, duration, currencies and interest rates, as applicable, to
Indebtedness of the Company or its Restricted Subsidiaries Incurred without
violation of this Indenture; (7) the Incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by Capitalized Lease
Obligations, mortgage financings or purchase money obligations with respect to
assets other than Capital Stock or other Investments, in each case Incurred for
the purpose of financing all or any part of the purchase price or cost of
construction or improvements of property used in the business of the Company or
such Restricted Subsidiary, in an aggregate principal amount not to exceed $10.0
million at any time outstanding; (8) Indebtedness Incurred in respect of
workers' compensation claims, self-insurance obligations, performance, surety
and similar bonds and completion guarantees provided by the Company or a
Restricted Subsidiary in the ordinary course of business; (9) Indebtedness
arising from agreements of the Company or a Restricted Subsidiary providing for
indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the disposition of any business,
assets or Capital Stock of a Restricted Subsidiary, provided that the maximum
aggregate liability in respect of all such Indebtedness shall at no time exceed
the gross proceeds actually received by the Company and its Restricted
Subsidiaries in connection with such disposition; (10) Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business, provided, however, that
such Indebtedness is extinguished within five Business Days of Incurrence; and
(11) in addition to the items referred to in clauses (1) through (10) of this
Section 3.3(b), Indebtedness of the Company and its Restricted Subsidiaries in
an aggregate outstanding principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this Section
3.3(b)(11) and then outstanding, will not exceed $20.0 million at any time
outstanding (which may be Indebtedness Incurred under or in respect of the
Credit Agreement).
(c) The Company will not Incur any Indebtedness under
Section 3.3(b) if the proceeds thereof are used, directly or indirectly, to
refinance any Subordinated Obligations of the Company unless such Indebtedness
will be subordinated to the Securities to at least the same extent as such
Subordinated Obligations. No Subsidiary Guarantor will Incur any indebtedness if
the proceeds thereof are used, directly or indirectly, to refinance any
Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such
Indebtedness will be subordinated to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee to at least the same extent as such
Guarantor Subordinated Obligations. No Restricted Subsidiary may Incur any
Indebtedness if the proceeds are used to refinance Indebtedness of the Company
(other than a refinancing of all the Securities).
51
(d) For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness Incurred pursuant to
and in compliance with, this Section 3.3: (1) in the event that Indebtedness
meets the criteria of more than one of the types of Indebtedness described in
Section 3.3(a) or (b), the Company, in its sole discretion, will classify such
item of Indebtedness on the date of Incurrence and only be required to include
the amount and type of such Indebtedness in one of such clauses; (2) all
Indebtedness outstanding on the date of this Indenture under the Credit
Agreement shall be deemed initially Incurred on the Issue Date under clause (1)
of Section 3.3(b) and not Section 3.3(a) or clause (4) of Section 3.3(b); (3)
Guarantees of, or obligations in respect of letters of credit relating to,
Indebtedness which is otherwise included in the determination of a particular
amount of Indebtedness shall not be included; (4) if obligations in respect of
letters of credit are Incurred pursuant to a Credit Agreement and are being
treated as Incurred pursuant to clause (1) of Section 3.3(b) and the letters of
credit relate to other Indebtedness, then such other Indebtedness shall not be
included; (5) the principal amount of any Disqualified Stock of the Company or a
Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not
a Subsidiary Guarantor, will be equal to the greater of the maximum mandatory
redemption or repurchase price (not including, in either case, any redemption or
repurchase premium) or the liquidation preference thereof; (6) Indebtedness
permitted by this Section 3.3 need not be permitted solely by reference to one
provision permitting such Indebtedness but may be permitted in part by one such
provision and in part by one or more other provisions of this Section 3.3
permitting such Indebtedness; and (7) the amount of Indebtedness issued at a
price that is less than the principal amount thereof will be equal to the amount
of the liability in respect thereof determined in accordance with GAAP. Accrual
of interest, accrual of dividends, the accretion of accreted value, the payment
of interest in the form of additional Indebtedness and the payment of dividends
in the form of additional shares of Preferred Stock or Disqualified Stock will
not be deemed to be an Incurrence of Indebtedness for purposes of this Section
3.3. The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof in the case of any Indebtedness issued with original
issue discount and (ii) the principal amount or liquidation preference thereof,
together with any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness. For purposes of determining compliance with any
U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was Incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that if such Indebtedness is Incurred to refinance other Indebtedness
denominated in a foreign currency, and such refinancing would cause the
applicable U.S. dollar-denominated restriction to be exceeded if calculated at
the relevant currency exchange rate in effect on the date of such refinancing,
such U.S. dollar-denominated restriction shall be deemed not to have been
exceeded so long as the principal amount of such Refinancing Indebtedness does
not exceed the principal amount of such Indebtedness being refinanced.
Notwithstanding any other provision of this Section 3.3, the maximum amount of
Indebtedness that the Company may Incur pursuant to this Section 3.3 shall not
be deemed to be exceeded solely as a result of fluctuations in the exchange rate
of currencies. The principal amount of any Indebtedness Incurred to refinance
other Indebtedness, if Incurred in a different currency from the Indebtedness
being refinanced, shall be calculated based on the currency exchange rate
applicable to the currencies in which such Refinancing Indebtedness is
denominated that is in effect on the date of such refinancing.
52
(e) If at any time an Unrestricted Subsidiary becomes a
Restricted Subsidiary, any Indebtedness of such Subsidiary shall be deemed to be
Incurred by a Restricted Subsidiary as of such date (and, if such Indebtedness
is not permitted to be Incurred as of such date under this Section 3.3, the
Company shall be in Default of this Section 3.3).
SECTION 3.4. [Reserved]
SECTION 3.5. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any of its Restricted Subsidiaries,
directly or indirectly, to (1) declare or pay any dividend or make any
distribution (whether made in cash, securities or other property) on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except: (A) dividends or distributions payable in Capital Stock of
the Company (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock of the Company; and (B) dividends or
distributions payable to the Company or a Restricted Subsidiary (and if such
Restricted Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of
common Capital Stock on a pro rata basis); (2) purchase, redeem, retire or
otherwise acquire for value any Capital Stock of the Company or any direct or
indirect parent of the Company held by Persons other than the Company or a
Restricted Subsidiary (other than in exchange for Capital Stock of the Company
(other than Disqualified Stock)); (3) purchase, repurchase, redeem, defease or
otherwise acquire or retire for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment, any Subordinated Obligations or
Guarantor Subordinated Obligations (other than the purchase, repurchase,
redemption, defeasance or other acquisition or retirement of Subordinated
Obligations or Guarantor Subordinated Obligations 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 purchase, repurchase,
redemption, defeasance or other acquisition or retirement); or (4) make any
Restricted Investment in any Person; (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Restricted
Investment referred to in clauses (1) through (4) of this Section 3.5(a) shall
be referred to herein as a "Restricted Payment"), if at the time the Company or
such Restricted Subsidiary makes such Restricted Payment: (a) a Default shall
have occurred and be continuing (or would result therefrom); or (b) (A) with
respect to a Restricted Payment by the Company, the Company is not able to Incur
an additional $1.00 of Indebtedness pursuant to Section 3.3(a) after giving
effect, on a pro forma basis, to such Restricted Payment (it being understood
that for purposes of calculating the additional Indebtedness for this purpose
only, any of the Company's non-cash interest expense and amortization of
original issue discount in respect of the Securities shall be excluded); or (B)
with respect to a Restricted Payment by Nebraska Book or any Restricted
Subsidiary that is a Guarantor of the Senior Subordinated Notes, Nebraska Book
and any Restricted Subsidiary of Nebraska Book that is a Guarantor of the Senior
Subordinated Notes, is not able to incur an additional $1.00 of Indebtedness
pursuant to the first paragraph under Section 3.3 after giving effect, on a pro
forma basis, to such Restricted Payment; or (c) the aggregate amount of such
Restricted Payment and all other Restricted Payments declared or made subsequent
to the Issue Date would exceed the sum of: (i) 50% of Consolidated Net Income
(it being understood that for purposes of calculating Consolidated Net Income
pursuant to this clause (c)(i) only, any of the Company's non-cash interest
expense and
53
amortization of original issue discount in respect of the Securities shall be
excluded) for the period (treated as one accounting period) from the first day
of the quarter in which the Issue Date occurs to the end of the most recent
fiscal quarter ending prior to the date of such Restricted Payment for which
financial statements are in existence (or, in case such Consolidated Net Income
is a deficit, minus 100% of such deficit); (ii) 100% of the aggregate Net Cash
Proceeds received by the Company from the issue or sale of its Capital Stock
(other than Disqualified Stock) or other capital contributions subsequent to the
Issue Date (other than Net Cash Proceeds received from an issuance or sale of
such Capital Stock to a Subsidiary of the Company or an employee stock ownership
plan, option plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or Guaranteed by the
Company or any Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination); (iii) the amount by which
Indebtedness of the Company or its Restricted Subsidiaries is reduced on the
Company's balance sheet upon the conversion or exchange (other than by a
Subsidiary of the Company) subsequent to the Issue Date of any Indebtedness of
the Company or its Restricted Subsidiaries convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company (less the amount of
any cash, or the fair market value of any other property, distributed by the
Company upon such conversion or exchange); and (iv) the amount equal to the net
reduction in Restricted Investments made by the Company or any of its Restricted
Subsidiaries in any Person resulting from: (A) repurchases or redemptions of
such Restricted Investments by such Person, proceeds realized upon the sale of
such Restricted Investment to an unaffiliated purchaser, repayments of loans or
advances or other transfers of assets (including by way of dividend or
distribution) by such Person to the Company or any Restricted Subsidiary; or (B)
the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investment") not to
exceed, in the case of any Unrestricted Subsidiary, the amount of Investments
previously made by the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount in each case under this clause (iv) was included in the
calculation of the amount of Restricted Payments; provided, however, that no
amount will be included under this clause (iv) to the extent it is already
included in Consolidated Net Income.
(b) The provisions of Section 3.5(a) shall not prohibit:
(1) any purchase, repurchase, redemption, defeasance or other acquisition or
retirement of Capital Stock, Disqualified Stock or Subordinated Obligations of
the Company or Guarantor Subordinated Obligations of any Subsidiary Guarantor
made by exchange for, or out of the proceeds of the substantially concurrent
sale of, Capital Stock of the Company or any of its Subsidiaries (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
or an employee stock ownership plan or similar trust to the extent such sale to
an employee stock ownership plan or similar trust is financed by loans from or
Guaranteed by the Company or any Restricted Subsidiary unless such loans have
been repaid with cash on or prior to the date of determination); provided,
however, that (a) such purchase, repurchase, redemption, defeasance, acquisition
or retirement will be excluded in subsequent calculations of the amount of
Restricted Payments and (b) the Net Cash Proceeds from such sale of Capital
Stock will be excluded from Section 3.5(a)(4)(c)(ii); (2) any purchase,
repurchase, redemption, defeasance or other acquisition or retirement of
Subordinated Obligations of the Company or Guarantor Subordinated Obligations of
any Subsidiary Guarantor made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations of the Company or any
purchase, repurchase, redemption, defeasance or other acquisition or retirement
of Guarantor
54
Subordinated Obligations made by exchange for or out of the proceeds of the
substantially concurrent sale of Guarantor Subordinated Obligations that, in
each case, is permitted to be Incurred pursuant to Section 3.3 and that in each
case constitutes Refinancing Indebtedness; provided, however, that such
purchase, repurchase, redemption, defeasance, acquisition or retirement will be
excluded in subsequent calculations of the amount of Restricted Payments; (3)
any purchase, repurchase, redemption, defeasance or other acquisition or
retirement of Disqualified Stock of the Company or a Restricted Subsidiary made
by exchange for or out of the proceeds of the substantially concurrent sale of
Disqualified Stock of the Company or such Restricted Subsidiary, as the case may
be, that, in each case, is permitted to be Incurred pursuant to Section 3.3 and
that in each case constitutes Refinancing Indebtedness; provided, however, that
such purchase, repurchase, redemption, defeasance, acquisition or retirement
will be excluded in subsequent calculations of the amount of Restricted
Payments; (4) so long as no Default or Event of Default has occurred and is
continuing, any purchase or redemption of Subordinated Obligations or Guarantor
Subordinated Obligations of a Subsidiary Guarantor from Net Available Cash to
the extent permitted under Section 3.7; provided, however, that such purchase or
redemption will be excluded in subsequent calculations of the amount of
Restricted Payments; (5) dividends paid within 60 days after the date of
declaration if at such date of declaration such dividend would have complied
with this Section 3.5; provided, however, that such dividends will be included
in subsequent calculations of the amount of Restricted Payments; (6) so long as
no Default or Event of Default has occurred and is continuing, payments to New
Holdings for the purpose of, and in the amounts equal to, amounts required to
permit New Holdings: (a) to redeem or repurchase Capital Stock of the Company or
New Holdings held by any existing or former employees or management of the
Company, Nebraska Book, New Holdings or any Subsidiary of the Company or their
assigns, estates or heirs, in each case in connection with the repurchase
provisions under employee stock option or stock purchase agreements or other
agreements to compensate management employees; provided that such redemptions or
repurchases pursuant to this Section 3.5(b)(6)(a), together with any redemptions
or repurchases pursuant to Section 3.5(b)(13)(a) will not exceed $4.0 million in
the aggregate for all such redemptions and repurchases; provided, however, that
the amount of any such repurchase or redemption will be included in subsequent
calculations of the amount of Restricted Payments; and (b) to make loans or
advances to employees or directors of New Holdings or any Subsidiary of New
Holdings the proceeds of which are used to purchase Capital Stock of the Company
or New Holdings, in an aggregate amount not in excess, when added to any loans
or advances made pursuant to Section 3.5(b)(13)(b) below, of $1.5 million at any
one time outstanding; provided, however, that the amount of such loans and
advances will be included in subsequent calculations of the amount of Restricted
Payments; (7) so long as no Default or Event of Default has occurred and is
continuing, the declaration and payment of dividends to holders of any class or
series of Disqualified Stock of the Company issued in accordance with the terms
of this Indenture to the extent such dividends are included in the definition of
"Consolidated Interest Expense"; provided that the payment of such dividends
will be excluded from the calculation of Restricted Payments; (8) repurchases of
Capital Stock deemed to occur upon the exercise of stock options, warrants or
other convertible securities if such Capital Stock represents a portion of the
exercise price thereof; provided, however, that such repurchases will be
excluded from subsequent calculations of the amount of Restricted Payments; (9)
cash dividends or loans to New Holdings in amounts equal to: (a) the amounts
required for New Holdings to pay any Federal, state or local income taxes to the
extent that such income taxes are directly attributable
55
to the income of the Company and its Restricted Subsidiaries; (b) the amounts
required for New Holdings to pay franchise taxes and other fees required to
maintain its legal existence; (c) an amount not to exceed $500,000 in any fiscal
year to permit New Holdings to pay its corporate overhead expenses Incurred in
the ordinary course of business, and to pay salaries or other compensation of
employees who perform services for Nebraska Book and one or more of the Company
or New Holdings; (d) so long as no Default or Event of Default shall have
occurred and be continuing, an amount not to exceed $100,000 in the aggregate,
when added to similar payments made by the Company pursuant to clause (14)
below, to enable New Holdings to make payments to holders of its Capital Stock
in lieu of issuance of fractional shares of its Capital Stock; and (e) the
amounts payable by New Holdings in connection with the Transaction; provided,
that such dividends or loans will be excluded from subsequent calculations of
the amount of Restricted Payments; (10) the purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value of any Subordinated
Obligation (i) at a purchase price not greater than 101% of the principal amount
of such Subordinated Obligation in the event of a Change of Control in
accordance with provisions similar to Section 3.9 or (ii) at a purchase price
not greater than 100% of the principal amount thereof in accordance with
provisions similar to Section 3.7; provided that, prior to or simultaneously
with such purchase, repurchase, redemption, defeasance or other acquisition or
retirement, the Company has made the Change of Control Offer or Asset
Disposition Offer, as applicable, as provided in Section 3.7 or Section 3.9 with
respect to the Securities and has completed the repurchase or redemption of all
Securities validly tendered for payment in connection with such Change of
Control Offer or Asset Disposition Offer; (11) the purchase, repurchase,
acquisition or redemption of the 10-3/4% Notes and the 8-3/4% Notes (including
any prepayment penalties, premiums, fees (including consent fees) and expenses);
(12) other Restricted Payments in an amount not to exceed $10.0 million;
provided that the amount of such Restricted Payments will be included in the
calculation of the amount of Restricted Payments; (13) so long as no Default or
Event of Default has occurred and is continuing, payments for the purpose of,
and in the amounts equal to, amounts required: (a) to redeem or repurchase
Capital Stock of the Company or New Holdings held by any existing or former
employees or management of Nebraska Book, the Company or New Holdings or any
Subsidiary of the Company or their assigns, estates or heirs, in each case in
connection with the repurchase provisions under employee stock option or stock
purchase agreements or other agreements to compensate management employees;
provided that such redemptions or repurchases pursuant to this clause, together
with any redemptions or repurchases pursuant to clause 6(a) above, will not
exceed $4.0 million in the aggregate for all such redemptions and repurchases;
provided, however, that the amount of any such repurchase or redemption will be
included in subsequent calculations of the amount of Restricted Payments; and
(b) to make loans or advances to employees or directors of the Company or any
Subsidiary of the Company the proceeds of which are used to purchase Capital
Stock of the Company or New Holdings, in an aggregate amount not in excess, when
added to any loans or advances made pursuant to clause 6(b) above, of $1.5
million at any one time outstanding; provided, however, that the amount of such
loans and advances will be included in subsequent calculations of the amount of
Restricted Payments; (14) the amounts payable by the Company in connection with
the Transaction; and (15) so long as no Default or Event of Default shall have
occurred and be continuing, an amount not to exceed $100,000 in the aggregate,
when added to any similar payments made by New Holdings pursuant to clause 9(d)
above, to enable the Company to make payments to holders of its Capital Stock in
lieu of issuance of fractional shares of its Capital Stock.
56
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of such Restricted Payment of the asset(s)
or securities proposed to be paid, transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any cash Restricted Payment shall be its face amount
and any non-cash Restricted Payment shall be determined conclusively by the
Board of Directors of the Company acting in good faith whose resolution with
respect thereto shall be delivered to the Trustee, such determination to be
based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if such fair market value is
estimated in good faith by the Board of Directors of the Company to exceed $5.0
million. Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this Section 3.5 were computed, together with a copy of
any fairness opinion or appraisal required by this Indenture.
SECTION 3.6. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. (a) The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to: (1) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any Restricted Subsidiary (it being understood that the priority of
any Preferred Stock in receiving dividends or liquidating distributions prior to
dividends or liquidating distributions being paid on Common Stock shall not be
deemed a restriction on the ability to make distributions on Capital Stock); (2)
make any loans or advances to the Company or any Restricted Subsidiary (it being
understood that the subordination of loans or advances made to the Company or
any Restricted Subsidiary to other Indebtedness Incurred by the Company or any
Restricted Subsidiary shall not be deemed a restriction on the ability to make
loans or advances); or (3) transfer any of its property or assets to the Company
or any Restricted Subsidiary.
(b) The provisions of Section 3.6(a) will not prohibit:
(i) any encumbrance or restriction pursuant to an agreement in effect at or
entered into on the date of this Indenture, including, without limitation, this
Indenture, the indenture for the 10 3/4% Notes, the Credit Agreement, the Senior
Subordinated Indenture and the indenture for the 8 3/4% Notes; (ii) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Capital Stock or Indebtedness Incurred by a
Restricted Subsidiary on or before the date on which such Restricted Subsidiary
was acquired by the Company (other than Capital Stock or Indebtedness Incurred
as consideration in, or to provide all or any portion of the funds utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company or in contemplation of the transaction) and outstanding on such date
provided, that any such encumbrance or restriction shall not extend to any
assets or property of the Company or any other Restricted Subsidiary other than
the assets and property so acquired; (iii) any encumbrance or restriction with
respect to a Restricted Subsidiary pursuant to an agreement effecting a
refunding, replacement or refinancing of Indebtedness Incurred pursuant to an
agreement referred to in Section 3.6(b)(i) or (b)(ii) or this Section
3.6(b)(iii) or contained in any amendment to an agreement referred to in Section
3.6(b)(i) or (b)(ii) or this Section 3.6(b)(iii); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
57
contained in any such agreement are no less favorable in any material respect to
the Holders of the Securities than the encumbrances and restrictions contained
in such agreements referred to in Section 3.6(b)(i) or (b)(ii) on the Issue Date
or the date such Restricted Subsidiary became a Restricted Subsidiary, whichever
is applicable; (iv) in the case of Section 3.6(b)(iii), any encumbrance or
restriction (a) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is subject to a lease, license or
similar contract, or the assignment or transfer of any such lease, license or
other contract; (b) contained in mortgages, pledges or other security agreements
permitted under the Indenture securing Indebtedness of the Company or a
Restricted Subsidiary to the extent such encumbrances or restrictions restrict
the transfer of the property subject to such mortgages, pledges or other
security agreements; or (c) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal easement
agreements of the Company or any Restricted Subsidiary; (v) (a) purchase money
obligations for property acquired in the ordinary course of business and (b)
Capitalized Lease Obligations permitted under this Indenture, in each case, that
impose encumbrances or restrictions of the nature described in Section 3.6(a)(3)
on the property so acquired; (vi) any restriction with respect to a Restricted
Subsidiary (or any of its property or assets) imposed pursuant to an agreement
entered into for the direct or indirect sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary (or
the property or assets that are subject to such restriction) pending the closing
of such sale or disposition; (vii) net worth provisions in leases and other
agreements entered into by the Company or any Restricted Subsidiary in the
ordinary course of business; and (viii) encumbrances or restrictions arising or
existing by reason of applicable law or any applicable rule, regulation or
order.
SECTION 3.7. Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any Asset Disposition unless: (1) in the case of any Asset
Disposition involving shares or assets having a value equal to or in excess of
$1.0 million, the Company or such Restricted Subsidiary, as the case may be,
receives consideration at least equal to the fair market value (such fair market
value to be determined on the date of contractually agreeing to such Asset
Disposition), as determined in good faith by the Board of Directors (including
the value of all non-cash consideration), of the shares and assets subject to
such Asset Disposition; (2) in the case of any Asset Disposition involving
shares or assets having a value equal to or in excess of $1.0 million, at least
75% of the consideration from such Asset Disposition received by the Company or
such Restricted Subsidiary, as the case may be, is in the form of cash or Cash
Equivalents; and (3) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company or such Restricted Subsidiary, as
the case may be: (a) first, to the extent the Company or any Restricted
Subsidiary, as the case may be, elects (or is required by the terms of any
Indebtedness or Guarantor Indebtedness), to prepay, repay or purchase
Indebtedness of the Company or Indebtedness of a Restricted Subsidiary (in each
case other than Indebtedness owed to the Company or an Affiliate of the Company)
within 360 days from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; provided, however, that, in connection with
any prepayment, repayment or purchase of Indebtedness pursuant to this Section
3.7(a)(3)(a), the Company or such Restricted Subsidiary will retire such
Indebtedness and will cause the related commitment (if any) to be permanently
reduced in an amount equal to the principal amount so prepaid, repaid or
purchased; (b) second, to the extent of the balance of such Net Available Cash
after application in accordance with Section 3.7(a)(3)(a), to the extent the
Company or such Restricted Subsidiary elects, to invest in Additional Assets
within 360 days
58
from the later of the date of such Asset Disposition or the receipt of such Net
Available Cash and (c) third, to the extent of the balance of such Net Available
Cash after application in accordance with Sections 3.7(a)(3)(a) and (b), to make
an offer to purchase the Senior Subordinated Notes at par plus accrued and
unpaid interest, if any, thereon pursuant to the terms of the Senior
Subordinated Note Indenture; provided that pending the final application of any
such Net Available Cash in accordance with Section 3.7(a)(3)(a) or Section
3.7(a)(3)(b) or Section 3.7(a)(3)(c) above, the Company and its Restricted
Subsidiaries may temporarily reduce Indebtedness or otherwise invest such Net
Available Cash in any manner not prohibited by this Indenture.
(b) Any Net Available Cash from Asset Dispositions that
are not applied or invested as provided in Section 3.7(a)(3) will be deemed to
constitute "Excess Proceeds." On the 361st day after an Asset Disposition, if
the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company will
be required to make an offer ("Asset Disposition Offer") to all Holders of
Securities and to the extent required by the terms of other Pari Passu
Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with
similar provisions requiring the Company to make an offer to purchase such Pari
Passu Indebtedness with the proceeds from any Asset Disposition ("Pari Passu
Notes"), to purchase the maximum principal amount at maturity of Securities and
any such Pari Passu Notes to which the Asset Disposition Offer applies that may
be purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to, prior to March 15, 2008, 100% of the Accreted Value thereof of the
Securities and Pari Passu Notes plus accrued and unpaid interest to the date of
purchase, and at an offer price in cash in an amount equal to, on and after
March 15, 2008, 100% of the principal amount at maturity of the Securities and
Pari Passu Notes plus accrued and unpaid interest to the date of purchase, in
each case, in accordance with the procedures set forth in this Indenture or the
agreements governing the Pari Passu Notes, as applicable, in each case in
integral multiples of $1,000 of principal amount at maturity. To the extent that
the aggregate amount of Securities and Pari Passu Notes so validly tendered and
not properly withdrawn pursuant to an Asset Disposition Offer is less than the
Excess Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes, subject to other covenants contained in this Indenture. If
the aggregate principal amount at maturity of Securities surrendered by holders
thereof and other Pari Passu Notes surrendered by holders or lenders,
collectively, exceeds the amount of Excess Proceeds, the Trustee shall select
the Securities and Pari Passu Notes to be purchased on a pro rata basis on the
basis of the aggregate principal amount at maturity of tendered Securities and
Pari Passu Notes. Upon completion of such Asset Disposition Offer, the amount of
Excess Proceeds shall be reset at zero.
(c) (1) The Asset Disposition Offer will remain open for
a period of 20 Business Days following its commencement, except to the extent
that a longer period is required by applicable law (the "Asset Disposition Offer
Period"). No later than five Business Days after the termination of the Asset
Disposition Offer Period (the "Asset Disposition Purchase Date"), the Company
will purchase the principal amount of Securities and Pari Passu Notes required
to be purchased pursuant to this Section 3.7 (the "Asset Disposition Offer
Amount") or, if less than the Asset Disposition Offer Amount has been so validly
tendered, all Securities and Pari Passu Notes validly tendered in response to
the Asset Disposition Offer.
59
If the Asset Disposition Purchase Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest will be paid to the Person in whose name a Security
is registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Securities pursuant to the Asset
Disposition Offer.
On or before the Asset Disposition Purchase Date, the Company
will, to the extent lawful, accept for payment, on a pro rata basis to the
extent necessary, the Asset Disposition Offer Amount of Securities and Pari
Passu Notes or portions of Securities and Pari Passu Notes so validly tendered
and not properly withdrawn pursuant to the Asset Disposition Offer, or if less
than the Asset Disposition Offer Amount has been validly tendered and not
properly withdrawn, all Securities and Pari Passu Notes so validly tendered and
not properly withdrawn, in each case in integral multiples of $1,000 of
principal amount at maturity. The Company will deliver to the Trustee an
Officers' Certificate stating that such Securities or portions thereof were
accepted for payment by the Company in accordance with the terms of this Section
3.7 and, in addition, the Company will deliver all certificates and notes
required, if any, by the agreements governing the Pari Passu Notes. The Company
or the Paying Agent, as the case may be, will promptly (but in any case not
later than five Business Days after termination of the Asset Disposition Offer
Period) mail or deliver to each tendering Holder of Securities or holder or
lender of Pari Passu Notes, as the case may be, an amount equal to the purchase
price of the Securities or Pari Passu Notes so validly tendered and not properly
withdrawn by such Holder or lender, as the case may be, and accepted by the
Company for purchase, and the Company will promptly issue a new Security, and
the Trustee, upon delivery of an Officers' Certificate from the Company, will
authenticate and mail or deliver such new Security to such Holder, in a
principal amount equal to any unpurchased portion of the Security surrendered;
provided that each such new Security will be in a principal amount of $1,000 of
principal amount at maturity or an integral multiple of $1,000 of principal
amount at maturity. In addition, the Company will take any and all other actions
required by the agreements governing the Pari Passu Notes. Any Security not so
accepted will be promptly mailed or delivered by the Company to the Holder
thereof. The Company will publicly announce the results of the Asset Disposition
Offer on the Asset Disposition Purchase Date.
For the purposes of this Section 3.7, the following will be
deemed to be cash:
(1) the assumption by the transferee of Indebtedness of
the Company or Indebtedness of a Restricted Subsidiary and the release
of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition (in which case
the Company will, without further action, be deemed to have applied
such deemed cash to Indebtedness in accordance with Section
3.7(a)(3)(a)); and
(2) securities, notes or other obligations received by
the Company or any Restricted Subsidiary from the transferee that are
promptly converted by the Company or such Restricted Subsidiary into
cash.
(d) The Company will comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection
60
with the repurchase of Securities pursuant to this Indenture. To the extent that
the provisions of any securities laws or regulations conflict with provisions of
this Section 3.7, the Company will comply with the applicable securities laws
and regulations and will not be deemed to have breached its obligations under
this Indenture by virtue thereof.
SECTION 3.8. Limitation on Affiliate Transactions. (a) The
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, enter into or conduct any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company (an "Affiliate Transaction") unless:
(1) the terms of such Affiliate Transaction are no less favorable to the Company
or such Restricted Subsidiary, as the case may be, than those that could be
obtained in a comparable transaction at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate; (2) in the
event such Affiliate Transaction involves an aggregate consideration in excess
of $1.0 million, the terms of such transaction have been approved by a majority
of the members of the Board of Directors of the Company and by a majority of the
members of such Board having no personal stake in such transaction, if any (and
such majority or majorities, as the case may be, determines that such Affiliate
Transaction satisfies the criteria in Section 3.8(a)(1)); and (3) in the event
such Affiliate Transaction involves an aggregate consideration in excess of $5.0
million, the Company has received a written opinion from an independent
investment banking, accounting or appraisal firm of nationally recognized
standing that such Affiliate Transaction is not materially less favorable than
those that might reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate.
(b) Section 3.8(a) shall not apply to: (1) any Restricted
Payment (other than a Restricted Investment) permitted to be made pursuant to
Section 3.5; (2) any issuance of securities, or other payments, awards or grants
in cash, securities or otherwise pursuant to, or the funding of, employment
agreements and other compensation arrangements, options to purchase Capital
Stock of the Company, restricted stock plans, long-term incentive plans, stock
appreciation rights plans, participation plans or similar employee benefits
plans and/or indemnity provided on behalf of officers and employees approved by
the Board of Directors; (3) loans or advances to employees, officers or
directors in the ordinary course of business of the Company or any of its
Restricted Subsidiaries but in any event not to exceed $1.5 million in the
aggregate outstanding at any one time with respect to all loans or advances made
since the Issue Date; (4) any transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries and Guarantees issued by the
Company or a Restricted Subsidiary for the benefit of the Company or a
Restricted Subsidiary, as the case may be, in accordance with Section 3.3; (5)
the payment of reasonable and customary fees paid to, and indemnity provided on
behalf of, directors of the Company or any Restricted Subsidiary; (6) the fees
payable by the Company in connection with the Transaction; (7) the performance
of obligations of the Company or any of its Restricted Subsidiaries under the
terms of any agreement to which the Company or any of its Restricted
Subsidiaries is a party as of or on the Issue Date and identified on a schedule
to this Indenture on the Issue Date, as these agreements may be amended,
modified, supplemented, extended or renewed from time to time; provided,
however, that any future amendment, modification, supplement, extension or
renewal entered into after the Issue Date will be permitted to the extent that
its terms are not more disadvantageous to the holders of the Securities than the
terms of the agreements in effect on the Issue Date; (8) the issuance of Capital
61
Stock (other than Disqualified Stock) of the Company to any Affiliate; (9)
entrance into and performance of any employment agreement entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of business
or approved by the Board of Directors in good faith; and (10) the merger or
consolidation of New Holdings with the Company.
SECTION 3.9. Change of Control. Upon the occurrence of a
Change of Control, unless the Company has exercised its right to redeem all of
the Securities in accordance with Article V, each Holder will have the right to
require the Company to repurchase all or any part (equal to $1,000 of the
principal amount at maturity of an integral multiple thereof) of such Holder's
Securities at a purchase price in cash equal to 101% of the Accreted Value
thereof plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date):
Within 30 days following any Change of Control unless the
Company has exercised its right to redeem Securities under Section 5.1, the
Company will mail a notice (the "Change of Control Offer") to each Holder, with
a copy to the Trustee, stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such holder's
Securities at a purchase price in cash equal to 101% of the Accreted
Value of such Securities plus accrued and unpaid interest, if any, to
the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest
payment date) (the "Change of Control Payment");
(2) the repurchase date (which shall be no earlier than
30 days nor later than 60 days from the date such notice is mailed)
(the "Change of Control Payment Date"); and
(3) the procedures determined by the Company, consistent
with this Indenture, that a holder must follow in order to have its
Securities repurchased.
On the Change of Control Payment Date, the Company will, to
the extent lawful: (1) accept for payment all Securities or portions of
Securities (in integral multiples of $1,000 of principal amount at maturity)
properly tendered pursuant to the Change of Control Offer; (2) deposit with the
paying agent an amount equal to the Change of Control Payment in respect of all
Securities or portions of Securities so tendered; and (3) deliver or cause to be
delivered to the Trustee the Securities so accepted together with an Officers'
Certificate stating the aggregate principal amount at maturity of Securities or
portions of Securities being purchased by the Company.
The paying agent will promptly mail to each holder of
Securities so tendered the Change of Control Payment for such Securities, and
the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each holder a new Security equal in principal amount at maturity
to any unpurchased portion of the Securities surrendered, if any; provided that
each such new Security will be in a principal amount at maturity of $1,000 or an
integral multiple thereof.
62
If the Change of Control Payment Date is on or after an
interest record date and on or before the related interest payment date, any
accrued and unpaid interest, if any, will be paid to the Person in whose name a
Security is registered at the close of business on such record date, and no
additional interest will be payable to holders who tender pursuant to the Change
of Control Offer.
Prior to mailing a Change of Control Offer, and as a condition
to such Change of Control Offer, (i) all outstanding Indebtedness issued under
an indenture or other agreement that may be violated by a payment to the holders
of the Securities must be repaid in full, or the Company must offer to repay all
such Indebtedness and make payment to the holders that accept such offer and
obtain waivers of any event of default from the remaining holders of such
Indebtedness or (ii) the requisite holders of each issue of Indebtedness issued
under an indenture or other agreement that may be violated by a payment to the
holders of the Securities shall have consented to such Change of Control Offer
being made. The Company will effect such repayment or obtain such consent within
60 days following any Change of Control, it being a default of this Section 3.9
if the Company fails to so comply.
The Company will not be required to make a Change of Control
Offer upon a Change of Control if a third party makes the Change of Control
Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 3.9 applicable to a Change of Control
Offer made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 3.9. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Indenture, the Company will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations described in this Indenture by virtue of the
conflict.
SECTION 3.10. Limitation on Sale of Capital Stock of
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, transfer, convey, sell, lease or otherwise dispose of
any Voting Stock of any Restricted Subsidiary or, with respect to a Restricted
Subsidiary, to issue any of its Voting Stock (other than, if necessary, shares
of its Voting Stock constituting directors' qualifying shares) to any Person
except: (1) to the Company or a Wholly-Owned Subsidiary; or (2) in compliance
with Section 3.7 and immediately after giving effect to such issuance or sale,
such Restricted Subsidiary would continue to be a Restricted Subsidiary.
Notwithstanding the preceding paragraph, the Company or any
Restricted Subsidiary may sell all the Voting Stock of a Restricted Subsidiary
as long as the Company or any Restricted Subsidiary complies with the terms of
Section 3.7.
SECTION 3.11. Limitation on Liens. The Company will not, and
will not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, Incur or suffer to exist any Lien (other than Permitted Liens) upon any
of its property or assets (including Capital Stock of Restricted Subsidiaries),
whether owned on the date of this Indenture or acquired after that
63
date, securing any Indebtedness of the Company or, in the case of a Restricted
Subsidiary, any Guarantee of Indebtedness of the Company, unless
contemporaneously therewith effective provision is made to secure (a) the
Indebtedness due under this Indenture and the Securities or (b) in respect of
Liens on any Restricted Subsidiary's property or assets securing any Guarantee
of Indebtedness of the Company, the Guarantee by such Restricted Subsidiary of
the Securities required by Section 3.12, equally and ratably with (or prior to
in the case of Liens with respect to Subordinated Obligations) the Indebtedness
secured by such Lien for so long as such Indebtedness is so secured.
SECTION 3.12. Future Subsidiary Guarantors. The Company will
cause each Restricted Subsidiary that guarantees any Indebtedness of the Company
to execute and deliver to the Trustee a supplemental indenture pursuant to which
such Subsidiary Guarantee will guarantee payment of the Securities. Each
Subsidiary Guarantee will be limited to an amount not to exceed the maximum
amount that can be guaranteed by that Restricted Subsidiary without rendering
the Subsidiary Guarantee, as it relates to such Restricted Subsidiary, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 3.13. Limitation on Lines of Business. The Company
will not, and will not permit any Restricted Subsidiary to, engage in any
business other than a Related Business.
SECTION 3.14. Maintenance of Office or Agency. The Company
will maintain in The City of New York, an office or agency where the Securities
may be presented or surrendered for payment, where, if applicable, the
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 corporate trust office of the Trustee 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.
SECTION 3.15. Corporate Existence. Subject to Article IV, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and that of each Restricted
Subsidiary and the corporate rights (charter and statutory) licenses and
franchises of the Company and each Restricted Subsidiary; provided,
64
however, that the Company shall not be required to preserve any such existence
(except the Company), right, license or franchise if the Board of Directors of
the Company shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and each of its Restricted
Subsidiaries, taken as a whole, and that the loss thereof is not, and will not
be, disadvantageous in any material respect to the Holders; and provided,
further, the Company may merge in accordance with Section 4.1.
SECTION 3.16. [Reserved].
SECTION 3.17. Compliance Certificate. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officers' Certificate stating that in the course of the performance
by the signers of their duties as Officers of the Company they would normally
have knowledge of any Default or Event of Default and whether or not the signers
know of any Default or Event of Default that occurred during such previous
fiscal year. If they do, the certificate shall describe the Default or Event of
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
SECTION 3.18. Further Instruments and Acts. Upon request of
the Trustee, the Company will execute and deliver such further instruments and
do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.19. Payments for Consent. Neither the Company nor
any of its Restricted Subsidiaries will, directly or indirectly, pay or cause to
be paid any consideration, whether by way of interest, fees or otherwise, to any
Holder of any Securities for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Securities
unless such consideration is offered to be paid or is paid to all Holders of the
Securities that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or amendment.
SECTION 3.20. Statement by Officers as to Default. The Company
shall deliver to the Trustee, as soon as possible and in any event within 30
days after the Company becomes aware of the occurrence of any Event of Default
or an event which, with notice or the lapse of time or both, would constitute an
Event of Default, an Officers' Certificate setting forth the details of such
Event of Default or Default, its status and the actions which the Company is
taking or proposes to take with respect thereto.
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") will be a corporation or limited liability company
organized or formed, as the case may be, and existing under the laws of
the United States of America, any State of the United
65
States or the District of Columbia and the Successor Company (if not
the Company) will expressly assume, by supplemental indenture, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all
the obligations of the Company under the Securities and this Indenture;
(2) immediately after giving effect to such transaction
(and treating any Indebtedness that becomes an obligation of the
Successor Company or any Subsidiary of the Successor Company as a
result of such transaction as having been Incurred by the Successor
Company or such Subsidiary at the time of such transaction), no Default
or Event of Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction,
the Successor Company would be able to Incur at least an additional
$1.00 of Indebtedness pursuant to Section 3.3;
(4) unless the Company is the Successor Company, each
Subsidiary Guarantor (unless it is the other party to the transactions
above, in which case clause (1) shall apply) shall have by supplemental
indenture confirmed that its Subsidiary Guarantee (if any) shall apply
to such Person's obligations in respect of this Indenture and the
Securities and its obligations under the Registration Rights Agreement
shall continue to be in effect; and
(5) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture.
For purposes of this Section 4.1, the sale, lease, conveyance,
assignment, transfer or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The predecessor Company (if not the Successor Company) will be
released from its obligations under this Indenture and the Successor Company
will succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture, but, in the case of a lease of all or
substantially all its assets, the predecessor Company will not be released from
the obligation to pay the principal of and interest on the Securities.
Notwithstanding the preceding clause (3), (x) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company, (y) provided, that the Company incurs no
additional Indebtedness as a result of such merger, the Company may consolidate
with or merge with New Holdings, and (z) the Company may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
jurisdiction to realize tax benefits; provided that, in the case of a merger of
a Restricted Subsidiary or New Holdings into the Company, the Company will not
be required to comply with the preceding clause (5).
66
ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption. The Securities may or shall,
as the case may be, be redeemed, as a whole or from time to time in part,
subject to the conditions and at the Redemption Prices specified in the form of
Securities set forth in Exhibits A and B hereto, which are hereby incorporated
by reference and made a part of this Indenture, together with accrued and unpaid
interest to the Redemption Date.
SECTION 5.2. 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 5.3. Election to Redeem; Notice to Trustee. The
election of the Company to redeem any Securities pursuant to Section 5.1 shall
be evidenced by a Board Resolution. In case of any redemption at the election of
the Company, the Company shall, upon not less than 30 and not more than 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
of the principal amount at maturity of Securities to be redeemed 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 5.4.
SECTION 5.4. Selection by Trustee of Securities to Be
Redeemed. If less than all the Securities are to be redeemed at any time
pursuant to an optional redemption, the particular Securities to be redeemed
shall be selected not more than 90 days prior to the Redemption Date by the
Trustee, from the outstanding Securities not previously called for redemption,
in compliance with the requirements of the principal securities exchange, if
any, on which such Securities are listed, or, if such Securities are not so
listed, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem fair and appropriate (and in such manner as
complies with applicable legal requirements) and which may provide for the
selection for redemption of portions of the principal amount at maturity of the
Securities; provided, however, that no such partial redemption shall reduce the
portion of the principal amount at maturity of a Security not redeemed to less
than $1,000.
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 at maturity thereof to be
redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to redemption of Securities shall
relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount at maturity of such Security which has been
or is to be redeemed.
SECTION 5.5. Notice of Redemption. Notice of redemption shall
be given in the manner provided for in Section 10.2 not less than 30 nor more
than 60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed. The Trustee shall give notice of
67
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall deliver to the Trustee, at least 45 days prior
to the Redemption Date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the following items.
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 5.7, if
any,
(3) if less than all outstanding Securities are to be
redeemed, the identification of the particular Securities (or portion
thereof) to be redeemed, as well as the aggregate principal amount at
maturity of Securities to be redeemed and the aggregate principal
amount at maturity of Securities to be Outstanding after such partial
redemption,
(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 at maturity 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 5.7) will become due and payable upon each such Security, or
the portion thereof, to be redeemed, and, unless the Company defaults
in making the redemption payment, that interest on Securities called
for redemption (or the portion thereof) will cease to accrue on and
after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest,
if any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made
as to the accuracy or correctness of the CUSIP number, if any, listed
in such notice or printed on the Securities, and
(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6. Deposit of Redemption Price. Prior to 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 2.4) an amount of
68
money sufficient to pay the Redemption Price of, and accrued interest on, all
the Securities which are to be redeemed on that date.
SECTION 5.7. 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
(subject to the rights of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
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 5.8. Securities Redeemed in Part. Any Security which
is to be redeemed only in part (pursuant to the provisions of this Article)
shall be surrendered at the office or agency of the Company maintained for such
purpose pursuant to Section 3.14 (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 at the expense of the Company, a new Security or Securities, of any
authorized denomination as requested by such Holder, in an aggregate principal
amount at maturity equal to and in exchange for the unredeemed portion of the
principal of the Security so surrendered, provided, that each such new Security
will be in a principal amount at maturity of $1,000 or integral multiple
thereof.
ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest or
additional interest (as required by the Registration Rights Agreement)
on any Security when due, continued for 30 days;
(2) the Company defaults in the payment of principal of
or premium, if any, on any Security when due at its Stated Maturity,
upon optional redemption, upon required repurchase, upon declaration or
otherwise;
(3) the Company or any Subsidiary Guarantor fails to
comply with Article IV of this Indenture;
(4) the Company fails to comply with Section 3.2, 3.3,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, 3.17, 3.18
and 3.19 (in each case other than a failure to
69
repurchase Securities when required pursuant to Sections 3.7 or 3.9 of
this Indenture, which failure shall constitute an Event of Default
under Section 6.1(2) and other than a failure to comply with Article IV
which failure shall constitute an Event of Default under Section
6.1(3)) and such failure continues for 30 days after the notice
specified below;
(5) the Company defaults in the performance of or a
breach by the Company of any other covenant or agreement in this
Indenture or under the Securities (other than those referred to in (1),
(2), (3) or (4) above) and such default continues for 60 days after the
notice specified below;
(6) there is a default under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), other
than Indebtedness owed to the Company or a Restricted Subsidiary,
whether such Indebtedness or guarantee now exists, or is created after
the date of this Indenture, which default (a) is caused by a failure to
pay principal of, or interest or premium, if any, on such Indebtedness
prior to the expiration of the grace period provided in such
Indebtedness ("Payment Default") or (b) results in the acceleration of
such Indebtedness prior to its maturity (the "cross acceleration
provision") and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $15.0 million or
more or its foreign currency equivalent at the time;
(7) the Company or a Significant Subsidiary or a group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries), would constitute a Significant Subsidiary, pursuant to
or within the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian
(as defined below) of it or for any substantial part of its
property; or
(D) makes a general assignment for the benefit
of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together (as of the latest audited
70
consolidated financial statements for the Company and its
Restricted Subsidiaries) would constitute a Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together (as of the latest audited consolidated
financial statements for the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary or for
any substantial part of its property; or
(C) orders the winding up or liquidation of the
Company or any Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together (as of the latest
audited consolidated financial statements for the Company and
its Restricted Subsidiaries) would constitute a Significant
Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(9) the Company or any Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Restricted
Subsidiaries) would constitute a Significant Subsidiary fails to pay
final, non-appealable judgments aggregating in excess of $15.0 million
or its foreign currency equivalent at the time (net of any amounts that
a reputable and creditworthy insurance company has acknowledged
liability for in writing), which judgments are not paid, discharged or
stayed for a period of 60 days; or
(10) any Subsidiary Guarantee ceases to be in full force
and effect (except as contemplated by the terms hereof) or is declared
null and void in a judicial proceeding or any Subsidiary Guarantor
denies or disaffirms its obligations under this Indenture or its
Subsidiary Guarantee.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is 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.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or
(5) of this Section 6.1 will not constitute an Event of Default until the
Trustee or the Holders of at least 25% in principal amount at maturity of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified in said clause (4) or (5) after
receipt of such notice. Such notice must specify the Default, demand that it be
remedied and state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Default or Event of Default
71
under clauses (3), (4), (5), (6), (7), (8), (9) or (10) of this Section 6.1,
which such notice shall contain the status thereof and a description of the
action being taken or proposed to be taken by the Company in respect thereof.
SECTION 6.2. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.1(7) or (8)) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount at maturity of the outstanding Securities by notice to the
Company and the Trustee, may, and the Trustee at the request of such Holders
shall, declare the Accreted Value of, premium, if any, and accrued and unpaid
interest, if any, on all the Securities to be due and payable. Upon such a
declaration, such Accreted Value, premium and accrued and unpaid interest shall
be immediately due and payable. In the event of a declaration of acceleration of
the Securities because an Event of Default set forth in Section 6.1(6) above has
occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default or payment default
triggering such Event of Default pursuant to Section 6.1(6) shall be remedied or
cured by the Company or a Restricted Subsidiary or waived by the Holders of the
relevant Indebtedness within 20 days after the declaration of acceleration with
respect thereto and if (1) the annulment of the acceleration of the Securities
would not conflict with any judgment or decree of a court of competent
jurisdiction and (2) all existing Events of Default, other than the nonpayment
of principal, premium or interest on the Securities that has become due solely
because of such acceleration, have been cured or waived. If an Event of Default
specified in Section 6.1(7) or (8) with respect to the Company occurs and is
continuing, the Accreted Value of, premium, if any, and accrued and unpaid
interest on all the Securities will become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
No such rescission shall affect any subsequent Default or Event of Default or
impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a
majority in principal amount at maturity of the outstanding Securities by notice
to the Trustee may (a) waive an existing Default or Event of Default and its
consequences except a Default or Event of Default in the payment of the
principal of, or premium, if any, or interest on a Security and (b) rescind any
such acceleration with respect to the Securities and its consequences if (1)
rescission would not conflict with any judgment or decree of a court of
competent jurisdiction and (2) all existing Events of Default, other than the
nonpayment of the principal of, premium, if any, and interest on the Securities
that have become due solely by such declaration of acceleration, have
72
been cured or waived. When a Default or Event of Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount at maturity of the outstanding Securities may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or, subject to Sections 7.1 and 7.2, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. Subject to the provisions of
this Indenture relating to the duties of the Trustee, if an Event of Default
occurs and is continuing, the Trustee will be under no obligation to exercise
any of the rights or powers under this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
indemnity or security against any loss, liability or expense. Except to enforce
the right to receive payment of principal, premium, if any, or interest when
due, no Holder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) such Holder has previously given the Trustee notice
that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount at
maturity of the outstanding Securities have requested the Trustee to
pursue the remedy;
(3) such Holders have offered the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount at
maturity of the outstanding Securities have not given the Trustee a
direction that, in the opinion of the Trustee, is inconsistent with
such request within such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture (including, without
limitation, Section 6.6), the right of any Holder to receive payment of
principal of, premium (if any) or interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
73
SECTION 6.8. Collection Suit by Trustee. If an Event of
Default specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount then due and owing (together with interest on
any unpaid interest to the extent lawful) and the amounts provided for in
Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to
Section 6.7 or a suit by Holders of more than 10% in outstanding principal
amount at maturity of the Securities.
74
ARTICLE VII
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine such certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own wilful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur 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 to
75
believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(i) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
SECTION 7.2. Rights of Trustee. (a) Subject to Section 7.1,
the Trustee may rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on an Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents
and shall not be responsible for the misconduct or negligence of any agent
appointed with due care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Trustee's conduct does
not constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel of its
selection, and the advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued
76
in connection with the sale of the Securities or in the Securities other than
the Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of
Default occurs and is continuing and if a Trust Officer has actual knowledge
thereof, the Trustee shall mail to each Securityholder notice of the Default or
Event of Default within 90 days after it occurs. Except in the case of a Default
or Event of Default in payment of principal of, premium (if any), or interest on
any Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, a committee of its board of
directors or a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such May 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b). The Trustee shall also transmit by mail all reports required by TIA
Section 313(c).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay
to the Trustee from time to time reasonable compensation for its acceptance of
this Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable out-of-pocket
expenses incurred or made by it, including costs of collection, costs of
preparing and reviewing reports, certificates and other documents, costs of
preparation and mailing of notices to Securityholders and reasonable costs of
counsel retained by the Trustee in connection with the delivery of an Opinion of
Counsel or otherwise, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee's agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
expense (including reasonable attorneys' fees and expenses) incurred by it
without negligence or bad faith on its part in connection with the
administration of this trust and the performance of its duties hereunder,
including the costs and expenses of enforcing this Indenture (including this
Section 7.7) and of defending itself against any claims (whether asserted by any
Securityholder, the Company or otherwise). The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee may have separate
counsel and the Company shall pay the fees and expenses of such counsel provided
that the Company shall not be required to pay such fees and expenses if it
assumes the Trustee's defense, and, in the reasonable judgment of outside
counsel to the Trustee, there is no conflict of interest between the Company and
the Trustee in connection with such defense. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
77
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or Indebtedness of the Company.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.1(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in principal
amount at maturity of the Securities may remove the Trustee by so notifying the
Trustee and may appoint a successor Trustee. The Company shall remove the
Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting as
trustee hereunder.
If the Trustee resigns or is removed by the Company or by the
Holders of a majority in principal amount at maturity of the Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of the Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount at maturity of the Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
78
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $100 million as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance.
(a) Subject to Section 8.1(c), when (i)(x) the Company delivers to the Trustee
all outstanding Securities (other than Securities replaced pursuant to Section
2.9) for cancellation or (y) all outstanding Securities not theretofore
delivered for cancellation have become due and payable, whether at maturity or
upon redemption or will become due and payable within one year or 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 or any Subsidiary Guarantor
irrevocably deposits or causes to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders money in U.S. dollars,
non-callable U.S. Government Obligations, or a combination thereof, in such
amounts as will be sufficient without consideration of any reinvestment of
interest to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation for
79
principal, premium, if any, and accrued interest to the date of maturity or
redemption, (ii) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit and such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any
Subsidiary Guarantor is a party or by which the Company or any Guarantor is
bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be
paid all sums payable by it under this Indenture and the Securities; and (iv)
the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of such Securities at
maturity or the Redemption Date, as the case may be, then the Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company (accompanied by an Officers' Certificate and an Opinion of Counsel
stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at
any time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections
3.2, 3.3, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.19, and 4.1(3) and
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1(3) and 6.1(4) and
the operation of Sections 6.1(6), 6.1(7) (but only with respect to a Significant
Subsidiary), 6.1(8) (but only with respect to a Significant Subsidiary), 6.1(9)
and 6.1(10), and the events specified in such Sections shall no longer
constitute an Event of Default (clauses (ii) being referred to as the "covenant
defeasance option"), but except as specified above, the remainder of this
Indenture and the Securities shall be unaffected thereby. The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its covenant defeasance
option, the Company may, by written notice to the Trustee prior to the delivery
of the Opinion of Counsel referred to in Section 8.2(9), elect to have any
Subsidiary Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default and the
Subsidiary Guarantees in effect at such time shall terminate. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Sections 6.1(4), 6.1(5),
6.1(6), 6.1(7) (but only with respect to a Significant Subsidiary), 6.1(8) (but
only with respect to a Significant Subsidiary), 6.1(9) and 6.1(10) or because of
the failure of the Company to comply with Section 4.1(3).
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and
(b), the Company's obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.9, 2.10,
2.11, 2.12, 3.1, 3.14, 3.15,
80
3.17, 3.18, 6.7, 7.7, 7.8, and in this Article VIII shall survive until the
Securities have been paid in full. Thereafter, the Company's obligations in
Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee for the benefit of the Holders money in U.S. dollars or U.S.
Government Obligations or a combination thereof for the payment of
principal of and interest on the Securities to maturity or redemption,
as the case may be;
(2) the Company delivers to the Trustee a certificate
from a nationally recognized firm of independent accountants expressing
their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default with respect to this Indenture resulting from the
incurrence of Indebtedness, all or a portion of which will be used to
defease the Securities concurrently with such incurrence);
(4) such legal defeasance or covenant defeasance shall
not result in a breach or violation of or constitute a Default under
this Indenture or any other material agreement or instrument to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that (A) the Securities and (B)
assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit and that no Holder of
the Securities is an insider of the Company, after 91st day following
the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' right generally;
(6) the deposit does not constitute a default under any
other agreement binding on the Company;
(7) the Company delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit does
not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the
date of this Indenture there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Securityholders
will not recognize income, gain or loss for Federal
81
income tax purposes as a result of such deposit and defeasance and will
be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
deposit and legal defeasance had not occurred;
(9) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States to the effect that the Securityholders will not
recognize income, gain or loss for Federal income tax purposes as a
result of such deposit and covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such deposit and covenant
defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities and this
Indenture as contemplated by this Article VIII have been complied with.
SECTION 8.3. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal of or interest on the Securities that remains
unclaimed for two years, and, thereafter, Securityholders entitled to the money
must look to the Company for payment as general creditors.
SECTION 8.5. Indemnity for U.S. Government Obligations. The
Company shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations or
the principal and interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the obligations of the Company under
this Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article VIII until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article VIII; provided, however, that, if
the Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be
82
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders. The Company, the
Subsidiary Guarantors, if any, and the Trustee may amend this Indenture or the
Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article IV in respect of the
assumption by a Successor Company of an obligation of the Company or
any Subsidiary Guarantor under this Indenture;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities or
release a Subsidiary Guarantor upon its designation as an Unrestricted
Subsidiary; provided, however, that the designation is in accord with
the applicable provisions of this Indenture;
(5) to secure the Securities;
(6) to add to the covenants of the Company for the
benefit of the Holders or to surrender any right or power herein
conferred upon the Company;
(7) to make any change that does not adversely affect the
rights of any Securityholder;
(8) to comply with any requirements of the SEC in
connection with qualifying this Indenture under the TIA; or
(9) to provide for the issuance of the Exchange
Securities, which will have terms substantially identical in all
respects to the Initial Securities (except that the transfer
restrictions contained in the Initial Securities will be modified or
eliminated, as appropriate), and which will be treated, together with
any outstanding Initial Securities, as a single issue of securities.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
83
SECTION 9.2. With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the written consent of the Holders of at least a
majority in principal amount at maturity of the Securities. However, without the
consent of each Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the stated rate of or extend the time for
payment of interest on any Security;
(3) reduce the principal or Accreted Value of or extend
the Stated Maturity of any Security;
(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with this Indenture;
(5) make any Security payable in money other than that
stated in the Security;
(6) impair the right of any Holder to receive payment of
principal or Accreted Value of, premium, if any, and interest on such
Holder's Securities on or after the due dates therefor or to institute
suit for the enforcement of any payment on or with respect to such
Holder's Securities;
(7) make any change to the amendment provisions which
require each Holder's consent or to the waiver provisions; or
(8) modify the Subsidiary Guarantees, if any, in any
manner adverse to the Holders of the Securities.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such
84
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver becomes effective. After
an amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.2.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall become
valid or effective more than 120 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article IX if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Sections 7.1 and 7.2) shall
be fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that such amendment is authorized or permitted by this
Indenture.
ARTICLE X
Miscellaneous
SECTION 10.1. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control.
SECTION 10.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
NBC Acquisition Corp.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
85
With a copy to:
Xxxxxxx XxXxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
if to the Trustee:
BNY Midwest Trust Company
Xxx Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA Section 312(c).
SECTION 10.4. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
SECTION 10.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
86
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such 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 or not, in the opinion of
such individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to
factual matters on an Officer's Certificate or on certificates of public
officials.
SECTION 10.6. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which the Trustee knows are so owned shall be so
disregarded. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 10.7. Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 10.8. Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 10.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.
SECTION 10.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
87
SECTION 10.11. Successors. All agreements of the Company in
this Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 10.13. Variable Provisions. The Company initially
appoints the Trustee as Paying Agent and Registrar and custodian with respect to
any Global Securities.
SECTION 10.14. Qualification of Indenture. The Company shall
qualify this Indenture under the TIA in accordance with the terms and conditions
of the Registration Rights Agreement and shall pay all reasonable costs and
expenses (including attorneys' fees and expenses for the Company, the Trustee
and the Holders) incurred in connection therewith, including, but not limited
to, costs and expenses of qualification of this Indenture and the Securities and
printing this Indenture and the Securities. The Trustee shall be entitled to
receive from the Company any such Officers' Certificates, Opinions of Counsel or
other documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
SECTION 10.15. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
NBC ACQUISITION CORP.
By:______________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY
By:______________________________
Name:
Title:
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
No. [___] Principal Amount at maturity
$[______________], as revised by the
Schedule of Increases and Decreases in Global
Security attached hereto
CUSIP NO. ____________
ISIN: ____________
11% Senior Discount Notes due 2013
NBC Acquisition Corp., a Delaware corporation, promises to pay
to CEDE & CO., or registered assigns, the principal sum of [__________________]
Dollars, as revised by the Schedule of Increases and Decreases in Global
Security attached hereto, on March 15, 2013.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the
other side of this Security.
NBC ACQUISITION CORP.
By: ________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BNY MIDWEST TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By ______________________________
Authorized Signatory March 4, 2004
A-1
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
11% Senior Discount Note due 2013
1. Interest
NBC Acquisition Corp., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount at maturity of this Security as described below.
The Senior Discount Notes due 2013 (the "Securities") will
accrete in value until March 15, 2008 at a rate of 11% per annum, compounded
semi-annually as provided in the definition of "Accreted Value" in the Indenture
such that the Accreted Value will equal the principal amount at maturity on
March 15, 2008. Cash interest will not accrue on the Securities prior to March
15, 2008. Cash, interest will accrue on the Securities at the rate of 11% per
annum from March 15, 2008 or from the most recent date to which interest has
been paid and accrued interest will be payable semi-annually in cash and in
arrears to the Holders of record on each March 1 and September 1 immediately
preceding the interest payment date on March 15 and September 15 of each year,
commencing September 15, 2008. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Company
will pay interest (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the March 1 or September 1
next preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depository. The Company will make all
payments in respect of a Definitive Security (including principal, premium, if
any, and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Securities may also be made, in
the case of a Holder of at least $1,000,000 aggregate principal amount at
maturity of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 15 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
A-2
Initially, BNY Midwest Trust Company, an Illinois trust
company (the "Trustee"), will act as Trustee, Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. The Company or any of its domestically
incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of March 4, 2004 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior obligations of the
Company. This is one of the Initial Securities referred to in the Indenture. The
Securities include the Initial Securities issued on the Issue Date, any
Additional Securities issued in accordance with Section 2.16 of the Indenture
and the Exchange Securities. The Initial Securities, Additional Securities and
the Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on, among other things: the
Incurrence of Indebtedness by the Company and its Restricted Subsidiaries, the
payment of dividends and other distributions on the Capital Stock of the Company
and its Restricted Subsidiaries, the purchase or redemption of Capital Stock of
the Company and Capital Stock of such Restricted Subsidiaries, certain purchases
or redemptions of Subordinated Obligations, the Incurrence of Liens by the
Company or its Restricted Subsidiaries, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the business activities and investments of the
Company and its Restricted Subsidiaries, and transactions with Affiliates. In
addition, the Indenture limits the ability of the Company and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Redemption
Except as set forth below, the Securities will not be
redeemable at the option of the Company prior to March 15, 2008. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior notice
mailed by first-class mail to each holder's registered address, at the following
redemption prices (expressed as a percentage of principal amount at maturity
thereof), plus accrued and unpaid interest to the redemption date (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date):
A-3
If redeemed during the 12-month period commencing on March 15
of the years set forth below:
PERIOD REDEMPTION PRICE
------ ----------------
2008 105.500%
2009 102.750%
2010 and thereafter 100.000%
In addition, at any time and from time to time prior to March
15, 2007, the Company may redeem in the aggregate up to 40% of the original
principal amount at maturity of the Securities with the net proceeds of one or
more Equity Offerings at a redemption price of 111% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least 60% of the original principal amount at maturity of the Securities
must remain outstanding after each such redemption and the redemption occurs
within 90 days after the closing of such Equity Offering.
If the optional redemption date is on or after an interest
record date and on or before the related interest payment date, the accrued and
unpaid interest, if any, will be paid to the Person in whose name the Security
is registered at the close of business, on such record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities are listed, or if the Securities are not listed, then on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem to be fair and appropriate, although no Securities of $1,000 in
original principal amount at maturity or less will be redeemed in part. If any
Security is to be redeemed in part only, the notice of redemption relating to
such Security shall state the portion of the principal amount at maturity
thereof to be redeemed. A new Security in principal amount at maturity equal to
the unredeemed portion thereof will be issued in the name of the holder thereof
upon cancellation of the original Security.
In addition, at any time prior to March 15, 2007, within 90
days following the occurrence of a Change of Control, the Company may redeem the
Securities, in whole but not in part, at a redemption price equal to 111% of the
Accreted Value plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date). Notice of
redemption of the Securities pursuant to this paragraph shall be mailed to
holders of the Securities not more than 60 days following the occurrence of a
Change of Control, which notice shall state the redemption date (which shall be
no earlier than 30 days nor later than 60 days from the date such notice is
mailed).
X-0
0. Xxxxxxxxxx Provisions
(a) Upon a Change of Control, any Holder of Securities
will have the right to cause the Company to repurchase all or any part (equal to
$1,000 of the principal amount at maturity or an integral multiple thereof) of
the Securities of such Holder at a purchase price in cash equal to 101% of the
Accreted Value thereof, plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date) as provided
in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates
an Asset Disposition permitted by the Indenture, when the aggregate amount of
Offer Proceeds equals or exceeds $5.0 million, the Company shall make an Offer
for all outstanding Securities pro rata up to a maximum principal amount at
maturity (expressed as a multiple of $1,000 of principal amount at maturity) of
Securities equal to such Offer Proceeds, at a purchase price in cash equal to,
prior to March 15, 2008, 100% of the Accreted Value thereof of the Securities,
plus accrued and unpaid interest to the date of purchase, and at a purchase
price in cash in an amount equal to, on and after March 15, 2008, 100% of the
principal amount at maturity thereof, plus accrued and unpaid interest thereon,
if any, to the date of purchase, in each case, in accordance with the procedures
set forth in Section 3.7 of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and integral multiples of
$1,000 of principal amount at maturity. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before a selection of Securities to be redeemed and ending on
the date of such selection or (ii) any Securities for a period beginning 15 days
before an interest payment date and ending on such interest payment date.
8. Persons Deemed Owners
The registered holder of this Security will be treated as the
owner of it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
A-5
10. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity of the then
outstanding Securities and (ii) any default (other than with respect to
nonpayment or in respect of a provision that cannot be amended without the
written consent of each Securityholder affected) or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount at maturity of the then outstanding Securities. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, or to secure the Securities, or to
add additional covenants, or surrender rights and powers conferred on the
Company and the Subsidiary Guarantors, or to comply with any request of the SEC
in connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder, or to provide
for the issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest when due on the Securities; (ii) default in
payment of principal or premium, if any, on the Securities at maturity, upon
optional redemption, upon required repurchase, upon declaration or otherwise;
(iii) the failure by the Company to comply with its obligations under Article IV
of the Indenture, (iv) failure by the Company or any Subsidiary Guarantor to
comply for 30 days after notice with any of its obligations under the covenants
described under Section 3.9 of the Indenture or under other covenants specified
in the Indenture (in each case, other than a failure to purchase Securities
which shall constitute an Event of Default under clause (ii) above and other
than a failure to comply with Section 3.9 which is covered by clause (iii)
above), (v) the failure by the Company to comply for 60 days after notice with
its other agreements contained in the Indenture, (vi) Indebtedness of the
Company or any Restricted Subsidiary not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or accelerated exceeds
$15.0 million (the "cross acceleration provision"), (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or a Significant
Subsidiary (the "bankruptcy provisions"), (viii) any judgment or decree for the
payment of money in excess of $15.0 million is rendered against the Company or a
Significant Subsidiary and such judgment or decree shall remain undischarged or
unstayed for a period of 60 days after such judgment becomes final and
non-appealable (the "judgment default provision") or (ix) any Subsidiary
Guarantee ceases to be
A-6
in full force and effect (except as contemplated by the terms of the Indenture)
or is declared null and void in a judicial proceeding or any Subsidiary
Guarantor denies or disaffirms its obligations under the Indenture or its
Subsidiary Guarantee. However, a default under clauses (iv) and (v) will not
constitute an Event of Default until the Trustee or the holders of more than 25%
in principal amount at maturity of the outstanding Securities notify the Company
of the default and the Company does not cure such default within the time
specified in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing (other than an
Event of Default described in clause (vii) above), the Trustee or the Holders of
at least 25% in principal amount at maturity of the outstanding Securities may
declare the Accreted Value of, premium, if any, and accrued and unpaid interest,
if any, on all the Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount at maturity of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default or Event of Default (except a Default or Event of Default in
payment of principal or interest) if it determines that withholding notice is in
their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication on the other side of this Security.
A-7
16. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York.
The Company will furnish to any Securityholder upon written
request and without charge to the Securityholder a copy of the Indenture.
Requests may be made to:
NBC Acquisition Corp.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Attention of: Treasurer
A-8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
______________________________
(Print or type assignee's name, address and zip code)
______________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably _________________ appoint agent to transfer this
Security on the books of the Company. The agent may substitute another
to act for him.
________________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:___________________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1 [ ] acquired for the undersigned's own account, without transfer;
or
2 [ ] transferred to the Company; or
3 [ ] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act");
or
4 [ ] transferred pursuant to an effective registration statement
under the Securities Act; or
5 [ ] transferred pursuant to and in compliance with Regulation S
under the Securities Act; or
A-9
6 [ ] transferred to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act), that has furnished to the Trustee a signed
letter containing certain representations and agreements (the
form of which letter appears as Section 2.7 of the Indenture);
or
7 [ ] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided by
Rule 144 under such Act.
_______________________________________
Signature
Signature Guarantee:
____________________________________ _______________________________________
(Signature must be guaranteed) Signature
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this 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
"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:
A-10
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Signature of
Amount of Amount of Principal Amount authorized
decrease in increase in of this Global signatory of
Date of Principal Amount Principal Amount Security following Trustee or
increase/ of this Global of this Global such decrease or Securities
decrease Security Security increase Custodian
-------- -------- -------- -------- ---------
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.7 or 3.9 of the Indenture, check the box:
[ ] [ ]
3.7 3.9
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date:____________ Your Signature ____________________________________________
(Sign exactly as your name appears on the other side of the
Security)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-12
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Depository Legend, if applicable]
No. [_____] Principal Amount at maturity $[____________], as revised
by the Schedule of Increases and Decreases in Global
Security attached hereto
CUSIP NO. _____________
ISIN:_____________
11% Senior Discount Notes due 2013
NBC Acquisition Corp., a Delaware corporation, promises to pay
to CEDE & Co., or registered assigns, the principal sum of [_______________]
Dollars, as revised by the Schedule of Increases and Decreases in Global
Security attached hereto, on March 15, 2013.
Interest Payment Dates: March 15 and September 15.
Record Dates: March 1 and September 1.
Additional provisions of this Security are set forth on the
other side of this Security.
NBC ACQUISITION CORP.
By:________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BNY MIDWEST TRUST COMPANY,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:________________________
Authorized Signatory Date: March 4, 2004
B-1
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
11% Senior Discount Note due 2013
1. Interest
NBC Acquisition Corp., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount at maturity of this Security as described below.
The Senior Discount Notes due 2013 (the "Securities") will
accrete in value until March 15, 2008 at a rate of 11% per annum, compounded
semi-annually as provided in the definition of "Accreted Value" in the Indenture
such that the Accreted Value will equal the principal amount at maturity on
March 15, 2008. Cash interest will not accrue on the Securities prior to March
15, 2008. Cash, interest will accrue on the Securities at the rate of 11% per
annum from March 15, 2008 or from the most recent date to which interest has
been paid and accrued interest will be payable semi-annually in cash and in
arrears to the Holders of record on each March 1 and September 1 immediately
preceding the interest payment date on March 15 and September 15 of each year,
commencing September 15, 2008. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on
which any principal of or interest on any Security is due and payable, the
Company shall irrevocably deposit with the Trustee or the Paying Agent money
sufficient to pay such principal, premium, if any, and/or interest. The Company
will pay interest (except Defaulted Interest) to the Persons who are registered
Holders of Securities at the close of business on the March 1 or September 1
next preceding the interest payment date even if Securities are cancelled,
repurchased or redeemed after the record date and on or before the interest
payment date. Holders must surrender Securities to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by The
Depository Trust Company or any successor depository. The Company will make all
payments in respect of a Definitive Security (including principal, premium, if
any, and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on the Securities may also be made, in
the case of a Holder of at least $1,000,000 aggregate principal amount at
maturity of Securities, by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder elects payment by wire
transfer by giving written notice to the Trustee or the Paying Agent to such
effect designating such account no later than 15 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
B-2
3. Paying Agent and Registrar
Initially, BNY Midwest Trust Company, an Illinois trust
company (the "Trustee"), will act as Trustee, Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice to any Securityholder. The Company or any of its domestically
incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of March 4, 2004 (as it may be amended or supplemented from time to time in
accordance with the terms thereof, the "Indenture"), between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured senior obligations of the
Company. This is one of the Exchange Securities referred to in the Indenture.
The Securities include the Initial Securities issued on the Issue Date, any
Additional Securities issued in accordance with Section 2.16 of the Indenture
and the Exchange Securities. The Initial Securities, Additional Securities and
the Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on, among other things: the
Incurrence of Indebtedness by the Company and its Restricted Subsidiaries, the
payment of dividends and other distributions on the Capital Stock of the Company
and its Restricted Subsidiaries, the purchase or redemption of Capital Stock of
the Company and Capital Stock of such Restricted Subsidiaries, certain purchases
or redemptions of Subordinated Obligations, the Incurrence of Liens by the
Company or its Restricted Subsidiaries, the sale or transfer of assets and
Capital Stock of Restricted Subsidiaries, the issuance or sale of Capital Stock
of Restricted Subsidiaries, the business activities and investments of the
Company and its Restricted Subsidiaries, and transactions with Affiliates. In
addition, the Indenture limits the ability of the Company and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Optional Redemption
Except as set forth below, the Securities will not be
redeemable at the option of the Company prior to March 15, 2008. On and after
such date, the Securities will be redeemable, at the Company's option, in whole
or in part, at any time upon not less than 30 nor more than 60 days prior notice
mailed by first-class mail to each holder's registered address, at the following
redemption prices (expressed as a percentage of principal amount at maturity
thereof), plus accrued and unpaid interest to the redemption date (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant interest payment date):
B-3
If redeemed during the 12-month period commencing on March 15
of the years set forth below:
PERIOD REDEMPTION PRICE
------ ----------------
2008............................................... 105.500%
2009............................................... 102.750%
2010 and thereafter................................ 100.000%
In addition, at any time and from time to time prior to March
15, 2007, the Company may redeem in the aggregate up to 40% of the original
principal amount at maturity of the Securities with the net proceeds of one or
more Equity Offerings at a redemption price of 111% of the Accreted Value
thereof, plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least 60% of the original principal amount at maturity of the Securities
must remain outstanding after each such redemption and the redemption occurs
within 90 days after the closing of such Equity Offering.
If the optional redemption date is on or after an interest
record date and on or before the related interest payment date, the accrued and
unpaid interest, if any, will be paid to the Person in whose name the Security
is registered at the close of business, on such record date, and no additional
interest will be payable to holders whose Securities will be subject to
redemption by the Company.
In the case of any partial redemption, selection of the
Securities for redemption will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Securities are listed, or if the Securities are not listed, then on a pro rata
basis, by lot or by such other method as the Trustee in its sole discretion
shall deem to be fair and appropriate, although no Securities of $1,000 in
original principal amount at maturity or less will be redeemed in part. If any
Security is to be redeemed in part only, the notice of redemption relating to
such Security shall state the portion of the principal amount at maturity
thereof to be redeemed. A new Security in principal amount at maturity equal to
the unredeemed portion thereof will be issued in the name of the holder thereof
upon cancellation of the original Security.
In addition, at any time prior to March 15, 2007, within 90
days following the occurrence of a Change of Control, the Company may redeem the
Securities, in whole but not in part, at a redemption price equal to 111% of the
Accreted Value plus accrued and unpaid interest, if any, to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant interest payment). Notice of redemption of
the Securities pursuant to this paragraph shall be mailed to holders of the
Securities not more than 60 days following the occurrence of a Change of
Control, which notice shall state the redemption date (which shall be no earlier
than 30 days nor later than 60 days from the date such notice is mailed).
B-4
6. Repurchase Provisions
(a) Upon a Change of Control, any Holder of Securities
will have the right to cause the Company to repurchase all or any part (equal to
$1,000 of the principal amount at maturity or an integral multiple thereof) of
the Securities of such Holder at a purchase price in cash equal to 101% of the
Accreted Value thereof, plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of Holders of record on the relevant record
date to receive interest due on the relevant interest payment date) as provided
in, and subject to the terms of, the Indenture.
(b) If the Company or a Restricted Subsidiary consummates
an Asset Disposition permitted by the Indenture, when the aggregate amount of
Offer Proceeds equals or exceeds $5.0 million, the Company shall make an Offer
for all outstanding Securities pro rata up to a maximum principal amount at
maturity (expressed as a multiple of $1,000 of principal amount at maturity) of
Securities equal to such Offer Proceeds, at a purchase price in cash equal to,
prior to March 15, 2008, 100% of the Accreted Value thereof of the Securities,
plus accrued and unpaid interest to the date of purchase, and at a purchase
price in cash in an amount equal to, on and after March 15, 2008, 100% of the
principal amount at maturity thereof, plus accrued and unpaid interest thereon,
if any, to the date of purchase, in each case, in accordance with the procedures
set forth in Section 3.7 of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and integral multiples of
$1,000 of principal amount at maturity. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before a selection of Securities to be redeemed and ending on
the date of such selection or (ii) any Securities for a period beginning 15 days
before an interest payment date and ending on such interest payment date.
8. Persons Deemed Owners
The registered holder of this Security will be treated as the
owner of it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
B-5
10. Defeasance
Subject to certain conditions set forth in the Indenture, the
Company at any time may terminate some or all of its obligations under the
Securities and the Indenture if the Company deposits with the Trustee money or
U.S. Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity of the then
outstanding Securities and (ii) any default (other than with respect to
nonpayment or in respect of a provision that cannot be amended without the
written consent of each Securityholder affected) or noncompliance with any
provision may be waived with the written consent of the Holders of a majority in
principal amount at maturity of the then outstanding Securities. Subject to
certain exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article IV of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities, or to secure the Securities, or to
add additional covenants, or surrender rights and powers conferred on the
Company and the Subsidiary Guarantors, or to comply with any request of the SEC
in connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder, or to provide
for the issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for
30 days in payment of interest when due on the Securities; (ii) default in
payment of principal or premium, if any, on the Securities at maturity, upon
optional redemption, upon required repurchase, upon declaration or otherwise;
(iii) the failure by the Company to comply with its obligations under Article IV
of the Indenture, (iv) failure by the Company or any Subsidiary Guarantor to
comply for 30 days after notice with any of its obligations under the covenants
described under Section 3.9 of the Indenture or under other covenants specified
in the Indenture (in each case, other than a failure to purchase Securities
which shall constitute an Event of Default under clause (ii) above and other
than a failure to comply with Section 3.9 which is covered by clause (iii)
above), (v) the failure by the Company to comply for 60 days after notice with
its other agreements contained in the Indenture, (vi) Indebtedness of the
Company or any Restricted Subsidiary not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or accelerated exceeds
$15.0 million (the "cross acceleration provision"), (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or a Significant
Subsidiary (the "bankruptcy provisions"), (viii) any judgment or decree for the
payment of money in excess of $15.0 million is rendered against the Company or a
Significant Subsidiary and such judgment or decree shall remain undischarged or
unstayed for a period of 60 days after such judgment becomes final and
non-appealable (the "judgment default provision") or (ix) any Subsidiary
Guarantee ceases to be
B-6
in full force and effect (except as contemplated by the terms of the Indenture)
or is declared null and void in a judicial proceeding or any Subsidiary
Guarantor denies or disaffirms its obligations under the Indenture or its
Subsidiary Guarantee. However, a default under clauses (iv) and (v) will not
constitute an Event of Default until the Trustee or the holders of more than 25%
in principal amount at maturity of the outstanding Securities notify the Company
of the default and the Company does not cure such default within the time
specified in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing (other than an
Event of Default described in clause (vii) above), the Trustee or the Holders of
at least 25% in principal amount at maturity of the outstanding Securities may
declare the Accreted Value of, premium, if any, and accrued and unpaid interest,
if any, on all the Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount at maturity of the Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default or Event of Default (except a Default or Event of Default in
payment of principal or interest) if it determines that withholding notice is in
their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent acting on its behalf) manually signs
the certificate of authentication on the other side of this Security.
B-7
16. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to
Minors Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York.
The Company will furnish to any Securityholder upon
request and without charge to the Securityholder a copy of the
Indenture. Requests may be made to:
Nebraska Book Company, Inc.
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Attention of: Treasurer
B-8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_______________________________
(Print or type assignee's name, address and zip code)
_______________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:___________________ Your Signature ______________________________________
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-9
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Signature of
Amount of Amount of Principal Amount authorized
decrease in increase in of this Global signatory of
Date of Principal Amount Principal Amount Security following Trustee or
increase/ of this Global of this Global such decrease or Securities
decrease Security Security increase Custodian
-------- -------- -------- -------- ---------
B-10
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 3.7 or 3.9 of the Indenture, check the box:
[ ] [ ]
3.7 3.9
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state
the amount in principal amount (must be integral multiple of $1,000): $
Date: __________________ Your Signature _____________________________________
(Sign exactly as your name appears on the other side
of the Security)
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
B-11
EXHIBIT C
FORM OF SUBSIDIARY GUARANTEE
This Supplemental Indenture, dated as of [__________] (this
"Supplemental Indenture" or "Guarantee"), among [name of Subsidiary Guarantor]
(the "Guarantor"), NBC Acquisition Corp. (together with its successors and
assigns, the "Company"), [each other then existing Subsidiary Guarantor under
the Indenture referred to below,] and BNY Midwest Trust Company, as Trustee
under the Indenture referred to below.
WITNESSETH:
WHEREAS, the Company and the Trustee have heretofore executed
and delivered an Indenture, dated as of March 4, 2004 (as amended, supplemented,
waived or otherwise modified, the "Indenture"), providing for the issuance of an
aggregate principal amount at maturity of $77.0 million of 11% Senior Discount
Notes due 2013 of the Company (the "Securities");
WHEREAS, Section 3.12 of the Indenture provides that the
Company is required to cause each Restricted Subsidiary which Guarantees
Indebtedness of the Company to execute and deliver to the Trustee a Subsidiary
Guarantee pursuant to which such Subsidiary Guarantor will unconditionally
Guarantee, on a joint and several basis, the full and prompt payment of the
principal of, premium, if any and interest on the Securities on the same terms
as the Guarantee of such Indebtedness except that if such Indebtedness is a
Subordinated Obligation, any such Guarantee of such Restricted Subsidiary with
respect to such Indebtedness shall be subordinated to such Subsidiary
Guarantor's Subsidiary Guarantee of the Securities to the same extent as such
Indebtedness is subordinated to the Securities; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee
and the Company are authorized to execute and deliver this Supplemental
Indenture to amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor, the Company[, the other Subsidiary Guarantors] and
the Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Securities as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. As used in this Guarantee, terms
defined in the Indenture or in the preamble or recital hereto are used herein as
therein defined, except that the term "Holders" in this Guarantee shall refer to
the term "Holders" as defined in the Indenture and the Trustee acting on behalf
or for the benefit of such holders. The words "herein," "hereof" and "hereby"
and other words of similar import used in this Supplemental Indenture refer to
this Supplemental Indenture as a whole and not to any particular section hereof.
C-1
ARTICLE II
Guarantee
SECTION 2.1 Guarantee. The Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities the full and punctual payment when due, whether at
maturity, by acceleration, by redemption or otherwise, of the principal of,
premium, if any, and interest on the Securities and all other obligations of the
Company under the Indenture (all the foregoing being hereinafter collectively
called the "Obligations"). The Guarantor further agrees (to the extent permitted
by law) that the Obligations may be extended or renewed, in whole or in part,
without notice or further assent from it, and that it will remain bound under
this Article II notwithstanding any extension or renewal of any Obligation.
The Guarantor waives presentation to, demand of payment from
and protest to the Company of any of the Obligations and also waives notice of
protest for nonpayment. The Guarantor waives notice of any default under the
Securities or the Obligations. The obligations of the Guarantor hereunder shall
not be affected by (a) the failure of any Holder to assert any claim or demand
or to enforce any right or remedy against the Company or any other person under
the Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of the Indenture, the Securities
or any other agreement; (d) the release of any security held by any Holder or
the Trustee for the Obligations or any of them; (e) the failure of any Holder to
exercise any right or remedy against any other Subsidiary Guarantor; or (f) any
change in the ownership of the Company.
The Guarantor further agrees that its Guarantee herein
constitutes a guarantee of payment when due (and not a guarantee of collection)
and waives any right to require that any resort be had by any Holder to any
security held for payment of the Obligations.
The obligations of the Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Guarantor herein shall not be discharged or impaired or otherwise affected
by the failure of any Holder to assert any claim or demand or to enforce any
remedy under the Indenture, the Securities or any other agreement, by any waiver
or modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations, or by any other act or thing
or omission or delay to do any other act or thing which may or might in any
manner or to any extent vary the risk of the Guarantor or would otherwise
operate as a discharge of the Guarantor as a matter of law or equity.
The Guarantor further agrees that its Guarantee herein shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of
C-2
principal of or interest on any of the Obligations is rescinded or must
otherwise be restored by any Holder upon the bankruptcy or reorganization of the
Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder has at law or in equity against the Guarantor by
virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, the Guarantor hereby promises to and will, upon receipt
of written demand by the Trustee, forthwith pay, or cause to be paid, in cash,
to the Holders an amount equal to the sum of (i) the unpaid amount of such
Obligations then due and owing and (ii) accrued and unpaid interest on such
Obligations then due and owing (but only to the extent not prohibited by law).
The Guarantor further agrees that, as between the Guarantor,
on the one hand, and the Holders, on the other hand, (x) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in the Indenture
for the purposes of the Guarantee herein, notwithstanding any stay, injunction
or other prohibition preventing such acceleration in respect of the Obligations
guaranteed hereby and (y) in the event of any such declaration of acceleration
of such Obligations, such Obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantor for the purposes of this
Guarantee.
The Guarantor also agrees to pay any and all reasonable costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
the Holders in enforcing any rights under this Section.
SECTION 2.2 Limitation on Liability; Termination, Release and
Discharge. The obligations of the Guarantor hereunder will be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of the Guarantor (including, without limitation, any guarantees
under the Credit Agreement) and after giving effect to any collections from or
payments made by or on behalf of any other Subsidiary Guarantor in respect of
the obligations of such other Subsidiary Guarantor under its Subsidiary
Guarantee or pursuant to its contribution obligations under the Indenture or as
set forth below, result in the obligations of the Guarantor under this Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law.
A Subsidiary Guarantee of a Subsidiary Guarantor will be
automatically released upon:
(1) (a) the sale, disposition or other transfer
(including through merger or consolidation) of the Capital Stock (including any
sale, disposition or other transfer of Capital Stock following which the
applicable Subsidiary Guarantor is no longer a Restricted Subsidiary), or all or
substantially all the assets, of the applicable Subsidiary Guarantor if such
sale, disposition or other transfer is made in compliance with this Indenture;
and
(b) the release or discharge of the Subsidiary Guarantee
by such Restricted Subsidiary of Indebtedness of the Company which resulted in
the obligation to Guarantee the Securities; and
C-3
(2) the release of such Subsidiary Guarantor from its
Guarantees, if any, of, and all pledges and security, if any, granted in
connection with any other Indebtedness of the Company.
In addition, the Company will not permit any Guarantor to
consolidate with or merge with or into any Person (other than another Subsidiary
Guarantor) and will not permit the conveyance, transfer or lease of
substantially all of the assets of any Guarantor unless:
(1) (a) the resulting, surviving or transferee Person
will be a corporation, partnership, trust or limited liability company organized
and existing under the laws of the United States of America, any State of the
United States or the District of Columbia and such Person (if not such
Subsidiary Guarantor) will expressly assume, by supplemental indenture, executed
and delivered to the Trustee, all the obligations of such Subsidiary Guarantor
under its Subsidiary Guarantee; (b) immediately after giving effect to such
transaction (and treating any Indebtedness that becomes an obligation of the
resulting, surviving or transferee Person or any Restricted Subsidiary as a
result of such transaction as having been Incurred by such Person or such
Restricted Subsidiary at the time of such transaction), no Default of Event of
Default shall have occurred and be continuing; and (c) the Company will have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with the Indenture; or
(2) the transaction is made in compliance with Section
3.7 of the Indenture.
SECTION 2.3 Right of Contribution. The Guarantor hereby
agrees that to the extent that any Subsidiary Guarantor shall have paid more
than its proportionate share of any payment made under the Subsidiary
Guarantees, the Guarantor shall be entitled to seek and receive contribution
from and against any other Subsidiary Guarantor (including the Guarantor) who
has not paid its proportionate share of such payment. The provisions of this
Section 2.3 shall in no respect limit the obligations and liabilities of the
Guarantor to the Trustee and the Holders and the Guarantor shall remain liable
to the Trustee and the Holders for the full amount guaranteed by the Guarantor
hereunder.
SECTION 2.4 No Subrogation. Notwithstanding any payment or
payments made by the Guarantor hereunder, the Guarantor shall not be entitled to
be subrogated to any of the rights of the Trustee or any Holder against the
Company or any other Subsidiary Guarantor or any collateral security or
guarantee or right of offset held by the Trustee or any Holder for the payment
of the Obligations, nor shall the Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company or any other Subsidiary Guarantor
in respect of payments made by the Guarantor hereunder, until all amounts owing
to the Trustee and the Holders by the Company on account of the Obligations are
paid in full. If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time when all of the Obligations shall not have been
paid in full, such amount shall be held by the Guarantor in trust for the
Trustee and the Holders, segregated from other funds of the Guarantor, and
shall, forthwith upon receipt by the Guarantor, be turned over to the Trustee in
the exact form received by the Guarantor (duly indorsed by the Guarantor to the
Trustee, if required), to be applied against the Obligations.
C-4
ARTICLE III
Miscellaneous
SECTION 3.1 Notices. All notices and other communications
pertaining to this Guarantee or any Security shall be in writing and shall be
deemed to have been duly given upon the receipt thereof. Such notices shall be
delivered by hand, or mailed, certified or registered mail with postage prepaid
(a) if to the Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company, and (b) if to
the Holders or the Trustee, as provided in the Indenture. The Guarantor by
notice to the Trustee may designate additional or different addresses for
subsequent notices to or communications with the Guarantor.
SECTION 3.2 Parties. Nothing expressed or mentioned in this
Guarantee is intended or shall be construed to give any Person, firm or
corporation, other than the Holders and the Trustee, any legal or equitable
right, remedy or claim under or in respect of this Guarantee or any provision
herein contained.
SECTION 3.3 Governing Law. This Agreement shall be governed by
the laws of the State of New York.
SECTION 3.4 Severability Clause. In case any provision in this
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and such provision shall be ineffective only to the extent of
such invalidity, illegality or unenforceability.
SECTION 3.5 Waivers and Remedies. Neither a failure nor a
delay on the part of the Holders or the Trustee in exercising any right, power
or privilege under this Guarantee shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Holders and
the Trustee herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Guarantee or
at law, in equity, by statute or otherwise.
SECTION 3.6 Successors and Assigns. Subject to Section 2.2
hereof, (a) this Guarantee shall be binding upon and inure to the benefit of the
Guarantor, the Trustee, any other parties hereto, the Holders and their
respective successors and assigns and (b) in the event of any transfer or
assignment of rights by any Holder, the rights and privileges conferred upon
that party in this Guarantee and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Guarantee and the Indenture.
SECTION 3.7 Modification, etc. Subject to the provisions of,
and except as otherwise provided in, Article IX of the Indenture (including
without limitation Sections 9.1 and 9.2 thereof), no modification, amendment or
waiver of any provision of this Guarantee, nor the consent to any departure by
the Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and consented to by the Trustee (with the consent of the Holders
of at least a majority of the Securities if required by Section 9.2 of the
Indenture) and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which it
C-5
was given. No notice to or demand on the Guarantor in any case shall entitle
such Guarantor or any other guarantor to any other or further notice or demand
in the same, similar or other circumstances.
SECTION 3.8 Entire Agreement. This Guarantee is intended by
the parties to be a final expression of their agreement in respect of the
subject matter contained herein and, together with the Indenture, supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
SECTION 3.9 Ratification of Indenture; Supplemental Indentures
Part of Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture shall
form a part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture.
SECTION 3.10 Counterparts. The parties hereto may sign one or
more copies of this Supplemental Indenture in counterparts, all of which
together shall constitute one and the same agreement.
SECTION 3.11 Headings. The headings of the Articles and the
sections in this Guarantee are for convenience of reference only and shall not
be deemed to alter or affect the meaning or interpretation of any provisions
hereof.
C-6
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NAME OF GUARANTOR],
By: _______________________________________
Name:
Title:
Address:
NBC ACQUISITION CORP.
By: _______________________________________
Name:
Title:
[Add signature block for any other existing
Subsidiary Guarantors]
BNY MIDWEST TRUST COMPANY
By: _______________________________________
Name:
Title:
C-7
