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EXHIBIT 4.1
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INDENTURE
Dated as of February 10, 1998
Between
COOPERATIVE COMPUTING, INC., as Issuer,
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
__________________
$100,000,000
9% Senior Subordinated Notes due 2008, Series A
9% Senior Subordinated Notes due 2008, Series B
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INDENTURE dated as of February 10, 1998, between COOPERATIVE
COMPUTING, INC., a Delaware corporation (the "Company"), and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acceleration Notice" has the meaning provided in Section 6.02.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Subsidiaries or assumed in connection with the acquisition of assets from such
Person and not incurred by such Person in connection with, or in anticipation
or contemplation of, such Person becoming a Subsidiary of the Company or such
acquisition, merger or consolidation.
"Acquired Preferred Stock" means Preferred Stock of any Person at the
time such Person becomes a Subsidiary of the Company or at the time it merges
or consolidates with the Company or any of its Subsidiaries and not issued by
such person in connection with, or in anticipation or contemplation of, such
acquisition, merger or consolidation.
"Affiliate" means, as to any Person, any other Person who, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, the first referred to Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Affiliate Transaction" has the meaning provided in Section 4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"ARISB Acquisition" means the acquisition of certain assets of ADP
Claims Solutions, Group, Inc. ("ADP") pursuant to the Asset Purchase Agreement
dated November 20, 1997 between the Company and ADP.
"Asset Acquisition" means (i) an Investment by the Company or any
Subsidiary of the Company in any other Person pursuant to which such Person
shall become a Subsidiary of the Company or shall be consolidated or merged
with the Company or any Subsidiary of the Company or (ii) the acquisition by
the Company or any Subsidiary of the Company of assets of any Person comprising
a division or line of business of such Person.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary
course of business), assignment or other transfer for value by the Company or
any of its Subsidiaries (excluding any Sale and Leaseback Transaction or any
pledge of assets or
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stock by the Company or any of its Subsidiaries) to any Person other than the
Company or a Wholly Owned Subsidiary of the Company of (i) any Capital Stock of
any Subsidiary of the Company or (ii) any other property or assets of the
Company or any Subsidiary of the Company other than in the ordinary course of
business; provided, however, that for purposes of Section 4.08, Asset Sales
shall not include (a) a transaction or series of related transactions in which
the Company or its Subsidiaries receive aggregate consideration of less than
$1,000,000, (b) transactions covered by the Article Five or permitted by
Section 4.09, (c) a Restricted Payment that otherwise qualifies under Section
4.10, (d) any 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
Subsidiaries and that is disposed of, in each case, in the ordinary course of
business or (e) sales of receivables and leases in connection with the lease
financing activities described in clause (xii) of the definition of "Permitted
Indebtedness."
"Asset Swap" means the execution of a definitive agreement, subject
only to approval of the United States Federal Trade Commission, if applicable,
and other customary closing conditions, that the Company in good faith believes
will be satisfied, for a substantially concurrent purchase and sale, or
exchange, of Productive Assets between the Company or any of its Subsidiaries
and another Person or group of affiliated Persons; provided that any amendment
to or waiver of any closing condition that individually or in the aggregate is
material to the Asset Swap shall be deemed to be a new Asset Swap; it being
understood that an Asset Swap may include a cash equalization payment made in
connection therewith provided that such cash payment, if received by the
Company or its Subsidiaries, shall be deemed to be proceeds received from an
Asset Sale and applied in accordance with Section 4.08.
"Bankruptcy Law" has the meaning provided in Section 6.01.
"Board of Directors" means the Board of Directors or other governing
body charged with the ultimate management of any Person, or any duly authorized
committee thereof.
"Board Resolution" means, with respect to any Person, a duly adopted
resolution of the Board of Directors of such Person or a duly authorized
committee of such Board of Directors.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York or Chicago, Illinois are
not required to be open.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the obligation
of such Person to pay rent or other amounts under a lease to which such Person
is a party that is required to be classified and accounted for as a capital
lease obligation under GAAP, and for purposes of this definition, the amount of
such obligation at any date shall be the capitalized amount of such obligation
at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or Xxxxx'x Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from Xxxxx'x
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a
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foreign bank having at the date of acquisition thereof combined capital and
surplus of not less than $200,000,000; (v) repurchase obligations with a term
of not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications
specified in clause (iv) above; and (vi) investments in money market funds that
invest substantially all their assets in securities of the types described in
clauses (i) through (v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for
purposes of Section 13(d) of the Exchange Act (a "Group") (whether or not
otherwise in compliance with the provisions of this Indenture), other than to
Xxxxx Muse, any of its Affiliates, officers and directors, Xxxxx X. Xxxxxx or
any of his Affiliates or Xxxxxxx X. Xxxxxx or any of his Affiliates
(collectively, the "Permitted Holders"); or (ii) a majority of the board of
directors of the Company or Holding shall consist of Persons who are not
Continuing Directors; or (iii) the acquisition by any Person or Group (other
than the Permitted Holders or any direct or indirect Subsidiary of any
Permitted Holder, including without limitation, Holding) of the power, directly
or indirectly, to vote or direct the voting of securities having more than 50%
of the ordinary voting power for the election of directors of the Company or
Holding.
"Change of Control Date" has the meaning provided in Section 4.15.
"Change of Control Offer" has the meaning provided in Section 4.15.
"Change of Control Payment Date" has the meaning provided in Section
4.15.
"Change of Control Redemption" has the meaning specified in paragraph
5 of the Securities.
"Commodity Agreement" means any commodity futures contract, commodity
option or other similar agreement or arrangement entered into by the Company or
any of its Subsidiaries designed to protect the Company or any of its
Subsidiaries against fluctuations in the price of commodities actually used in
the ordinary course of business of the Company and its Subsidiaries.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company" shall
mean such successor.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
its Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of Consolidated EBITDA for the four
quarter period of the most recent four consecutive fiscal quarters ending prior
to the date of such determination (the "Four Quarter Period") to (ii)
Consolidated Fixed Charges for such Four Quarter Period; provided, however,
that (1) if the Company or any Subsidiary of the Company has incurred any
Indebtedness or issued any preferred stock since the beginning of such Four
Quarter 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 or issuance of preferred stock,
Consolidated EBITDA and Consolidated Fixed Charges for such Four Quarter Period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness or issuance of preferred stock as if such Indebtedness had been
incurred or such preferred stock had been issued on the first day of such Four
Quarter Period and the discharge of any other Indebtedness or preferred stock
repaid, repurchased, defeased or otherwise discharged with the proceeds of such
new Indebtedness or preferred stock as if such discharge had occurred on the
first day of such Four Quarter
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Period, (2) if since the beginning of such Four Quarter Period the Company or
any Subsidiary of the Company shall have made any Asset Sale, the Consolidated
EBITDA for such Four Quarter Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Sale for such Four Quarter Period or increased by an
amount equal to the Consolidated EBITDA (if negative) directly attributable
thereto for such Four Quarter Period and Consolidated Fixed Charges for such
Four Quarter Period shall be reduced by an amount equal to the Consolidated
Fixed Charges directly attributable to any Indebtedness or preferred stock of
the Company or any Subsidiary of the Company repaid, repurchased, defeased or
otherwise discharged with respect to the Company and its continuing
Subsidiaries in connection with such Asset Sale for such Four Quarter Period
(or, if the Capital Stock of any Subsidiary of the Company are sold, the
Consolidated Fixed Charges for such Four Quarter Period directly attributable
to the Indebtedness of such Subsidiary to the extent the Company and its
continuing Subsidiaries are no longer liable for such Indebtedness after such
sale), (3) if since the beginning of such Four Quarter Period the Company or
any Subsidiary of the Company (by merger or otherwise) shall have made an
Investment in any Subsidiary of the Company (or any Person that becomes a
Subsidiary of 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
an operating unit of a business, Consolidated EBITDA and Consolidated Fixed
Charges for such Four Quarter Period shall be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness or the issuance of
any preferred stock) as if such Investment or acquisition occurred on the first
day of such Four Quarter Period and (4) if since the beginning of such Four
Quarter Period any Person (that subsequently became a Subsidiary or was merged
with or into the Company or any Subsidiary of the Company since the beginning
of such Four Quarter Period) shall have made any Asset Sale 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 Subsidiary of the Company
during such Four Quarter Period, Consolidated EBITDA and Consolidated Fixed
Charges for such Four Quarter Period shall be calculated after giving pro forma
effect thereto as if such Asset Sale, Investment or acquisition of assets
occurred on, with respect to any Investment or acquisition, the first day of
such Four Quarter Period and, with respect to any Asset Sale, the day prior to
the first day of such Four Quarter Period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the
amount of income or earnings relating thereto and the amount of Consolidated
Fixed Charges associated with any Indebtedness incurred or the issuance of any
preferred stock in connection therewith, the pro forma calculations shall be
determined reasonably and in good faith by a responsible financial or
accounting officer of the Company. If any Indebtedness bears a floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness shall 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 agreement under which Interest Swap Obligations are outstanding
applicable to such Indebtedness if such agreement under which such Interest
Swap Obligations are outstanding has a remaining term as at the date of
determination in excess of 12 months); provided, however, that the Consolidated
Interest Expense of the Company attributable to interest on any Indebtedness
incurred under a revolving credit facility computed on a pro forma basis shall
be computed based upon the average daily balance of such Indebtedness during
the Four Quarter Period.
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income for such period, plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) Consolidated Income Tax Expense
for such period; (ii) Consolidated Fixed Charges for such period; and (iii)
Consolidated Non-cash Charges for such period less all non- cash items
increasing Consolidated Net Income for such period.
"Consolidated Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) Consolidated Interest Expense and
(ii) the amount of all cash dividend payments or payments in Disqualified
Capital Stock on Preferred Stock of Subsidiaries of such Person or on
Disqualified Capital Stock of such Person held by Persons other than the
Company or any Wholly Owned Subsidiaries paid, accrued or scheduled to be paid
or accrued during such period.
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"Consolidated Income Tax Expense" means, with respect to the Company
for any period, the provision for Federal, state, local and foreign income
taxes payable by the Company and its Subsidiaries for such period as determined
on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for
any period, without duplication, the sum of (i) the interest expense of such
Person and its Subsidiaries for such period as determined on a consolidated
basis in accordance with GAAP, including, without limitation, (a) any
amortization of debt discount, (b) the net cost under Interest Swap Obligations
(including any amortization of discounts), (c) the interest portion of any
deferred payment obligation, (d) all commissions, discounts and other fees and
charges owed with respect to letters of credit, bankers' acceptance financing
or similar facilities, and (e) all accrued or capitalized interest and (ii) the
interest component of Capitalized Lease Obligations paid or accrued by such
Person and its Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period, the
aggregate net income (or loss) of such Person and its Subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP; provided,
however, that there shall be excluded therefrom, without duplication, (a) gains
and losses from Asset Sales (without regard to the $1,000,000 limitation set
forth in the definition thereof) or abandonments or reserves relating thereto
and the related tax effects, (b) items classified as extraordinary or
nonrecurring gains and losses, and the related tax effects according to GAAP,
(c) the net income (or loss) of any Person acquired in a pooling of interests
transaction accrued prior to the date it becomes a Subsidiary of such first
referred to Person or is merged or consolidated with it or any of its
Subsidiaries, (d) the net income of any Subsidiary to the extent that the
declaration of dividends or similar distributions by that Subsidiary of that
income is restricted by contract, operation of law or otherwise, (e) the net
income of any Person, other than the Company or a Subsidiary or other than an
Unrestricted Subsidiary, except to the extent of the lesser of (x) dividends or
distributions paid to such first referred to Person or its Subsidiary by such
Person and (y) the net income of such Person (but in no event less than zero),
and the net loss of such Person shall be included only to the extent of the
aggregate Investment of the first referred to Person or a consolidated
Subsidiary of such Person and any non-cash expenses attributable to grants or
exercises of employee stock options, (f) charges relating to the amortization
or write-off of intangibles or other goodwill arising from the ARISB
Acquisition or the Triad Acquisition and (g) the cumulative effect of changes
in accounting principles.
"Consolidated Non-Cash Charges" means, with respect to any Person for
any period, the aggregate depreciation, amortization and other non-cash
expenses of such Person and its Subsidiaries (excluding any such charges
constituting an extraordinary or nonrecurring item) reducing Consolidated Net
Income of such Person and its Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP.
"Continuing Director" means, as of the date of determination, any
Person who (i) was a member of the board of directors of the Company or
Holdings on the Issue Date, (ii) was nominated for election or elected to the
board of directors of the Company or Holdings, as the case may be, with the
affirmative vote of a majority of the Continuing Directors who were members of
such board of directors at the time of such nomination or election or (iii) is
a representative of a Permitted Holder.
"Corporate Leases" mean the lease agreements with respect to the
Company's offices and facilities in Austin, Texas, leased by the Company from a
corporation owned by Messrs. Xxxxx and Xxxxxxx Xxxxxx and offices and
facilities in Livermore, California, leased from Triad Park LLC, each as in
effect on the Issue Date or as may be subsequently amended in a way not
materially adverse to holders of the Securities or the Company.
"Corporate Trust Office of the Trustee" means the principal office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of original execution of this
Indenture is located at Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000, Attention: Corporate Trust Department.
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"Credit Agreement" means (i) the Credit Agreement, dated as of
February 27, 1997, as amended and restated as of February 10, 1998, among the
Company, Holding, The Chase Manhattan Bank, as administrative agent,
NationsBank of Texas, N.A., as Lender, and any other financial institutions
from time to time party thereto, together with the related documents thereto
(including, without limitation, any guarantee agreements and security
documents) as the same may be amended, supplemented, restated, restored or
otherwise modified from time to time, including amendments, supplements or
modifications relating to the addition or elimination of Subsidiaries of the
Company as borrowers or guarantors or other credit parties thereunder, and (ii)
any renewal, extension, refunding, restructuring, restatements, replacement or
refinancing thereof (whether with the original administrative agent and lenders
or another administrative agent or agents or one or more other lenders and
whether provided under the original Credit Agreement or one or more other
credit or other agreements).
"Currency Agreement" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement designed to protect
the Company or any of its Subsidiaries against fluctuations in currency values.
"Custodian" has the meaning provided in Section 6.01.
"Default" means an event or condition the occurrence of which is, or
with the lapse of time or the giving of notice or both would be, an Event of
Default.
"Depository" means, with respect to the Securities issued in the form
of one or more Global Securities, The Depository Trust Company or another
Person designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (i) all obligations under the
Credit Agreement and (ii) any other Senior Indebtedness of the Company which,
at the date of determination, has an aggregate principal amount outstanding of,
or under which, at the date of determination, the holders thereof are committed
to lend up to, at least $10,000,000 and is specifically designated by the
Company in the instrument evidencing or governing such Senior Indebtedness as
"Designated Senior Indebtedness" for purposes of this Indenture.
"Disqualified Capital Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable on or before February 1, 2008, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the sole option
of the holder thereof (except, in each case, upon the occurrence of a Change of
Control), in whole or in part, on or prior to February 1, 2008; provided that
only the portion of Capital Stock which so matures or is mandatorily redeemable
or is so redeemable at the sole option of the holder thereof prior to February
1, 2008 shall be deemed to be Disqualified Capital Stock.
"Equity Offering" means a private sale or an underwritten public
offering of Capital Stock (other than Disqualified Capital Stock) of the
Company or Holdings (to the extent, in the case of Holdings, that the net cash
proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Company).
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 9% Senior Subordinated Notes due 2008,
Series B, to be issued in exchange for the Initial Securities pursuant to the
Registration Rights Agreement.
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"Final Maturity Date" means February 1, 2008.
"Financial Monitoring and Oversight Agreements" means the Monitoring
and Oversight Agreement among the Company, Holdings and Xxxxx, Muse & Co.
Partners L.P. ("Xxxxx Muse Partners"), as in effect on the Issue Date and the
Financial Advisory Agreement among the Company, Holdings and Xxxxx Muse
Partners, each as in effect on the Issue Date or as may be subsequently amended
in a way not materially adverse to holders of the Securities or the Company.
"Funding Guarantor" has the meaning provided in Section 11.
"GAAP," unless otherwise indicated, 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 the Commission 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 shall be computed in conformity with GAAP.
"Global Securities" means one or more 144A Global Securities,
Regulation S Global Securities or IAI Global Securities.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantor" means any Subsidiary of the Company that becomes a party
hereto pursuant to Section 4.14.
"Guarantor Blockage Notice" has the meaning provided in Section 12.03.
"Guarantor Payment Blockage Period" has the meaning provided in
Section 12.03.
"Guarantor Senior Indebtedness" means, at any date, (x) all
obligations under Guarantees of the Credit Agreement, if any (including any
interest accruing after the commencement of any proceeding under any Bankruptcy
Law whether or not such interest is an allowable claim enforceable against the
Guarantor in any such proceeding) and (y) all other Indebtedness of the
Guarantor, including interest and premium, if any, thereon, unless, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that the obligations in respect of such
Indebtedness are not superior in right of payment to the Guarantor's guarantee
of the Securities; provided however, that Guarantor Senior Indebtedness will
not include (1) any obligation of the Guarantor to any Subsidiary, (2) any
liability for federal, state, foreign, local or other taxes owed or owing by
the Guarantor, (3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including Guarantees thereof or
instruments evidencing such liabilities) or (4) any Indebtedness, guarantee or
obligation of the Guarantor that is expressly subordinate or junior in right of
payment to any other Indebtedness, guarantee or obligation of the Guarantor,
including any guarantees of Senior Subordinated Indebtedness.
"Guarantor Senior Subordinated Indebtedness" means, with respect to a
Guarantor, the obligations of such Guarantor under the Subsidiary Guarantee and
any other Indebtedness of such Guarantor that specifically provides that such
Indebtedness is to rank pari passu with the Subsidiary Guarantee in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness or other obligations of the Guarantor which is not Guarantor
Senior Indebtedness.
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"Xxxxx Muse" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a Texas
corporation.
"Holders" means the registered holders of the Securities.
"Holding" means Cooperative Computing Holding Company, Inc., a Texas
corporation which owns all the capital stock of the Company.
"IAI Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Securities transferred
after the Issue Date to Institutional Accredited Investors.
"incur" has the meaning set forth in Section 4.04.
"Indebtedness" means with respect to any Person, without duplication,
any liability of such Person (i) for borrowed money, (ii) evidenced by bonds,
debentures, notes or other similar instruments, (iii) constituting Capitalized
Lease Obligations, (iv) incurred or assumed as the deferred purchase price of
property, or pursuant to conditional sale obligations and title retention
agreements (but excluding trade accounts payable arising in the ordinary course
of business), (v) for the reimbursement of any obligor on any letter of credit,
banker's acceptance or similar credit transaction, (vi) for Indebtedness of
others guaranteed by such Person, (vii) for Interest Swap Obligations,
Commodity Agreements and Currency Agreements and (viii) for Indebtedness of any
other Person of the type referred to in clauses (i) through (vii) which is
secured by any Lien on any property or asset of such first referred to Person,
the amount of such Indebtedness being deemed to be the lesser of the value of
such property or asset or the amount of the Indebtedness so secured. The amount
of Indebtedness of any Person at any date shall be the outstanding principal
amount of all unconditional obligations described above, as such amount would
be reflected on a balance sheet prepared in accordance with GAAP, and the
maximum liability at such date of such Person for any contingent obligations
described above.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Initial Purchasers" means Chase Securities Inc. and NationsBanc
Xxxxxxxxxx Securities LLC.
"Initial Securities" means the 9% Senior Subordinated Notes due 2008,
Series A, of the Company.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date" means each semiannual interest payment date on
February 1 and August 1 of each year, commencing on August 1, 1998.
"Interest Record Date" for the interest payable on any Interest
Payment Date (except a date for payment of defaulted interest) means the
January 15 or July 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Interest Swap Obligations" means the obligations of any Person under
any interest rate protection agreement, interest rate future, interest rate
option, interest rate swap, interest rate cap or other interest rate hedge or
arrangement.
"Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (in each case, including by way of Guarantee or
similar arrangement) or capital contribution to any Person, but excluding any
debt or extension of credit represented by a bank deposit other than a time
deposit.
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For purposes of Section 4.10, (A) "Investment" shall include the portion
(proportionate to the Company's equity interest in a Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of the net
assets of such Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Unrestricted Subsidiary as a Subsidiary, the Company
shall be deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (1) the Company's "Investment"
in such Subsidiary at the time of such redesignation less (2) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is so redesignated from an Unrestricted Subsidiary to a Subsidiary;
and (B) any property transferred to or from an Unrestricted Subsidiary shall 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.
"Issue Date" means the date on which the Securities are originally
issued.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof and any
agreement to give any security interest).
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents (including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents) received by the Company or any of its Subsidiaries from such Asset
Sale net of (i) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions, recording fees, relocation costs, title
insurance premiums, appraisers, fees and costs reasonably incurred in
preparation of any asset or property for sale), (ii) taxes paid or reasonably
estimated to be payable (calculated based on the combined state, federal and
foreign statutory tax rates applicable to the Company or the Subsidiary engaged
in such Asset Sale), (iii) all distributions and other payments required to be
made to any Person owning a beneficial interest in the assets subject to sale
or minority interest holders in Subsidiaries or joint ventures as a result of
such Asset Sale, (iv) any reserves established in accordance with GAAP for
adjustment in respect of the sales price of such asset or assets or for any
liabilities associated with such Asset Sale, and (v) repayment of Indebtedness
secured by assets subject to such Asset Sale; provided, however, that if the
instrument or agreement governing such Asset Sale requires the transferor to
maintain a portion of the purchase price in escrow (whether as a reserve for
adjustment of the purchase price or otherwise) or to indemnify the transferee
for specified liabilities in a maximum specified amount, the portion of the
cash or Cash Equivalents that is actually placed in escrow or segregated and
set aside by the transferor for such indemnification obligation shall not be
deemed to be Net Cash Proceeds until the escrow terminates or the transferor
ceases to segregate and set aside such funds, in whole or in part, and then
only to the extent of the proceeds released from escrow to the transferor or
that are no longer segregated and set aside by the transferor.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating
to, any Indebtedness.
"Officer" means the Chairman, any Vice Chairman, the President, any
Vice President, the Chief Financial Officer, the Treasurer or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two Officers or
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company
complying with Sections 13.04 and 13.05.
"144A Global Security" means a permanent global security in registered
form representing the aggregate principal amount of Initial Securities sold in
reliance on Rule 000X.
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"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Participants" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" has the meaning provided in the definition of
"Change of Control."
"Permitted Indebtedness" means, without duplication, (i) Indebtedness
outstanding on the Issue Date; (ii) Indebtedness of the Company or a Subsidiary
incurred pursuant to the Credit Agreement (including guarantees thereof) in an
aggregate principal amount at any time outstanding not to exceed $100,000,000;
(iii) Indebtedness evidenced by or arising under the Securities and this
Indenture; (iv) Interest Swap Obligations; provided, however, that such
Interest Swap Obligations are entered into to protect the Company from
fluctuations in interest rates of its Indebtedness; (v) additional Indebtedness
of the Company or any of its Subsidiaries not to exceed $20,000,000 in
principal amount outstanding at any time (which amount may, but need not, be
incurred under the Credit Agreement); (vi) Refinancing Indebtedness; (vii)
Indebtedness owed by the Company to any Wholly Owned Subsidiary of the Company
or by any Subsidiary of the Company to the Company or any Wholly Owned
Subsidiary of the Company; (viii) guarantees by the Company or Subsidiaries of
any Indebtedness permitted to be incurred pursuant to this Indenture; (ix)
Indebtedness in respect of performance bonds, bankers' acceptances and surety
or appeal bonds provided by the Company or any of its Subsidiaries to their
customers in the ordinary course of their business; (x) Indebtedness arising
from agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of the Company or any of its
Subsidiaries pursuant to such agreements, in each case incurred in connection
with the disposition of any business assets or Subsidiaries of the Company
(other than guarantees of Indebtedness or other obligations incurred by any
Person acquiring all or any portion of such business assets or Subsidiaries of
the Company for the purpose of financing such acquisition) in a principal
amount not to exceed the gross proceeds actually received by the Company or any
of its Subsidiaries in connection with such disposition; provided, however,
that the principal amount of any Indebtedness incurred pursuant to this clause
(x), when taken together with all Indebtedness incurred pursuant to this clause
(x) and then outstanding, shall not exceed $15,000,000; (xi) Indebtedness
represented by Capitalized Lease Obligations, mortgage financings or purchase
money obligations, in each case incurred for the purpose of financing all or
any part of the purchase price or cost of construction or improvement of
property used in a related business or incurred to refinance any such purchase
price or cost of construction or improvement, in each case incurred no later
than 365 days after the date of such acquisition or the date of completion of
such construction or improvement; provided, however, that the principal amount
of any Indebtedness incurred pursuant to this clause (xi) shall not exceed
$3,000,000 at any time outstanding; and (xii) Indebtedness and other
Obligations of the Company and its Subsidiaries related to lease financing
activities which are not required to be treated as indebtedness on a balance
sheet, as determined in accordance with generally accepted accounting
principles as in effect on the date such Indebtedness or other Obligation is
incurred.
"Permitted Investments" means (i) Investments by the Company or any
Subsidiary of the Company to acquire the stock or assets of any Person (or
Acquired Indebtedness or Acquired Preferred Stock acquired in connection with a
transaction in which such Person becomes a Subsidiary of the Company);
provided, however, that the primary business of such person is in the good
faith judgment of management of the Company a business reasonably related,
ancillary or complementary to the business of the Company; provided, further,
however, that if any such Investment or series of related Investments involves
an Investment by the Company in excess of $3,000,000, the Company is able, at
the time of such investment and immediately after giving effect thereto, to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.04, (ii) Investments received by the
Company or its Subsidiaries as consideration for a sale of assets, (iii)
Investments by the Company or any Wholly Owned Subsidiary of the Company in any
Wholly Owned Subsidiary of the Company (whether existing on the Issue Date or
created thereafter) or any
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Person that after such Investments, and as a result thereof, becomes a Wholly
Owned Subsidiary of the Company and Investments in the Company by any Wholly
Owned Subsidiary of the Company, (iv) Investments in cash and Cash Equivalents,
(v) Investments in securities of trade creditors, wholesalers or customers
received pursuant to any plan of reorganization or similar arrangement, (vi)
loans or advances to employees of the Company or any Subsidiary thereof for
purposes of purchasing the Company's Capital Stock and other loans and advances
to employees made in the ordinary course of business consistent with past
practices of the Company or such Subsidiary, and (vii) additional Investments
in an aggregate amount not to exceed $1,000,000 at any time outstanding.
"Person" means an individual, partnership, corporation, limited
liability company, unincorporated organization, trust or joint venture, or a
governmental agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities in
registered form.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"Private Exchange Securities" has the meaning provided in the
Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
Initial Securities in the form set forth on Exhibit A hereto.
"Productive Assets" means assets of a kind used or usable by the
Company and its Subsidiaries in its business; provided, however, that
productive assets to be acquired by the Company shall be, in the good faith
judgment of management of the Company, assets which are reasonably related,
ancillary or complementary to the business of the Company as conducted on the
Issue Date.
"Purchase Agreement" means the Purchase Agreement dated as of February
2, 1998 by and among the Company and the Initial Purchasers.
"Purchase Money Indebtedness" means Indebtedness of the Company and
its Subsidiaries incurred in the ordinary course of business for the purpose of
financing all or any part of the purchase price, or the cost of installation,
construction or improvement, of property or equipment.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
"Refinancing Indebtedness" means any refinancing of Indebtedness of
the Company or any of its Subsidiaries existing as of the Issue Date or
incurred in accordance with Section 4.04 (other than pursuant to clause (iii)
or (iv) of the definition of Permitted Indebtedness) that does not (i) result
in an increase in the aggregate principal amount of Indebtedness (such
principal amount to include, for purposes of this definition, any
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premiums, penalties or accrued interest paid with the proceeds of the
Refinancing Indebtedness) of such Person or (ii) create Indebtedness with (A) a
Weighted Average Life to Maturity that is less than the Weighted Average Life
to Maturity of the Indebtedness being refinanced or (B) a final maturity
earlier than the final maturity of the Indebtedness being refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement dated as of the Issue Date by and among the Company and the
Initial Purchasers.
"Registration" means a registered exchange offer for the Securities by
the Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee, agent
or representative in respect of any Senior Indebtedness; provided, however,
that if, and for so long as, any issue of Senior Indebtedness lacks such a
representative, then the Representative for such issue of Senior Indebtedness
shall at all times constitute the holders of a majority in outstanding
principal amount of such issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of any
dividend or the making of any other distribution (other than dividends or
distributions payable in Qualified Capital Stock or in options, rights or
warrants to acquire Qualified Capital Stock) on shares of the Company's Capital
Stock, (ii) the purchase, redemption, retirement or other acquisition for value
of any Capital Stock of the Company, or any warrants, rights or options to
acquire shares of Capital Stock of the Company, other than through the exchange
of such Capital Stock or any warrants, rights or options to acquire shares of
any class of such Capital Stock for Qualified Capital Stock or warrants, rights
or options to acquire Qualified Capital Stock, (iii) the making of any
principal payment on, or the purchase, defeasance, redemption, prepayment,
decrease or other acquisition or retirement for value, prior to any scheduled
final maturity, scheduled repayment or scheduled sinking fund payment, of, any
Indebtedness of the Company or its Subsidiaries that is subordinated or junior
in right of payment to the Securities or (iv) the making of any Investment
(other than a Permitted Investment).
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired whereby the Company or a Subsidiary transfers
such property to a Person and the Company or a Subsidiary leases it from such
Person.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien.
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"Securities" means, collectively, the Initial Securities, the Private
Exchange Securities and the Unrestricted Securities treated as a single class
of securities, as amended or supplemented from time to time in accordance with
the terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
"Senior Indebtedness" means, at any date, (x) all obligations under
the Credit Agreement (including, with respect to Designated Senior
Indebtedness, any interest accruing after the commencement of any proceeding
under any Bankruptcy Law at the rate specified in the applicable Designated
Senior Indebtedness whether or not such interest is an allowable claim
enforceable against the Company in any such proceeding) and (y) all other
Indebtedness of the Company, including interest (including, with respect to
Designated Senior Indebtedness, any interest accruing after the commencement of
any such proceeding at the rate specified in the applicable Designated Senior
Indebtedness whether or not such interest is an allowed claim enforceable
against the Company in any such proceeding) and premium, if any, thereon,
unless, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that the obligations in respect of such
Indebtedness are not superior in right of payment to the Securities; provided
however, that Senior Indebtedness will not include (1) any obligation of the
Company to any Subsidiary, (2) any liability for federal, state, foreign, local
or other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities) or
(4) any Indebtedness, guarantee or obligation of the Company that is expressly
subordinate or junior in right of payment to any other Indebtedness, guarantee
or obligation of the Company, including any Senior Subordinated Indebtedness.
"Senior Subordinated Indebtedness" means the Securities and any other
Indebtedness of the Company that specifically provides that such Indebtedness
is to rank pari passu with the Securities in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary," with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
shall at the time be owned, directly or indirectly through one or more
intermediaries, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, through one or more intermediaries, owned by such
Person. Notwithstanding anything in this Indenture to the contrary, all
references to the Company and its consolidated Subsidiaries or to financial
information prepared on a consolidated basis in accordance with GAAP shall be
deemed to include the Company and its Subsidiaries as to which financial
statements are prepared on a combined basis in accordance with GAAP and to
financial information prepared on such a combined basis. Notwithstanding
anything in this Indenture to the contrary, an Unrestricted Subsidiary shall
not be deemed to be a Subsidiary for purposes of this Indenture.
"Subsidiary Guarantees" means the Guarantee of the Securities by the
Guarantors under Article Eleven.
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"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except
as provided in Section 9.03) until such time as this Indenture is qualified
under the TIA, and thereafter as in effect on the date on which this Indenture
is qualified under the TIA.
"Triad Acquisition" means the acquisition of Triad Systems Corporation
on February 27, 1997.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice
president, assistant vice president, assistant secretary or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the persons who at that time shall be such officers, and
also means, with respect to a particular corporate trust matter, any other
officer to whom such trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.
"Unrestricted Securities" means one or more Securities that do not and
are not required to bear the Private Placement Legend in the form set forth in
Exhibit A hereto, including, without limitation, the Exchange Securities and
any Securities registered under the Securities Act pursuant to and in
accordance with the Registration Rights Agreement.
"Unrestricted Subsidiary" means a Subsidiary of the Company created
after the Issue Date and so designated (together with its Subsidiaries) by a
resolution adopted by the board of directors of the Company; provided, however,
that (a) neither the Company nor any of its other Subsidiaries (other than
Unrestricted Subsidiaries) (1) provides any credit support for any Indebtedness
of such Subsidiary or its Subsidiaries (including any undertaking, agreement or
instrument evidencing such Indebtedness) or (2) is directly or indirectly
liable for any Indebtedness of such Subsidiary or its Subsidiaries and (b)
except with respect to the designation described in the last sentence of this
definition at the time of designation of such Subsidiary, such Subsidiary and
its Subsidiaries has no property or assets (other than de minimis assets
resulting from the initial capitalization of such Subsidiary). The board of
directors may designate any Unrestricted Subsidiary to be a Subsidiary;
provided, however, that immediately after giving effect to such designation (x)
the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.04 and (y) no Default or Event of
Default shall have occurred or be continuing. Any designation pursuant to this
definition by the board of directors of the Company shall be evidenced to the
Trustee by the filing with the Trustee of a certified copy of the resolution of
the Company's board of directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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"Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than directors'
qualifying shares) which normally have the right to vote in the election of
directors are owned by such Person or any Wholly-Owned Subsidiary of such
Person.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" means the Company or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
(6) "herein," "hereof" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
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ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of authentication
thereof shall be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication thereof shall be
substantially in the form of Exhibit B hereto, which is hereby incorporated in
and expressly made a part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company and the Trustee shall approve the form of the Securities
and any notation, legend or endorsement (including the Security Guarantee) on
them. Each Security shall be dated the date of its issuance and shall show the
date of its authentication.
Securities offered and sold in reliance on Rule 144A and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A hereto, deposited with the Trustee, as custodian for the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided and shall bear the legend set forth in Exhibit C hereto. The
aggregate principal amount of the Global Securities may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided. Securities issued in
exchange for interests in a Global Security pursuant to Section 2.16 may be
issued in the form of Physical Securities in substantially the form set forth
in Exhibit A.
SECTION 2.02. Execution and Authentication.
Two Officers or an Officer and an Assistant Secretary shall sign, or
one Officer shall sign and one Officer and an Officer and an Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Securities for the Company by
manual or facsimile signature.
If an Officer or Assistant Secretary whose signature is on a Security
or a Subsidiary Guarantee, as the case may be, was an Officer or Assistant
Secretary at the time of such execution but no longer holds that office at the
time the Trustee authenticates the Security or Subsidiary Guarantee, as the
case may be, the Security or Subsidiary Guarantee, as the case may be, shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $100,000,000, (ii) Private
Exchange Securities from time to time only in exchange for a like principal
amount of Initial Securities and (iii) Unrestricted Securities from time to
time only in exchange for (A) a like principal amount of Initial Securities or
(B) a like principal amount of Private Exchange Securities, in each case upon a
written order of the Company in the form of an Officers' Certificate. Each
such written order shall specify the amount of Securities to be authenticated
and the date on which the Securities are to be authenticated, whether the
Securities are to be Initial Securities, Private Exchange Securities or
Unrestricted Securities and whether the Securities are to be issued as Physical
Securities or Global Securities and such other information as the Trustee may
reasonably request. The aggregate principal amount of Securities outstanding
at any time may not exceed $100,000,000, except as provided in Sections 2.07
and 2.08.
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Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency, which shall be in the
Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Securities may be presented or surrendered for payment (the
"Paying Agent") and (c) notices and demands in respect of the Securities and
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company, upon notice to the
Trustee, may appoint one or more co- Registrars and one or more additional
Paying Agents. The term "Paying Agent" includes any additional Paying Agent.
Except as provided herein, the Company may act as Paying Agent, Registrar or
co-Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 8.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee of
any Default by the Company in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee
and to account for any assets distributed. Upon distribution to the Trustee of
all assets that shall have been delivered by the Company to the Paying Agent
(if other than the Company), the Paying Agent shall have no further liability
for such assets. If the Company or any of their Affiliates acts as Paying
Agent, it shall, on or before each due date of the principal of or interest on
the Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal or interest so becoming
due until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure
so to act.
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SECTION 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall furnish to
the Trustee before each Interest Record Date and at such other times as the
Trustee may request in writing a list as of such date and in such form as the
Trustee may reasonably require of the names and addresses of Holders, which
list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co- Registrar with a request to register
the transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax or similar governmental charge payable in connection
therewith (other than any such transfer taxes or other governmental charge
payable upon exchanges or transfers pursuant to Section 2.10 or 3.06). The
Registrar or co-Registrar shall not be required to register the transfer or
exchange of any Security (i) during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of Securities and
ending at the close of business on the day of such mailing and (ii) selected
for redemption in whole or in part pursuant to Article Three hereof, except the
unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and none of the Company,
the Trustee nor any such Agent shall be affected by notice to the contrary.
Any consent, waiver or actions of a Holder shall be binding upon any subsequent
Holders of such Security or a Security received upon transfer. Any Holder of a
beneficial interest in a Global Security shall, by acceptance of such
beneficial interest in a Global Security, agree that transfers of beneficial
interests in such Global Security may be effected only through a book-entry
system maintained by the Depository (or its agent), and that ownership of a
beneficial interest in a Global Security shall be required to be reflected in a
book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements for replacement of Securities are met.
If required by the Company or the Trustee, such Holder must provide an
indemnity bond or other indemnity, sufficient in the judgment of the Company
and the Trustee, to protect the Company, the Trustee and any Agent from any
loss which any of them may suffer if a Security is replaced. The Company may
charge such Holder for their reasonable out-of-pocket expenses in replacing a
Security, including reasonable fees and expenses of counsel.
Every replacement Security is an additional obligation of the Company.
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SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any Affiliates of the Company holds the
Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser. A mutilated Security ceases to be
outstanding upon surrender of such Security and replacement thereof pursuant to
Section 2.07.
If on a Redemption Date or the Final Maturity Date the Paying Agent
holds money sufficient to pay all of the principal and interest due on the
Securities payable on that date, and is not prohibited from paying such money
to the Holders pursuant to the terms of this Indenture, then on and after that
date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantors or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer of the Trustee actually knows are so owned
shall be disregarded.
The Company shall notify the Trustee, in writing, when the Company or
any of its Affiliates repurchases or otherwise acquires Securities, of the
aggregate principal amount of such Securities so repurchased or otherwise
acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate upon receipt of a written order of the
Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of all Securities surrendered
for transfer, exchange, payment or cancellation. Subject to Section 2.07, the
Company may not issue new Securities to replace Securities that they have paid
or delivered to the Trustee for cancellation. If the Company shall acquire any
of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and
until the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
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SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and
interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(i) shall be paid to
Holders as of the Interest Record Date for the Interest Payment Date for which
interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as
a convenience to Holders; provided, however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Securities, and that reliance may be
placed only on the other identification numbers printed on the Securities. The
Company shall promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 11 a.m. New York City time on each Interest Payment Date,
Redemption Date, and the Final Maturity Date, the Company shall deposit with
the Paying Agent in immediately available funds money sufficient to make cash
payments, if any, due on such Interest Payment Date, Redemption Date or Final
Maturity Date, as the case may be, in a timely manner which permits the Paying
Agent to remit payment to the Holders on such Interest Payment Date, Redemption
Date or Final Maturity Date, as the case may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C.
Members of, or participants in, the Depository ("Participants") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or
the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise
of the rights of a Holder of any Security.
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(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to
be issued) 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 Physical Securities of like tenor and amount.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial
owner identified by the Depository in exchange for its beneficial interest in
the Global Securities, an equal aggregate principal amount of Physical
Securities of authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to
paragraph (c) of this Section 2.15 shall, except as otherwise provided by
Section 2.16, bear the Private Placement Legend.
(f) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal
principal amount of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if the requirements under this Indenture as set forth in
this Section 2.16 for such transactions are met; provided, however, that the
Physical Securities presented or surrendered for registration of transfer or
exchange:
(I) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing; and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical Securities
shall be accompanied, in the sole discretion of the Company, by the following
additional information and documents, as applicable:
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(A) if such Physical Security is being delivered to the Registrar
or co-Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such Holder
to that effect (substantially in the form of Exhibit D hereto);
or
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification
to that effect (substantially in the form of Exhibit D hereto)
and a transferee letter of representation (substantially in the
form of Exhibit E hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act; or
(D) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a
transferor certificate for Regulation S transfers substantially
in the form of Exhibit F hereto and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification
to that effect (substantially in the form of Exhibit D hereto)
and, at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(F) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably acceptable to the
Company to the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of
a Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D hereto,
that such Physical Security is being transferred (I) to a QIB,
(II) to an Accredited Investor or (III) in an offshore
transaction in reliance on Regulation S and, with respect to
(II) or (III), at the option of the Company, an Opinion of
Counsel reasonably acceptable to the Company to the effect that
such transfer is in compliance with the Securities Act; and
(B) written instructions directing the Registrar or co-Registrar
to make, or to direct the Depository to make, an endorsement on
the applicable Global Security to reflect an increase in the
aggregate amount of the Securities represented by the Global
Security,
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then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar
or co-Registrar, the principal amount of Securities represented by the
applicable Global Security to be increased accordingly. If no 144A Global
Security, IAI Global Security or Regulation S Global Security, as the case may
be, is then outstanding, the Company shall, unless either of the events in the
proviso to Section 2.15(b) have occurred and are continuing, issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate such a Global Security in the appropriate principal
amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co- Registrar of written
instructions, or such other instruction as is customary for the Depository,
from the Depository or its nominee, requesting the registration of transfer of
an interest in a 144A Global Security, an IAI Global Security or a Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security representing the interest
being transferred), the Registrar or Co-Registrar shall reflect on its books
and records (and the applicable Global Security) the applicable increase and
decrease of the principal amount of Securities represented by such types of
Global Securities, giving effect to such transfer. If the applicable type of
Global Security required to represent the interest as requested to be obtained
is not outstanding at the time of such request, the Company shall issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate a new Global Security of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global
Security may upon request exchange such beneficial interest for a Physical
Security; provided, however, that prior to the Registration, a transferee that
is a QIB or Institutional Accredited Investor may not exchange a beneficial
interest in Global Security for a Physical Security. Upon receipt by the
Registrar or co-Registrar of written instructions, or such other form of
instructions as is customary for the Depository, from the Depository or its
nominee on behalf of any Person having a beneficial interest in a Global
Security and upon receipt by the Trustee of a written order or such other form
of instructions as is customary for the Depository or the Person designated by
the Depository as having such a beneficial interest containing registration
instructions and, in the case of any such transfer or exchange of a beneficial
interest in Securities the offer and sale of which have not been registered
under the Securities Act, the following additional information and documents:
(A) if such beneficial interest is being transferred in reliance
on Rule 144 under the Securities Act, delivery of a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(B) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially
in the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Registrar or co-Registrar, the aggregate principal amount of the
applicable Global Security to be reduced and, following such reduction, the
Company will execute and, upon receipt of an authentication order in the
form of an Officers' Certificate in accordance with Section 2.02, the
Trustee will authenticate and deliver to the transferee a Physical Security
in the appropriate principal amount.
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(ii) Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Registrar or co-Registrar in writing. The
Registrar or co-Registrar shall deliver such Physical Securities to the
Persons in whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of Securities
bearing the Private Placement Legend, the Registrar or co-Registrar shall
deliver only Securities that bear the Private Placement Legend unless, and the
Trustee is hereby authorized to deliver Securities without the Private
Placement Legend if, (i) there is delivered to the Trustee an Opinion of
Counsel reasonably satisfactory to the Company and the Trustee to the effect
that neither such legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the Securities Act; (ii)
such Security has been sold pursuant to an effective registration statement
under the Securities Act (including pursuant to a Registration); or (iii) the
date of such transfer, exchange or replacement is two years after the later of
(x) the Issue Date and (y) the last date that the Company or any affiliate (as
defined in Rule 144 under the Securities Act) of the Company was the owner of
such Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon
the giving of reasonable written notice to the Registrar.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company elects to redeem Securities pursuant to paragraph 5 of
the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the Redemption Date and the principal amount
of Securities to be redeemed. The Company shall give such notice to the
Trustee at least 45 days before the Redemption Date (unless a shorter notice
shall be agreed to by the Trustee in writing), together with an Officers'
Certificate stating that such redemption will comply with the conditions
contained herein and in the Securities, the Redemption Date, the redemption
price and the principal amount of the Securities to be redeemed. Any such
notice may be canceled by notice in accordance with Section 13.02 at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the national securities
exchange, if any, on which the Securities are listed or, if the Securities are
not then listed on a national securities exchange, on a pro rata basis;
provided, however, that no Securities of $1,000 or less shall be redeemed in
part. On and after the Redemption Date, interest shall cease to accrue on the
Securities or portions thereof called for redemption, whether or not such
Securities are presented for payment.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each
Holder whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 5(b) of
the Securities shall be mailed to each Holder whose Securities are to be
redeemed no later than 60 days after the date of the closing of the relevant
Equity Offering of the Company.
Each notice of redemption shall identify the Securities to be redeemed
(including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(5) that, as long as the Company has deposited with the
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to this Indenture, interest on Securities called for redemption ceases to
accrue on and after the Redemption Date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to the
Paying Agent;
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(6) in the case of any redemption pursuant to paragraph 5
of the Securities, if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security or Securities
in principal amount equal to the unredeemed portion thereof will be issued;
(7) the subparagraph of the Securities pursuant to which
such redemption is being made; and
(8) that no representation is made as to the accuracy of
the CUSIP number listed in such notice or printed on such Security.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at
the redemption price, plus accrued interest thereon, if any, to the Redemption
Date, but interest installments whose maturity is on or prior to such
Redemption Date shall be payable to the Holders of record at the close of
business on the relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with the
Paying Agent (or if the Company is its own Paying Agent, it shall, on or before
the Redemption Date, segregate and hold in trust) money sufficient to pay the
redemption price of and accrued interest, if any, on all Securities to be
redeemed on that date other than Securities or portions thereof called for
redemption on that date which have been delivered by the Company to the Trustee
for cancellation.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure
of the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if
any, thereon shall, until paid or duly provided for, bear interest as provided
in Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities. An installment of principal or
interest shall be considered paid on the date due if the Trustee or Paying
Agent (other than the Company or any Affiliates of the Company) holds on that
date money designated for and sufficient to pay the installment in full and is
not prohibited from paying such money to the Holders of the Securities pursuant
to the terms of this Indenture.
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The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
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, premium or interest payments hereunder.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of any office or agency required by
Section 2.03. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 13.
SECTION 4.03. Limitations on Transactions with Affiliates.
Neither the Company nor any of its Subsidiaries will, directly or
indirectly, enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease or exchange of any property or the
rendering of any service) with or for the benefit of any of its Affiliates
(other than transactions between the Company and a Wholly Owned Subsidiary of
the Company or among Wholly Owned Subsidiaries of the Company) (an "Affiliate
Transaction"), other than Affiliate Transactions on terms that are no less
favorable than those that might reasonably have been obtained in a comparable
transaction on an arm's-length basis from a person that is not an Affiliate;
provided, however, that for a transaction or series of related transactions
involving value of $5,000,000 or more, such determination will be made in good
faith by a majority of members of the board of directors of the Company and by
a majority of the disinterested members of the board of directors of the
Company, if any; provided, further, that for a transaction or series of related
transactions involving value of $15,000,000 or more, the board of directors of
the Company has received an opinion from a nationally recognized investment
banking firm that such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Subsidiary. The foregoing restrictions will not
apply to (1) reasonable and customary directors' fees, indemnification and
similar arrangements and payments thereunder, (2) any obligations of the
Company under the Financial Monitoring and Oversight Agreements, the Corporate
Leases or any employment agreement, noncompetition or confidentiality agreement
with any officer of the Company (provided that each amendment of any of the
foregoing agreements shall be subject to the limitations of this covenant), (3)
reasonable and customary investment banking, financial advisory, commercial
banking and similar fees and expenses paid to any of the Initial Purchasers and
their Affiliates, (4) any Restricted Payment permitted to be made pursuant to
Section 4.10, (5) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans approved by
the board of directors of the Company, (6) loans or advances to employees in
the ordinary course of business of the Company or any of its Subsidiaries
consistent with past practices, and (7) the issuance of Capital Stock of the
Company (other than Disqualified Stock).
SECTION 4.04. Limitation on Incurrence of Additional Indebtedness and
Issuance of Disqualified Capital Stock.
(a) The Company will not, and will not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume, Guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (other than Permitted Indebtedness)
and the Company
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will not issue any Disqualified Capital Stock and will not permit its
Subsidiaries to issue any Preferred Stock except Preferred Stock of a
Subsidiary issued to (and as long as it is held by) the Company or a
Wholly-Owned Subsidiary of the Company; provided, however, that the Company and
its Subsidiaries may incur Indebtedness or issue shares of such Capital Stock
if, in either case, at the time of and immediately after giving pro forma
effect to such incurrence of Indebtedness or the issuance of such Capital
Stock, as the case may be, and the use of proceeds therefrom, the Company's
Consolidated Coverage Ratio is greater than 2.00 to 1.00.
(b) In addition, the Company will not incur any Secured
Indebtedness (other than Senior Indebtedness) unless contemporaneously
therewith effective provision is made to secure the Securities equally and
ratably with such Secured Indebtedness for so long as such Secured Indebtedness
is secured by a Lien.
(c) The Company will not incur or suffer to exist, or permit any
of its Subsidiaries to incur or suffer to exist, any Obligations with respect
to an Unrestricted Subsidiary that would violate the provisions set forth in
the definition of Unrestricted Subsidiary.
SECTION 4.05. Limitation on Layering.
The Company will not incur any Indebtedness if such Indebtedness is
subordinate or junior in ranking in any respect to any Senior Indebtedness
unless such Indebtedness is Senior Subordinated Indebtedness or is
contractually subordinated in right of payment to all Senior Subordinated
Indebtedness (including the Securities).
SECTION 4.06. Payments for Consents.
Neither the Company nor any of its Subsidiaries will, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Securities for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of 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 agreement.
SECTION 4.07. Limitation on Investment Company Status.
The Company and its Subsidiaries shall not take any action, or
otherwise permit to exist any circumstance, that would require the Company to
register as an "investment company" under the Investment Company Act of 1940,
as amended.
SECTION 4.08. Limitation on Asset Sales.
Neither the Company nor any of its Subsidiaries will consummate an
Asset Sale unless (i) the Company or the applicable Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined in
good faith by management of the Company or, if such Asset Sale involves
consideration in excess of $5,000,000, by the board of directors of the
Company, as evidenced by a board resolution), (ii) at least 75% of the
consideration received by the Company or such Subsidiary, as the case may be,
from such Asset Sale is in the form of cash or Cash Equivalents and is received
at the time of such disposition and (iii) upon the consummation of an Asset
Sale, the Company applies, or causes such Subsidiary to apply, such Net Cash
Proceeds within 180 days of receipt thereof either (A) to repay any Senior
Indebtedness of the Company or any Indebtedness of a Subsidiary of the Company
(and, to the extent such Senior Indebtedness relates to principal under a
revolving credit or similar facility, to obtain a corresponding reduction in
the commitments thereunder, except that the Company may temporarily repay
Senior Indebtedness using the consideration from such Asset Sale and thereafter
use such funds to reinvest pursuant to clause (B) below within the period set
forth therein without having to obtain a corresponding
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reduction in the commitments under such revolving credit or similar facility),
(B) to reinvest, or to be contractually committed to reinvest pursuant to a
binding agreement, in Productive Assets and, in the latter case, to have so
reinvested within 360 days of the date of receipt of such Net Cash Proceeds or
(C) to purchase Securities and other Senior Subordinated Indebtedness, pro rata
tendered to the Company for purchase at a price equal to 100% of the principal
amount thereof (or the accreted value of such other Senior Subordinated
Indebtedness, if such other Senior Subordinated Indebtedness is issued at a
discount) plus accrued interest thereon, if any, to the date of purchase
pursuant to an offer to purchase made by the Company as set forth below (a "Net
Proceeds Offer"); provided, however, that the Company may defer making a Net
Proceeds Offer until the aggregate Net Cash Proceeds from Asset Sales not
otherwise applied in accordance with this covenant equal or exceed $5,000,000.
Subject to the deferral right set forth in the final proviso of the
preceding paragraph, each notice of a Net Proceeds Offer will be mailed, by
first-class mail, to holders of Securities not more than 180 days after the
relevant Asset Sale or, in the event the Company or a Subsidiary has entered
into a binding agreement as provided in (B) above, within 180 days following
the termination of such agreement but in no event later than 360 days after the
relevant Asset Sale. Such notice will specify, among other things, the purchase
date (which will be no earlier than 30 days nor later than 45 days from the
date such notice is mailed, except as otherwise required by law) and will
otherwise comply with the procedures set forth in this Indenture. Upon
receiving notice of the Net Proceeds Offer, holders of Securities may elect to
tender their Securities in whole or in part in integral multiples of $1,000. To
the extent holders properly tender Securities in an amount which, together with
all other Senior Subordinated Indebtedness so tendered, exceeds the Net
Proceeds Offer, Securities and other Senior Subordinated Indebtedness of
tendering holders will be repurchased on a pro rata basis (based upon the
aggregate principal amount tendered). To the extent that the aggregate
principal amount of Securities tendered pursuant to any Net Proceeds Offer,
which, together with the aggregate principal amount or aggregate accreted
value, as the case may be, of all other Senior Subordinated Indebtedness so
tendered, is less than the amount of Net Cash Proceeds subject to such Net
Proceeds Offer, the Company may use any remaining portion of such Net Cash
Proceeds not required to fund the repurchase of tendered Securities and other
Senior Subordinated Indebtedness for any purposes otherwise permitted by this
Indenture. Upon the consummation of any Net Proceeds Offer, the amount of Net
Cash Proceeds subject to any future Net Proceeds Offer from the Asset Sales
giving rise to such Net Cash Proceeds shall be deemed to be zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act to the extent applicable in connection with the repurchase of
Securities pursuant to a Net Proceeds Offer.
SECTION 4.09. Limitation on Asset Swaps.
The Company will not, and will not permit any Subsidiary to, engage in
any Asset Swaps, unless: (i) at the time of entering into such Asset Swap, and
immediately after giving effect to such Asset Swap, no Default or Event of
Default shall have occurred and be continuing or would occur as a consequence
thereof; (ii) in the event such Asset Swap involves an aggregate amount in
excess of $2.0 million, the terms of such Asset Swap have been approved by a
majority of the members of the board of directors of the Company which
determination shall include a determination that the fair market value of the
assets being received in such swap are at least equal to the fair market value
of the assets being swapped and (iii) in the event such Asset Swap involves an
aggregate amount in excess of $10.0 million, the Company has also received a
written opinion from an independent investment banking firm of nationally
recognized standing that such Asset Swap is fair to the Company or such
Subsidiary, as the case may be, from a financial point of view.
SECTION 4.10. Limitation on Restricted Payments.
(a) Neither the Company nor any of its Subsidiaries will, directly or
indirectly, make any Restricted Payment if at the time of such Restricted
Payment and immediately after giving effect thereto:
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(i) a Default or Event of Default shall have occurred and
be continuing at the time of or after giving effect to such Restricted
Payment; or
(ii) the Company is not able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.04; or
(iii) the aggregate amount of Restricted Payments made
subsequent to the Issue Date (the amount expended for such purposes,
if other than in cash, being the fair market value of such property as
determined by the board of directors of the Company in good faith)
exceeds the sum of (a) 50% of Consolidated Net Income (or, in the case
such Consolidated Net Income shall be a deficit, minus 100% of such
deficit) accruing during the period (treated as one accounting period)
from the Issue Date to the end of the most recent fiscal quarter
ending prior to the date of such Restricted Payment as to which
financial results are available plus (b) 100% of the aggregate net
proceeds, including the fair market value of property other than cash
as determined by the board of directors of the Company in good faith,
received subsequent to the Issue Date by the Company from any Person
(other than a Subsidiary of the Company) from the issuance and sale
subsequent to the Issue Date of Qualified Capital Stock of the Company
(excluding (i) any net proceeds from issuances and sales financed
directly or indirectly using funds borrowed from the Company or any
Subsidiary of the Company, until and to the extent such borrowing is
repaid, but including the proceeds from the issuance and sale of any
securities convertible into or exchangeable for Qualified Capital
Stock to the extent such securities are so converted or exchanged and
including any additional proceeds received by the Company upon such
conversion or exchange and (ii) any net proceeds received from
issuances and sales that are used to consummate a transaction
described in clauses (2) and (3) of paragraph (b) below), plus (c)
without duplication of any amount included in clause (iii)(b) above,
100% of the aggregate net proceeds, including the fair market value of
property other than cash (valued as provided in clause (iii)(b)
above), received by the Company as a capital contribution after the
Issue Date, plus (d) the amount equal to the net reduction in
Investments (other than Permitted Investments) made by the Company or
any of its Subsidiaries in any Person resulting from (i) repurchases
or redemptions of such Investments by such Person, proceeds realized
upon the sale of such Investment to an unaffiliated purchaser and
repayments of loans or advances or other transfers of assets by such
Person to the Company or any Subsidiary of the Company or (ii) the
redesignation of Unrestricted Subsidiaries as Subsidiaries (valued in
each case as provided in the definition of "Investment") not to
exceed, in the case of any Subsidiary, the amount of Investments
previously made by the Company or any Subsidiary in such Unrestricted
Subsidiary, which amount was included in the calculation of Restricted
Payments; provided, however, that no amount shall be included under
this clause (d) to the extent it is already included in Consolidated
Net Income, plus (e) the aggregate net cash proceeds received by a
Person in consideration for the issuance of such Person's Capital
Stock (other than Disqualified Capital Stock) that are held by such
Person at the time such Person is merged with and into the Company in
accordance with Article Five hereof on or subsequent to the Issue
Date; provided, however, that concurrently with or immediately
following such merger the Company uses an amount equal to such net
cash proceeds to redeem or repurchase the Company's Capital Stock,
plus (f) $5,000,000.
(b) Notwithstanding the foregoing, these provisions will not
prohibit: (1) the payment of any dividend or the making of any distribution
within 60 days after the date of its declaration if such dividend or
distribution would have been permitted on the date of declaration; (2) the
purchase, redemption or other acquisition or retirement of any Capital Stock of
the Company or any warrants, options or other rights to acquire shares of any
class of such Capital Stock either (x) solely in exchange for shares of
Qualified Capital Stock or other rights to acquire Qualified Capital Stock or
(y) through the application of the net proceeds of a substantially concurrent
sale for cash (other than to a Subsidiary of the Company) of shares of
Qualified Capital Stock or warrants, options or other rights to acquire
Qualified Capital Stock or (z) in the case of Disqualified Capital Stock,
solely in exchange for, or through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of, Disqualified Capital Stock that has a redemption date no earlier
than, and requires the payment of current dividends or distributions in cash no
earlier than, in each case, the Disqualified Capital Stock being purchased,
redeemed or otherwise acquired or retired; (3) the acquisition of Indebtedness
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of the Company that is subordinate or junior in right of payment to the
Securities either (x) solely in exchange for shares of Qualified Capital Stock
(or warrants, options or other rights to acquire Qualified Capital Stock), for
shares of Disqualified Capital Stock that have a redemption date no earlier
than, and require the payment of current dividends or distributions in cash no
earlier than, in each case, the maturity date and interest payments dates,
respectively, of the Indebtedness being acquired, or for Indebtedness of the
Company that is subordinate or junior in right of payment to the Securities, at
least to the extent that the Indebtedness being acquired is subordinated to the
Securities and has a Weighted Average Life to Maturity no less than that of the
Indebtedness being acquired or (y) through the application of the net proceeds
of a substantially concurrent sale for cash (other than to a Subsidiary of the
Company) of shares of Qualified Capital Stock (or warrants, options or other
rights to acquire Qualified Capital Stock), shares of Disqualified Capital
Stock that have a redemption date no earlier than, and require the payment of
current dividends or distributions in cash no earlier than, in each case, the
maturity date and interest payments dates, respectively, of the Indebtedness
being refinanced, or Indebtedness of the Company that is subordinate or junior
in right of payment to the Securities at least to the extent that the
Indebtedness being acquired is subordinated to the Securities and has a
Weighted Average Life to Maturity no less than that of the Indebtedness being
refinanced; (4) payments by the Company to repurchase or to enable Holding
(including for the purpose of this clause (4) and for the purposes of clauses
(5) and (6) below, any corporation that, directly or indirectly, owns all of
the Common Stock of Holding) to repurchase, Capital Stock of Holding from
employees of Holding or its Subsidiaries or such other Corporation in an
aggregate amount not to exceed $5,000,000; (5) payments to enable Holding to
redeem or repurchase stock purchase or similar rights granted by Holding with
respect to its Capital Stock in an aggregate amount not to exceed $1,000,000;
(6) payments, not to exceed $200,000 in the aggregate, to enable Holding to
make cash payments to holders of its Capital Stock in lieu of the issuance of
fractional shares of its Capital Stock; (7) payments made pursuant to any
merger, consolidation or sale of assets effected in accordance with Article
Five hereof; provided, however, that no such payment may be made pursuant to
this clause (7) unless, after giving effect to such transaction (and the
incurrence of any Indebtedness in connection therewith and the use of the
proceeds thereof), the Company would be able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.04 such that after incurring that $1.00 of additional Indebtedness, the
Consolidated Coverage Ratio would be greater than 2.00 to 1.00; (8) payments to
enable Holding or the Company to pay dividends on its Capital Stock (other than
Disqualified Capital Stock) after the first Equity Offering in an annual amount
not to exceed 6.00% of the gross proceeds (before deducting underwriting
discounts and commissions and other fees and expenses of the offering) received
from shares of Capital Stock (other than Disqualified Stock) sold for the
account of the issuer thereof (and not for the account of any stockholder) in
such initial Equity Offering and contributed to the Company, (9) payments by
the Company to fund the payment by any direct or indirect holding company
thereof of audit, accounting, legal or other similar expenses, to pay franchise
or other similar taxes and to pay other corporate overhead expenses, so long as
such dividends are paid as and when needed by its respective direct or indirect
holding company and so long as the aggregate amount of payments pursuant to
this clause (9) does not exceed $1,000,000 in any calendar year; (10) payments
by the Company to fund taxes of Holding for a given taxable year in an amount
equal to the Company's "separate return liability," as if the Company were the
parent of a consolidated group (for purposes of this clause (iv) "separate
return liability" for a given taxable year shall mean the hypothetical United
States tax liability of the Company defined as if the Company had filed its own
United States federal tax return for such taxable year) and (11) payments by
the Company under the Financial Monitoring and Oversight Agreements or the
Corporate Leases; provided, however, that in the case of clauses (3), (4), (5),
(6), (7) and (8), no Event of Default shall have occurred or be continuing at
the time of such payment or as a result thereof. In determining the aggregate
amount of Restricted Payments made subsequent to the Issue Date, amounts
expended pursuant to clauses (1), (4), (5), (6), (7) and (8) shall be included
in such calculation.
SECTION 4.11. Notice of Defaults.
Upon becoming aware of any Default or Event of Default, the Company
shall promptly deliver an Officers' Certificate to the Trustee specifying the
Default or Event of Default and if any Holder seeks to exercise any remedy
hereunder with respect to a claimed Default under this Indenture or the
Securities, the Company shall promptly deliver to the Trustee by registered or
certified mail or by telegram, telex or certified mail an Officers' Certificate
specifying such event, notice or other action.
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SECTION 4.12. Reports.
So long as any of the Securities are outstanding, the Company will
provide to the holders of Securities and file with the Commission, to the
extent such submissions are accepted for filing by the Commission, copies of
the annual reports and of the information, documents and other reports that the
Company would have been required to file with the Commission pursuant to
Sections 13 or 15(d) of the Exchange Act regardless of whether the Company is
then obligated to file such reports, commencing for the period ended March 31,
1998; provided that the Company will provide to the holders of the Securities a
consolidated balance sheet, statement of operations and a statement of cash
flows for the period ended December 31, 1997 and related management discussion
and analysis no later than February 27, 1998.
SECTION 4.13. Limitations on Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create or otherwise cause to permit to exist or become
effective, by operation of the charter of such Subsidiary or by reason of any
agreement, instrument, judgment, decree, rule, order, statute or governmental
regulation, any encumbrance or restriction on the ability of any Subsidiary to
(a) pay dividends or make any other distributions on its Capital Stock; (b)
make loans or advances or pay any Indebtedness or other obligation owed to the
Company or any of its Subsidiaries; or (c) transfer any of its property or
assets to the Company, except for such encumbrances or restrictions existing
under or by reason of: (1) applicable law; (2) this Indenture; (3) customary
non-assignment provisions of any lease governing a leasehold interest of the
Company or any Subsidiary; (4) any instrument governing Acquired Indebtedness
or Acquired Preferred Stock, which encumbrance or restriction is not applicable
to any Person, or the properties or assets of any Person, other than the
Person, or the property or assets of the Person, so acquired; (5) agreements
existing on the Issue Date (including the Credit Agreement) as such agreements
are from time to time in effect; provided, however, that any amendments or
modifications of such agreements that affect the encumbrances or restrictions
of the types subject to this covenant shall not result in such encumbrances or
restrictions being less favorable to the Company in any material respect, as
determined in good faith by the board of directors of the Company, than the
provisions as in effect before giving effect to the respective amendment or
modification; (6) any restriction with respect to such a Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Subsidiary pending the
closing of such sale or disposition; (7) an agreement effecting a refinancing,
replacement or substitution of Indebtedness issued, assumed or incurred
pursuant to an agreement referred to in clause (2), (4) or (5) above or any
other agreement evidencing Indebtedness permitted under this Indenture;
provided, however, that the provisions relating to such encumbrance or
restriction contained in any such refinancing, replacement or substitution
agreement or any such other agreement are no less favorable to the Company in
any material respect as determined in good faith by the board of directors of
the Company than the provisions relating to such encumbrance or restriction
contained in agreements referred to in such clause (2), (4) or (5); (8)
restrictions on the transfer of the assets subject to any Lien imposed by the
holder of such Lien; (9) a licensing agreement to the extent such restrictions
or encumbrances limit the transfer of property subject to such licensing
agreement; (10) restrictions relating to Subsidiary preferred stock that
require that due and payable dividends thereon to be paid in full prior to
dividends on such Subsidiary's common stock or (11) any agreement or charter
provision evidencing Indebtedness or Capital Stock permitted under this
Indenture; provided, however, that the provisions relating to such encumbrance
or restriction contained in such agreement or charter provision are not less
favorable to the Company in any material respect as determined in good faith by
the board of directors of the Company than the provisions relating to such
encumbrance or restriction contained in this Indenture.
SECTION 4.14. Restriction on Transfer of Assets to Subsidiaries; Additional
Subsidiary Guarantees.
If, at any time, (x) more than 20% of the Company's consolidated total
assets are owned by Subsidiaries of the Company or (y) more than 20% of the
Company's Consolidated EBITDA is derived from Subsidiaries of the Company, the
Company shall cause such Subsidiaries to (i) execute and deliver to the Trustee
a supplemental indenture in form reasonably satisfactory to the Trustee
pursuant to which such Subsidiaries
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shall unconditionally guarantee, on a senior subordinated basis, all the
Company's obligations under the Securities and (ii) deliver to the Trustee an
Opinion of Counsel that such supplemental indenture has been duly executed and
delivered by such Subsidiaries; provided that if no Default or Event of Default
shall have occurred or be continuing, and neither condition (x) or (y) is then
met, such guarantees will automatically, with no action required on behalf of
the Company or its Subsidiaries, be released; provided, however, that the
provisions contained herein shall not apply to Subsidiaries of the Company
organized outside of the United States.
SECTION 4.15. Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will have
the right to require that the Company purchase all or a portion of such
Holder's Securities in cash pursuant to the offer described below (the "Change
of Control Offer"), at a purchase price equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of purchase.
(b) Prior to the mailing of the notice referred to below, but in any
event within 30 days following the date on which the Company becomes aware that
a Change of Control has occurred, the Company covenants that if the purchase of
the Securities would violate or constitute a default under any other
Indebtedness of the Company, then the Company shall, to the extent needed to
permit such purchase of Securities, either (i) repay all such Indebtedness and
terminate all commitments outstanding thereunder or (ii) obtain the requisite
consents, if any, under any such Indebtedness required to permit the purchase
of the Securities as provided below. The Company will first comply with the
covenant in the preceding sentence before it will be required to make the
Change of Control Offer or purchase the Securities pursuant to the provisions
described below.
(c) Within 30 days following the date on which the Company becomes
aware that a Change of Control has occurred (the "Change of Control Date"), the
Company shall send, by first class mail, postage prepaid, a notice to each
Holder of Securities, which notice shall govern the terms of the Change of
Control Offer. The notice to the Holders shall contain all instructions and
materials necessary to enable such Holders to tender Securities pursuant to the
Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Securities validly tendered and not withdrawn will be
accepted for payment;
(2) the purchase price (including the amount of accrued interest, if
any) and the purchase date (which shall be no earlier than 30 days nor later
than 45 days from the date such notice is mailed, other than as may be required
by law) (the "Change of Control Payment Date");
(3) that any Security not tendered will continue to accrue interest;
(4) that, unless the Company defaults in making payment therefor, any
Security accepted for payment pursuant to the Change of Control Offer shall
cease to accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have a Security purchased pursuant to a
Change of Control Offer will be required to surrender the Security, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Security completed, to the Paying Agent and Registrar for the Securities at the
address specified in the notice prior to the close of business on the Business
Day prior to the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the Securities
the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Security purchased;
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(7) that Holders whose Securities are purchased only in part will be
issued new Securities in a principal amount equal to the unpurchased portion of
the Securities surrendered; provided, however, that each Security purchased and
each new Security issued shall be in a principal amount of $1,000 or integral
multiples thereof; and
(8) the circumstances and relevant facts regarding such Change of
Control.
(d) On or before the Change of Control Payment Date, the Company
shall (i) accept for payment Securities or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent in accordance with Section 2.14 U.S. Legal
Tender sufficient to pay the purchase price plus accrued and unpaid interest,
if any, of all Securities so tendered and (iii) deliver to the Trustee
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof being purchased by the Company. Upon receipt by
the Paying Agent of the monies specified in clause (ii) above and a copy of the
Officers' Certificate specified in clause (iii) above, the Paying Agent shall
promptly mail to the Holders of Securities so accepted payment in an amount
equal to the purchase price plus accrued and unpaid interest, if any, out of
the funds deposited with the Paying Agent in accordance with the preceding
sentence. The Trustee shall promptly authenticate and mail to such Holders new
Securities equal in principal amount to any unpurchased portion of the
Securities surrendered. Upon the payment of the purchase price for the
Securities accepted for purchase, the Trustee shall return the Securities
purchased to the Company for cancellation. Any monies remaining after the
purchase of Securities pursuant to a Change of Control Offer shall be returned
within three Business Days by the Trustee to the Company except with respect to
monies owed as obligations to the Trustee pursuant to Article Eight. For
purposes of this Section 4.15, the Trustee shall, except with respect to monies
owed as obligations to the Trustee pursuant to Article Eight, act as the Paying
Agent.
(e) The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other notes laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of the Securities pursuant to a Change of Control Offer. To the extent the
provisions of any such rule conflict with the provisions of this Indenture
relating to a Change of Control Offer, the Company shall comply with the
provisions of such rule and be deemed not to have breached its obligations
relating to such Change of Control Offer by virtue thereof.
(f) Paragraphs (a)-(e) of this Section 4.15 notwithstanding, the
Company shall not be required to make a Change of Control Offer if, instead,
the Company elects to effect a Change of Control Redemption in compliance with
the requirements listed on the Securities in Exhibit A and Exhibit B hereof.
SECTION 4.16. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officer with a view to determining whether a Default
or Event of Default has occurred and whether or not the signets know of any
failure of the Company to comply with any of its obligations under this
Indenture or any Default or Event of Default by the Company that occurred
during such fiscal year. If they do know of such a Default or Event of
Default, their status and the action the Company is taking or proposes to take
with respect thereto. The first certificate to be delivered by the Company
pursuant to this Section 4.16 shall be for the fiscal year ending September 30,
1998.
SECTION 4.17. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Subsidiary in accordance with the respective organizational documents of each
such Subsidiary and the
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rights (charter and statutory) and material franchises of the Company and the
Subsidiaries; provided, however, that the Company shall not be required to
preserve any such right or franchise, or the corporate existence of any
Subsidiary, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and the Subsidiaries, taken as a whole; provided, further, however,
that a determination of the Board of Directors of the Company shall not be
required in the event of a merger of one or more Wholly-Owned Subsidiaries of
the Company with or into another Wholly-Owned Subsidiary of the Company or
another Person, if the surviving Person is a Wholly-Owned Subsidiary of the
Company organized under the laws of the United States or a State thereof or of
the District of Columbia. This Section 4.17 shall not prohibit the Company
from taking any other action otherwise permitted by, and made in accordance
with, the provisions of this Indenture.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
(a) The Company may not, in a single transaction or a series of
related transactions, consolidate with or merge with or into, or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets to, another Person or adopt a plan of liquidation unless (i) either (1)
the Company is the surviving or continuing Person or (2) the Person (if other
than the Company) formed by such consolidation or into which the Company is
merged or the person that acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety or in the
case of a plan of liquidation, the Person to which assets of the Company have
been transferred, shall be a corporation, partnership, limited liability
company or trust organized and existing under the laws of the United States or
any State thereof or the District of Columbia; (ii) such surviving person shall
assume all of the obligations of the Company under the Securities and this
Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after giving effect to such
transaction and the use of the proceeds therefrom (on a pro forma basis,
including giving effect to any Indebtedness incurred or anticipated to be
incurred in connection with such transaction), the Company (in the case of
clause (1) of the foregoing clause (i)) or such Person (in the case of clause
(2) of the foregoing clause (i)) shall be able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.04; (iv) immediately after giving effect to such transactions, no Default or
Event of Default shall have occurred or be continuing; and (v) the Company has
delivered to the Trustee prior to the consummation of the proposed transaction
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer complies with this Indenture and that all
conditions precedent in this Indenture relating to such transaction have been
satisfied.
(b) For purposes of the foregoing subsection (a) the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all the properties and assets of
one or more Subsidiaries the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(c) Notwithstanding clauses (i) and (ii) in paragraph (a) above, (1)
any Subsidiary of the Company may consolidate with, merge into or transfer all
or part of its properties and assets to the Company; provided that the Company
is the surviving corporation, and (2) the Company may merge with an Affiliate
thereof incorporated solely for the purpose of reincorporating the Company in
another jurisdiction in the U.S. to realize tax or other benefits.
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SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 5.01 in which the Company is
not the surviving Person and the surviving Person is to assume all the
Obligations of the Company under the Securities and this Indenture, such
surviving Person shall succeed to, and be substituted for, and may exercise
every right and power of, the Company and the Company shall be discharged from
its Obligations under this Indenture and the Securities.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(i) the failure to pay interest on the Securities when the same
becomes due and payable and the Default continues for a period of 30 days
(whether or not such payment is prohibited by the provisions described under
Article Seven);
(ii) the failure to pay principal of or premium, if any, on any
Securities when such principal or premium, if any, becomes due and payable, at
maturity, upon redemption or otherwise (whether or not such payment is
prohibited by the provisions described in Article Seven);
(iii) a default in the observance or performance of any other
covenant or agreement contained in the Securities or this Indenture, which
default continues for a period of 30 days after the Company receives written
notice thereof specifying the default from the Trustee or Holders of at least
25% in aggregate principal amount of outstanding Securities;
(iv) the failure to pay at the final stated maturity (giving effect
to any extensions thereof) the principal amount of any Indebtedness of the
Company or any Subsidiary of the Company, or the acceleration of the final
stated maturity of any such Indebtedness, if the aggregate principal amount of
such Indebtedness, together with the aggregate principal amount of any other
such Indebtedness in default for failure to pay principal at the final stated
maturity (giving effect to any extensions thereof) or which has been
accelerated, aggregates $10,000,000 or more at any time in each case after a
10-day period during which such default shall not have been cured or such
acceleration rescinded;
(v) one or more judgments in an aggregate amount in excess of
$10,000,000 (which are not covered by insurance as to which the insurer has not
disclaimed coverage) being rendered against the Company or any of its
Significant Subsidiaries and such judgment or judgments remain undischarged or
unstayed for a period of 60 days after such judgment or judgments become final
and nonappealable;
(vi) the Company or any of its Significant Subsidiaries pursuant to
or within the meaning of any Bankruptcy Law: (i) commences a voluntary case or
proceeding under any Bankruptcy Law; (ii) consents to the entry of an order for
relief against it in an involuntary case or proceeding under any Bankruptcy
Law; (iii) consents or acquiesces in the institution of a bankruptcy or
insolvency proceeding against it; (iv) consents to the appointment of a
Custodian of it or for all or substantially all of its property; or (v) makes a
general assignment for the benefit of its creditors, or any of them takes any
action to authorize or effect any of the foregoing; or
(vii) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (i) is for relief against the Company or any
Significant Subsidiary of the Company in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any Significant Subsidiary of the
Company for all or substantially all of its property; or (iii) orders the
liquidation of the Company or any Significant Subsidiary of
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the Company; and in each case the order or decree remains unstayed and in
effect for 60 days; provided, however, that if the entry of such order or
decree is appealed and dismissed on appeal, then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have been
cured.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than an
Event of Default specified in clause (vi) or (vii) of Section 6.01) occurs and
is continuing and has not been waived pursuant to Section 6.04, the Trustee or
the Holders of at least 25% in aggregate principal amount of the outstanding
Securities, by notice in writing to the Company (and to the Trustee if given by
the Holders) specifying the respective Event of Default and that it is a
"notice of acceleration" (an "Acceleration Notice") may declare the unpaid
principal of (and premium, if any) and accrued interest to the date of
acceleration on all outstanding Securities to be due and payable immediately
and, upon any such declaration, such principal amount (and premium, if any) and
accrued interest, notwithstanding anything contained in this Indenture or the
Securities to the contrary, shall become immediately due and payable, except
that if there are any amounts outstanding under the Credit Agreement, the same
will become due and payable upon the first to occur of an acceleration under
the Credit Agreement or five business days after receipt by the Company and the
agent under the Credit Agreement of such Acceleration Notice (unless all Events
of Default specified in such Acceleration Notice have been cured or waived).
If an Event of Default specified in clause (vi) or (vii) of Section
6.01 occurs, all unpaid principal of and accrued interest on all outstanding
Securities shall ipso facto become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
Any such declaration with respect to the Securities may be rescinded
and annulled by the Holders of a majority in aggregate principal amount of the
outstanding Securities by written notice to the Trustee if (i) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction, (ii) all existing Events of Default have been cured or waived
except nonpayment of principal of or interest on the Securities that has become
due solely by such declaration of acceleration, (iii) to the extent the payment
of such interest is lawful, interest (at the same rate specified in the
Securities) on overdue installments of interest and overdue payments of
principal, which has become due otherwise than by such declaration of
acceleration, has been paid, (iv) the Company has paid the Trustee its
reasonable compensation and reimbursed the Trustee for its expenses,
disbursements and advances and (v) in the event of the cure or waiver of a
Default or Event of Default of the type described in Section 6.01(vi) and
(vii), the Trustee has received an Officers' Certificate and Opinion of Counsel
that such Default or Event of Default has been cured or waived. No such
rescission shall affect any subsequent Default or impair any right consequent
thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Holder in exercising any right or remedy
maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
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SECTION 6.04. Waiver of Past Default.
Subject to Sections 6.07 and 10.02, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on
any Security as specified in clauses (i) and (ii) of Section 6.01. The Company
shall deliver to the Trustee an Officers' Certificate stating that the
requisite percentage of Holders have consented to such waiver and attaching
copies of such consents. In case of any such waiver, the Company, the Trustee
and the Holders shall be restored to their former positions and rights
hereunder and under the Securities, respectively. This paragraph of this
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and such
Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Holder, it being
understood that the Trustee shall have no duty (subject to Section 7.01) to
ascertain whether or not such actions or forebearances are unduly prejudicial
to such Holders, or that may involve the Trustee in personal liability;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction. In the event the
Trustee takes any action or follows any direction pursuant to this Indenture,
the Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against any loss or expense caused by taking such action or
following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to the Trustee to
pursue a remedy;
(iii) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(v) during such 60-day period the Holders of a majority
in principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
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SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of or interest on a Security, on or
after the respective due dates expressed in the Security, or to bring suit for
the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in Section 6.01(a) or (b) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest overdue on principal
and to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each Holder
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and counsel, and any other
amounts due the Trustee under Section 8.07. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and may be
a member of the creditors' committee.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under Section 8.07;
Second: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
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SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having
due regard to the merits and good faith of the claims or defenses made by the
party litigant. This Section 6.11 shall not apply to a suit by the Trustee, a
suit by a Holder or group of Holders of more than 10% in aggregate principal
amount of the outstanding Securities, or to any suit instituted by any Holder
for the enforcement or the payment of the principal or interest on any
Securities on or after the respective due dates expressed in the Security.
ARTICLE SEVEN
SUBORDINATION OF SECURITIES
SECTION 7.01. Agreement To Subordinate.
The Company agrees, and each Holder by accepting a Security agrees,
that the Indebtedness evidenced by the Securities and other Obligations with
respect to the Securities are subordinated in right of payment, to the extent
and in the manner provided in this Article Seven, to the payment when due of
all Senior Indebtedness of the Company and that such subordination is for the
benefit of and enforceable by the holders of Senior Indebtedness. The
Securities shall in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company, and only Indebtedness of the Company
which is Senior Indebtedness will rank senior to the Securities in accordance
with the provisions set forth herein. Unsecured Indebtedness is not deemed to
be subordinate or junior to Secured Indebtedness merely because it is
unsecured, nor is any Indebtedness deemed to be subordinate or junior to other
Indebtedness merely because it matures after such other Indebtedness. All
provisions of this Article Seven shall be subject to Section 7.12.
SECTION 7.02. Liquidation, Dissolution, Bankruptcy
Upon any payment or distribution of the assets of the Company upon a
total or partial liquidation or dissolution or reorganization or bankruptcy of
or similar proceeding relating to the Company or its property:
(1) holders of Senior Indebtedness of the Company shall
be entitled to receive payment in full in cash or Cash Equivalents of all
Senior Indebtedness of the Company before Holders shall be entitled to receive
any payment of principal of or interest on or other Obligations with respect to
the Securities; and
(2) until the Senior Indebtedness of the Company is paid
in full in cash or Cash Equivalents, or other form acceptable to holders of
Senior Indebtedness, any payment or distribution to which Holders would be
entitled but for the provisions of this Article Seven shall be made to holders
of Senior Indebtedness as their interests may appear.
SECTION 7.03. Default on Senior Indebtedness.
The Company may not pay the principal of, premium (if any), or
interest on, and other Obligations with respect to, the Securities or make any
deposit pursuant to Section 9.01 or repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any Senior Indebtedness
is not paid in cash or Cash Equivalents, or other form acceptable to holders of
Senior Indebtedness, when due or (ii) any other
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default on Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either
case, (x) the default has been cured or waived or is no longer continuing
and/or and any such acceleration has been rescinded or (y) such Senior
Indebtedness has been paid in full in cash or cash equivalents, or other form
acceptable to holders of Senior Indebtedness; provided, however, that the
Company may pay the Securities but subject to the provisions of the first
sentence of this Section 7.03 and the provisions of Section 7.02, without
regard to the foregoing if the Company and the Trustee receive written notice
approving such payment from the Representatives of the Designated Senior
Indebtedness with respect to which either of the events set forth in clause (i)
or (ii) of this sentence has occurred and is continuing. During the
continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods,
the Company may not pay the Securities (except (i) in Qualified Capital Stock
issued by the Company to pay interest on the Securities or issued in exchange
for the Securities, (ii) in securities substantially identical to the
Securities issued by the Company in payment of interest accrued thereon or
(iii) in securities issued by the Company which are subordinated to the Senior
Indebtedness at least to the same extent as the Securities and having a
Weighted Average Life to Maturity at least equal to the remaining Weighted
Average Life to Maturity of the Securities, as long as the court, in approving
any payment or distribution or stock or securities of the type described in the
preceding clauses (i)-(iii), gives effect to the subordination provisions set
forth in this Indenture) for a period (a "Payment Blockage Period") commencing
upon the receipt by the Trustee (with a copy to the Company) of written notice
(a "Blockage Notice") of such default from the Representative of the holders of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is no longer continuing or
(iii) because such Designated Senior Indebtedness has been repaid in full).
Notwithstanding the provisions of the immediately preceding sentence, but
subject to the provisions of the first sentence of this Section 7.03 and the
provisions of Section 7.02, the Company may resume payments on the Securities
after the end of such Payment Blockage Period. Not more than one Blockage
Notice may be given, and not more than one Payment Blockage Period may occur,
in any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness during such period.
SECTION 7.04. Acceleration of Payment of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify the holders or the Representative
(if any) of each issue of Designated Senior Indebtedness which is then
outstanding; provided, however, that the Company and the Trustee shall be
obligated to notify such a Representative only if such Representative has
delivered or caused to be delivered an address for the service of such a notice
to the Company and the Trustee (and the Company and the Trustee shall only
obligated to deliver the notice to the address so specified). If a notice is
required pursuant to the immediately preceding sentence, the Company may not
pay the Securities (except payment (i) in Qualified Capital Stock issued by the
Company to pay interest on the Securities or issued in exchange for the
Securities, (ii) in securities substantially identical to the Securities issued
by the Company in payment of interest accrued thereon or (iii) in securities
issued by the Company which are subordinated to the Senior Indebtedness at
least to the same extent as the Securities and have a Weighted Average Life to
Maturity at least equal to the remaining Weighted Average Life to Maturity of
the Securities, as long as the court, in approving any payment or distribution
or stock or securities of the type described in the preceding clauses
(i)-(iii), gives effect to the subordination provisions set forth in this
Indenture), until five Business Days after the respective Representative of the
Designated Senior Indebtedness receives notice (at the address specified in the
preceding sentence) of such acceleration and, thereafter, may pay the
Securities only if the provisions of this Article Seven otherwise permit
payment at that time.
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SECTION 7.05. When Distribution Must Be Paid.
If a payment or distribution is made to the Trustee or to Holders that
because of this Article Seven should not have been made to them, the Trustee or
the Holders who receive such payment or distribution shall hold it in trust for
holders of Senior Indebtedness and promptly pay it over to them as their
respective interests may appear.
SECTION 7.06. Subrogation.
After all Senior Indebtedness is paid in full in cash or Cash
Equivalents, or other form acceptable to holders of Senior Indebtedness, and
until the Securities are paid in full, Holders shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable to
Senior Indebtedness. A payment or distribution made under this Article Seven
to holders of Senior Indebtedness which otherwise would have been made to
Holders is not, as between the Company and the Holders, a payment by the
Company of Senior Indebtedness.
SECTION 7.07. Relative Rights.
This Article Seven defines the relative rights of Holders of the
Securities on the one hand and holders of Senior Indebtedness on the other
hand. Nothing in this Indenture shall:
(1) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness to receive payments or distributions otherwise
payable to Holders.
SECTION 7.08. Subordination May Not Be Impaired by Company.
No right of any holder of Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by the failure of the Company to
comply with this Indenture.
SECTION 7.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 7.03, the Trustee or Paying Agent may continue
to make payments on the Securities and shall not be charged with knowledge of
the existence of facts that would prohibit the making of any such payments
unless, not less than one Business Day prior to the date of such payment, a
Trust Officer of the Trustee receives notice satisfactory to it that payments
may not be made under this Article Seven. The Company, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that if an issue of Senior
Indebtedness has a Representative, only the Representative may give the notice.
Each Paying Agent shall have the same rights and obligations under this Article
Seven as does the Trustee.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article Seven with respect to any Senior Indebtedness which may at any time be
held by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article Seven shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article Seven shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 8.07.
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SECTION 7.10. Distribution or Notice to Representative.
Whenever a payment or distribution is to be made or a notice given to
holders of Senior Indebtedness, the payment or distribution may be made and the
notice given to their Representative (if any).
SECTION 7.11. Article Seven Not To Prevent Events of Default or Limit Right
To Accelerate.
The failure to make a payment in respect of the Securities by reason
of any provision in this Article Seven shall not be construed as preventing the
occurrence of a Default or Event of Default. Nothing in this Article Seven
shall have any effect on the right of the Holders or the Trustee to accelerate
the maturity of the Securities.
SECTION 7.12. Trust Moneys Not Subordinated.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article Nine by the Trustee for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Senior
Indebtedness or subject to the restrictions set forth in this Article Seven,
and none of the Holders shall be obligated to pay over any such amount to the
Company, any holder of Senior Indebtedness of the Company, or any other
creditor of the Company.
SECTION 7.13. Trustee Entitled To Rely.
Upon any payment or distribution pursuant to this Article Seven, the
Trustee and the Holders shall be entitled to rely (i) upon any order or decree
of a court of competent jurisdiction in which any proceedings of the nature
referred to in Section 7.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Holders or (iii) upon the Representatives
for the holders of Senior Indebtedness for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other Indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Seven. In the event that the
Trustee determines, in good faith, that evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article Seven, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or distribution
and other facts pertinent to the rights of such Person under this Article
Seven, and, if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment or distribution. The Trustee shall have the
right to seek a declaratory judgment as to any right of such Person to receive
such payment or distribution. The provisions of Sections 8.01 and 8.02 shall
be applicable to all actions or omissions of actions by the Trustee pursuant to
this Article Seven.
SECTION 7.14. Trustee To Effectuate Subordination
Each Holder by accepting a Security authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holder and the holders
of Senior Indebtedness as provided in this Article Seven and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 7.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and, subject to the first sentence of Section
7.09, shall not be liable to any such holders if it shall mistakenly pay over
or distribute to Holders or the Company, or any other Person, money or assets
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article Seven or otherwise.
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SECTION 7.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.
Each Holder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Indebtedness, whether such
Senior Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE EIGHT
TRUSTEE
SECTION 8.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of its own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance of such
duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions conforming to the requirements
of this Indenture; however, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 8.01;
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of
such funds is not assured to it or it does not receive from such Holders an
indemnity satisfactory to it in its sole discretion against such risk,
liability, loss, fee or expense which might be incurred by it in compliance
with such request or direction.
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(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 8.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 8.02. Rights of Trustee.
Subject to Section 8.01:
(a) 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 and/or an Opinion of Counsel, which
shall conform to the provisions of Section 13.05. The Trustee shall
not be liable for any action it takes or omits to take in good faith
in reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or
negligence of any agent or attorney (other than an agent who is an
employee of the Trustee) appointed with due care and appointed with
the consent of the Company.
(d) The Trustee shall not be liable for any action it takes
or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may
consult with counsel and the advice or opinion of such counsel as to
matters of law shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or
opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney.
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless the Trustee shall have received written
notice thereof at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
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(j) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties
hereunder.
(k) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the
Trustee shall not be answerable for other than its gross negligence or
willful misconduct.
SECTION 8.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or their
Affiliates with the same rights it would have if it were not Trustee, subject
to Section 8.10 hereof. Any Agent may do the same with like rights. However,
the Trustee is subject to Sections 8.10 and 8.11.
SECTION 8.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall
not be accountable for the Company's use of the proceeds from the Securities,
and it shall not be responsible for any statement of the Company in this
Indenture or any document issued in connection with the sale of Securities or
any statement in the Securities other than the Trustee's certificate of
authentication.
SECTION 8.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and the
Trustee has actual knowledge of such Defaults or Events of Default, the Trustee
shall mail to each Holder notice of the Default or Event of Default within 30
days after the occurrence thereof. Except in the case of a Default or an Event
of Default in payment of principal of or interest on any Security including an
accelerated payment and the failure to make payment on the Change of Control
Payment Date pursuant to a Change of Control Offer or a Default or Event of
Default in complying with Section 5.01, the Trustee may withhold the notice if
and so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interest of Holders. This Section 8.05 shall
be in lieu of the proviso to Section 315(b) of the TIA and such proviso to
Section 315(b) of the TIA is hereby expressly excluded from this Indenture and
the Securities, as permitted by the TIA.
SECTION 8.06. Reports by Trustee to Holders.
If required by TIA Section 313(a), as amended, within 60 days after
each May 1 beginning with October 1, 1998, the Trustee shall mail to each
Holder a report dated as of such May 1 that complies with TIA Section 313(a).
The Trustee also shall comply with TIA Section 313(b), (c) and (d).
A copy of each such report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange, if any, on which the Securities
are listed.
The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 8.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as the Company and the Trustee
shall from time to time agree in writing for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances,
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including all costs and expenses of collection (including reasonable fees,
disbursements and expenses of its agents and outside counsel) incurred or made
by it in addition to the compensation for its services except any such
disbursements, expenses and advances as may be attributable to the Trustee's
negligence or willful misconduct. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents, accountants,
experts and outside counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against any and all loss, damage, claims, liability or expense, including taxes
(other than franchise taxes imposed on the Trustee and taxes based upon,
measured by or determined by the income of the Trustee), arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent that
such loss, damage, claim, liability or expense is due to its own negligence or
willful misconduct. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. However, the
failure by the Trustee to so notify the Company shall not relieve the Company
of its obligations hereunder unless the Company has been prejudiced thereby.
The Company shall defend the claim and the Trustee shall cooperate in the
defense at the Company's expense, provided that the Company shall not be liable
in any action or for which it has assumed the defense for the expenses of
separate counsel to the Trustee unless (1) the employment of separate counsel
has been authorized by the Company, (2) the Trustee has reasonably concluded
(based upon advice of counsel to the Trustee) that there may be legal defenses
available to the Trustee that are different from or in addition to those
available to the Company or (3) a conflict or potential conflict exists (based
upon advice of counsel to the Trustee) between the Trustee and the Company, and
provided, further, that in any such event the Company's reimbursement
obligation with respect to separate counsel of the Trustee will be limited to
the reasonable fees and expenses of such counsel.
The Company need not pay for any settlement made without their written
consent, which consent shall not be unreasonably withheld. The Company need
not reimburse any expense or indemnify against any loss or liability incurred
by the Trustee as a result of its own negligence or willful misconduct.
To secure the Company's payment obligations in this Section 8.07, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of or interest on particular
Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(vi) or (vii) occurs, the expenses (including
the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute
expenses of administration under any Bankruptcy Law. The Company's obligations
under this Section 8.07 and any claim arising hereunder shall survive the
resignation or removal of any Trustee, the discharge of the Company's
obligations pursuant to Article Eight and any rejection or termination under
any Bankruptcy Law.
SECTION 8.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing at least 10 days in advance. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by so notifying the
Trustee and the Company in writing and may appoint a successor Trustee with the
Company's consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 8.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy
Law;
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(c) a Custodian or other public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 8.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 8.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties
of the Trustee under this Indenture. A successor Trustee shall mail notice of
its succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of at least 10% in principal amount of the outstanding Securities
may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
8.08, the Company's obligations under Section 8.07 shall continue for the
benefit of the retiring Trustee.
SECTION 8.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee; provided, however, that such corporation shall be otherwise
qualified and eligible under this Article Eight.
SECTION 8.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA Sections 310(a)(1) and 310(a)(2). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of TIA Section 310(b),
the Trustee and the Company shall comply with the provisions of TIA Section
310(b); provided, however, that there shall be excluded from the operation of
TIA Section 310(b)(1) any indenture or indentures under which other securities
or certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in TIA Section
310(b)(1) are met. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.10, the Trustee shall resign
immediately in the manner and with the effect hereinbefore specified in this
Article Eight. The provisions of TIA Section 310 shall apply to the Company
and any other obligor of the Securities.
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SECTION 8.11. Preferential Collection of Claims Against the Company.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE NINE
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01. Termination of the Company's Obligations.
The Company may terminate its obligations under the Securities and
this Indenture as well as the obligations of the Guarantors under their
respective Subsidiary Guarantees, except those obligations referred to in the
penultimate paragraph of this Section 9.01, if :
(i) either (a) all the Securities theretofore
authenticated and delivered (except lost, stolen or destroyed Securities which
have been replaced or paid and Securities for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from such trust)
have been delivered to the Trustee for cancellation or (b) all Securities not
theretofore delivered to the Trustee for cancellation have become due and
payable or have been called for redemption and the Company has irrevocably
deposited or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire Indebtedness on the Securities not
theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Securities to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may
be;
(ii) the Company has paid all other sums payable under
this Indenture by the Company; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the first paragraph of this Section 9.01, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 8.07, 8.08,
9.05 and 9.06 shall survive until the Securities are no longer outstanding.
After the Securities are no longer outstanding, the Company's obligations in
Sections 8.07, 8.08, 9.05 and 9.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon request
shall acknowledge in writing the discharge of the Company's and Guarantors'
obligations under the Securities, the Subsidiary Guarantees and this Indenture
except for those surviving obligations specified above.
SECTION 9.02. Legal Defeasance and Covenant Defeasance
(a) The Company may terminate its obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, the
Company may, at its option, at any time elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities, subject in either case to
compliance with the conditions set forth in Section 9.03.
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(b) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be deemed to have
paid and discharged the entire indebtedness represented by the outstanding
Securities and shall be deemed to be discharged from all obligations with
respect to the Securities, except for (i) the rights of Holders to receive
payments in respect of the principal of, premium, if any, and interest on the
Securities when such payments are due, (ii) the Company's obligations with
respect to the Securities under Sections 2.03 through 2.07, inclusive, 4.02 and
4.16, (iii) the rights, powers, trust, duties and immunities of the Trustee
under this Indenture and the Company's obligations in connection therewith and
(iv) Article Nine of this Indenture (hereinafter, "Legal Defeasance"). Subject
to compliance with this Article Nine, the Company may exercise its option under
this paragraph (b) notwithstanding the prior exercise of its option under
paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of the
option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be released from its
obligations under the covenants contained in Sections 4.03 through 4.15,
inclusive, and Article Five with respect to the outstanding Securities
(hereinafter, "Covenant Defeasance") and thereafter any omission to comply with
such obligations shall not constitute a Default or an Event of Default with
respect to the Securities. In addition, upon the Company's exercise under
paragraph (a) hereof of the option applicable to this paragraph (c), subject to
the satisfaction of the conditions set forth in Section 9.03, any failure or
omission to comply with such obligations shall not constitute a Default or
Event of Default with respect to the Securities.
SECTION 9.03. Conditions to Legal Defeasance or Covenant Defeasance.
In order to exercise either Legal Defeasance pursuant to Section
9.02(b) or Covenant Defeasance pursuant to Section 9.02(c):
(a) the Company must irrevocably deposit or cause to be
deposited with the Trustee, in trust, for the benefit of the Holders,
cash in U.S. legal tender or United States Government Obligations, or
a combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants, to pay the principal of premium, if any, and interest on
the Securities on the stated date for payment thereof or on the
applicable redemption date, as the case may be;
(b) the Company shall have delivered to the Trustee an
Opinion of Counsel in the United States reasonably acceptable to the
Trustee or a private letter ruling issued to the Company by the
Internal Revenue Service to the effect that the Holders of Securities
will not recognize income, gain or loss for federal income tax
purposes as a result of the deposit and related 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 option had
not been exercised and, in the case of an Opinion of Counsel furnished
in connection with a Legal Defeasance, accompanied by a private letter
ruling issued to the Company by the Internal Revenue Service to such
effect;
(c) 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 resulting from the borrowing of funds to be applied to such
deposit);
(d) 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 loan 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;
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with; and
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(f) the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that assuming no intervening
bankruptcy or insolvency of the Company between the date of deposit
and the 91st day following the deposit and that no Holder is an
insider of the Company, after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required by
clause (b) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable on the Final Maturity Date within one year or (z)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
SECTION 9.04. Application of Trust Money; Trustee Acknowledgment and
Indemnity.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to this Article Nine, and shall apply
the deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
After such delivery or irrevocable deposit and delivery of any
required Officers' Certificate or Opinion of Counsel, the Trustee upon request
shall acknowledge in writing the discharge of the Company's obligations under
the Securities and this Indenture except for those surviving obligations
specified above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Article Nine or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding
Securities.
SECTION 9.05. Repayment to Company.
Subject to Sections 8.07 and 9.04, the Trustee and the Paying Agent
shall promptly pay to the Company upon written request any excess money held by
them at any time. The Trustee and the Paying Agent shall promptly pay to the
Company any money held by it for the payment of principal or interest that
remains unclaimed for one year; provided, however, that the Trustee or such
Paying Agent before being required to make any payment may at the expense of
the Company cause to be published once in a newspaper of general circulation in
the City of New York or mail to each Holder entitled to such money notice that
such money remains unclaimed and that, after a date specified therein which
shall be at least 30 days from the date of such publication or mailing, any
unclaimed balance of such money then remaining shall be repaid to the Company.
After payment to the Company, Holders entitled to money must look solely to the
Company for payment as general creditors unless an applicable abandoned
property law designates another person and all liability of the Trustee or
Paying Agent with respect to such money shall thereupon cease.
SECTION 9.06. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or United
States Government Obligations by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities shall be revived and
reinstated as though no deposit had occurred pursuant to Section 9.03 until
such time as the Trustee or Paying Agent is permitted to apply all such money
or United States Government Obligations in accordance with Section 9.03;
provided, however, that if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or United States Government Obligations
held by the Trustee or Paying Agent.
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ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors, if any, when authorized by a
resolution of the Board of Directors, and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect
the rights of any Holder in any material respect;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(c) to provide for uncertificated Securities in addition to
or in place of certificated Securities;
(d) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional
benefit or rights to the Holders;
(f) to make any other change that does not adversely affect
the rights of any Holder in any material respect under this Indenture;
(g) 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;
(h) to add a Guarantor in accordance with Section 4.14 or
otherwise;
provided, however, that the Company has delivered to the Trustee an
Opinion of Counsel stating that such amendment or supplement complies with the
provisions of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, if any, when
authorized by a Board Resolution, and the Trustee may modify, amend or
supplement, or waive compliance by the Company with any provision of, this
Indenture or the Securities with the written consent of the Holders of at least
a majority in principal amount of the outstanding Securities. However, without
the consent of each Holder affected, no such modification, amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may:
(a) reduce the principal amount of Securities whose Holders
must consent to an amendment, supplement or waiver;
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(b) reduce the principal of or change the Stated Maturity of
any Security or alter the provisions with respect to the repurchase or
redemption of the Securities;
(c) reduce the rate of or change the time for payment of
interest on any Security;
(d) make any Security payable in money other than that stated
in the Securities or this Indenture;
(e) make any change in the provisions of this Indenture
protecting the rights of each holder of a Security to receive payment
of principal of or premium, if any, or interest on such Security on or
after the due date thereof, or to bring suit to enforce such payment
or permitting holders of a majority in principal amount of the
Securities to waive a Default or Event of Default; or
(f) alter the Company's obligation to purchase the Securities
arising under Section 4.08 or 4.15, amend, modify or change the
obligation of the Company to make or consummate a Change of Control
Offer or Net Proceeds Offer or waive any default in the performance
thereof or modify any of the provisions or definitions with respect to
any such offers.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Record Date for Consents and Effect of Consents.
Until an amendment, supplement or, waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made
on any Security. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Security or
portion of a Security by notice to the Trustee or the Company received before
the date on which the Trustee receives an Officers' Certificate certifying that
the Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver (at
which time such amendment, supplement or waiver shall become effective).
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those persons
who were Holders of Securities at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after
such record date. No such consent shall be valid or effective for more than
120 days after such record date. The Trustee is entitled to rely upon any
electronic instruction from beneficial owners to the Holders of any Global
Security.
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After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (f) of Section 10.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the
same debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company
or the Trustee so determine, the Company in exchange for the Security shall
issue and the Trustee shall authenticate a new Security that reflects the
changed terms. Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment, supplement
or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement
or waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions).
The Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Subject to the provisions of Article Twelve, each Person who becomes a
Guarantor pursuant to Section 4.14 of this Indenture shall hereby
unconditionally, jointly and severally, guarantee (each, a "Guarantee") to each
Holder of a Security authenticated by the Trustee and to the Trustee and its
successors and assigns that the principal of and interest on the Securities
will be promptly paid in full when due, subject to any applicable grace period,
whether at maturity, by acceleration or otherwise, and interest on the overdue
principal and interest on any overdue interest on the Securities and all other
obligations of the Company to the Holders or the Trustee hereunder or under the
Securities will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; subject, however, to the limitations set forth in
Section 11.04. Each Guarantor hereby agrees that its obligations hereunder
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Securities with
respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that the Guarantee
will not be discharged except by complete performance of the obligations
contained in the Securities, this Indenture, and this Guarantee. If any Holder
or the Trustee is required by any court or otherwise to return to the Company,
any Guarantor, or any custodian, trustee, liquidator or other similar official
acting in relation to the Company or any Guarantor, any amount paid by the
Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Holders and
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the Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article Six for the purpose of this
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article Six,
such obligations (whether or not due and payable) shall forth become due and
payable by each Guarantor for the purpose of this Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
If the Securities are defeased in accordance with the terms of this
Indenture, or if, subject to the requirements of Section 5.01, if applicable,
all or substantially all of the assets of any Guarantor or all of the equity
interests of any Guarantor are sold (including by issuance or otherwise) by the
Company in a transaction constituting an Asset Sale and (x) the Net Cash
Proceeds from such Asset Sale are used in accordance with Section 4.08 or (y)
the Company delivers to the Trustee an Officers' Certificate to the effect that
the Net Cash Proceeds from such Asset Sale shall be used in accordance with
Section 4.08 and within the time limits specified by Section 4.08, then each
Guarantor (in the case of defeasance) or such Guarantor (in the event of a sale
or other disposition of all of the assets or the equity interests of such
Guarantor) or the corporation acquiring such assets (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
shall be released and discharged from all obligations under this Article Eleven
without any further action required on the part of the Trustee or any Holder.
The Trustee shall, at the sole cost and expense of the Company and upon receipt
at the reasonable request of the Trustee of an Opinion of Counsel that the
provisions of this Section 11.03 have been complied with, deliver an
appropriate instrument evidencing such release upon receipt of a request by the
Company accompanied by an Officers' Certificate certifying as to the compliance
with this Section 11.03. Any Guarantor not so released remains liable for the
full amount of principal of and interest on the Securities and the other
obligations of the Company hereunder as provided in this Article Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other applicable law. To
effectuate the foregoing intention, the Holders and each Guarantor hereby
irrevocably agree that the obligations of each Guarantor under its Guarantee
shall be limited to the maximum amount as will, after giving effect to all
other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 11.05, result in the obligations of such
Guarantor under its Guarantee not constituting such a fraudulent transfer or
conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each
Guarantor (including the Funding Guarantor), determined in accordance with
GAAP, subject to Section 11.04, for all payments, damages and expenses incurred
by such Funding Guarantor in discharging the Company's obligations with respect
to the Securities or any other Guarantor's obligations with respect to the
Guarantee.
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SECTION 11.06. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Agreement To Subordinate.
Each Guarantor agrees, and each Holder by accepting a Security agrees,
that the Indebtedness evidenced by the Securities and other Obligations with
respect to the Securities (including the Subsidiary Guarantee) are subordinated
in right of payment, to the extent and in the manner provided in this Article
Twelve, to the payment when due of all Guarantor Senior Indebtedness of such
Guarantor and that such subordination is for the benefit of and enforceable by
the holders of Guarantor Senior Indebtedness. The Subsidiary Guarantees shall
in all respects rank pari passu with all other Guarantor Senior Subordinated
Indebtedness of a Guarantor, and only Indebtedness of a Guarantor which is
Guarantor Senior Indebtedness will rank senior to the Securities and the
Subsidiary Guarantees in accordance with the provisions set forth herein.
Unsecured Indebtedness is not deemed to be subordinate or junior to Secured
Indebtedness merely because it is unsecured, nor is any Indebtedness deemed to
be subordinate or junior to other Indebtedness merely because it matures after
such other Indebtedness. All provisions of this Article Twelve shall be
subject to Section 12.12.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.
Upon any payment or distribution of the assets of a Guarantor upon a
total or partial liquidation or dissolution or reorganization or bankruptcy of
or similar proceeding relating to a Guarantor or its property:
(1) holders of Guarantor Senior Indebtedness of such
Guarantor shall be entitled to receive payment in full in cash or Cash
Equivalents of all Guarantor Senior Indebtedness of such Guarantor before
Holders shall be entitled to receive any payment of principal of or interest on
or other Obligations with respect to the Securities; and
(2) until the Guarantor Senior Indebtedness of such
Guarantor is paid in full in cash or cash equivalents, or other form acceptable
to holders of Guarantor Senior Indebtedness, any payment or distribution to
which Holders would be entitled but for the provisions of this Article Twelve
shall be made to holders of Guarantor Senior Indebtedness as their interests
may appear.
SECTION 12.03. Default on Guarantor Senior Indebtedness.
No Guarantor may pay the principal of, premium (if any), or interest
on, and other Obligations with respect to, the Securities or the Subsidiary
Guarantees or make any deposit pursuant to Section 9.01 or repurchase, redeem
or otherwise retire any Securities or the Subsidiary Guarantees (collectively,
"pay the Securities") if (i) any Guarantor Senior Indebtedness is not paid in
cash or cash equivalents when due or (ii) any other default on Guarantor Senior
Indebtedness occurs and the maturity of such Guarantor Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the
default has been cured or waived or is no longer
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continuing and/or and any such acceleration has been rescinded or (y) such
Guarantor Senior Indebtedness has been paid in full in cash or cash
equivalents, or other form acceptable to holders of Guarantor Senior
Indebtedness; provided, however, that the Guarantor may pay the Securities but
subject to the provisions of the first sentence of this Section 12.03 and the
provisions of Section 12.02, without regard to the foregoing if the Company and
the Trustee receive written notice approving such payment from the
Representatives of the Designated Senior Indebtedness with respect to which
either of the events set forth in clause (i) or (ii) of this sentence has
occurred or is continuing. During the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding sentence) with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof
may be accelerated immediately without further notice (except such notice as
may be required to effect such acceleration) or the expiration of any
applicable grace periods, a Guarantor may not pay the Securities (except (i) in
Qualified Capital Stock issued by such Guarantor to pay interest on the
Securities or issued in exchange for its Subsidiary Guarantee, (ii) in
securities substantially identical to its Subsidiary Guarantee issued by such
Guarantor in payment of interest accrued thereon or (iii) in securities issued
by such Guarantor which are subordinated to the Guarantor Senior Indebtedness
at least to the same extent as its Subsidiary Guarantee and having a Weighted
Average Life to Maturity at least equal to the remaining Weighted Average Life
to Maturity of the Securities, as long as the court, in approving any payment
or distribution or stock or securities of the type described in the preceding
clauses (i)-(iii), gives effect to the subordination provisions set for in this
Indenture) for a period (a "Guarantor Payment Blockage Period") commencing upon
the receipt by the Trustee (with a copy to the Company) of written notice (a
"Guarantor Blockage Notice") of such default from the Representative of the
holders of such Designated Senior Indebtedness specifying an election to effect
a Guarantor Payment Blockage Period and ending 179 days thereafter (or earlier
if such Guarantor Payment Blockage Period is terminated (i) by written notice
to the Trustee and the Company from the Person or Persons who gave such
Guarantor Blockage Notice, (ii) because the default giving rise to such
Guarantor Blockage Notice is no longer continuing or (iii) because such
Designated Senior Indebtedness has been repaid in full.) Notwithstanding the
provisions of the immediately preceding sentence, but subject to the provisions
of the first sentence of this Section 12.03 and the provisions of Section
12.02, the Guarantor may resume payments on the Securities after the end of
such Payment Blockage Period. Not more than one Blockage Notice may be given,
and not more than one Payment Blockage Period may occur, in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness during such period.
SECTION 12.04. Acceleration of Payment of Securities.
If a notice is required pursuant to the first sentence of Section
7.04, no Guarantor may pay the Securities (except payment (i) in Qualified
Capital Stock issued by the Guarantor to pay interest on the Securities or
issued in exchange for its Subsidiary Guarantee, (ii) in securities
substantially identical to the Subsidiary Guarantee issued by the Guarantor in
payment of interest accrued thereon or (iii) in securities issued by the
Guarantor which are subordinated to the Guarantor Senior Indebtedness at least
to the same extent as the Subsidiary Guarantee and have a Weighted Average Life
to Maturity at least equal to the remaining Weighted Average Life to Maturity
of the Securities, as long as the court, in approving any payment or
distribution or stock or securities of the type described in the preceding
clauses (i)-(iii), gives effect to the subordination provisions set forth in
this Indenture), until five Business Days after the respective Representative
of the Designated Senior Indebtedness receives notice (at the address specified
in the preceding sentence) of such acceleration and, thereafter, may pay the
Securities only if the provisions of this Article Twelve otherwise permit
payment at that time.
SECTION 12.05. When Distribution Must Be Paid Over.
If a payment or distribution is made to the Trustee or to Holders that
because of this Article Twelve should not have been made to them, the Trustee
or the Holders who receive such payment or distribution shall hold it in trust
for holders of Guarantor Senior Indebtedness and promptly pay it over to them
as their respective interests may appear.
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SECTION 12.06. Subrogation.
After all Guarantor Senior Indebtedness is paid in full in cash or
Cash Equivalents, or other form acceptable to holders of Senior Indebtedness,
and until the Securities are paid in full, Holders shall be subrogated to the
rights of holders of Guarantor Senior Indebtedness to receive distributions
applicable to Guarantor Senior Indebtedness. A distribution made under this
Article Twelve to holders of Guarantor Senior Indebtedness which otherwise
would have been made to Holders is not, as between the Guarantor and the
Holders, a payment by any Guarantor of Guarantor Senior Indebtedness.
SECTION 12.07. Relative Rights.
This Article Twelve defines the relative rights of Holders of the
Securities on the one hand and holders of Guarantor Senior Indebtedness on the
other hand. Nothing in this Indenture shall:
(1) impair, as between the Guarantor and the Holders, the
obligation of any Guarantor, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their terms; or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Guarantor Senior Indebtedness to receive payments or distributions
otherwise payable to Holders.
SECTION 12.08. Subordination May Not Be Impaired by Guarantor.
No right of any holder of Guarantor Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities or the Subsidiary
Guarantees shall be impaired by any act or failure to act by any Guarantor or
by the failure of any Guarantor to comply with this Indenture.
SECTION 12.09. Rights of Trustee and Paying Agent.
Notwithstanding Section 12.03, the Trustee or Paying Agent may
continue to make payments on the Securities and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any such
payments unless, not less than one Business Day prior to the date of such
payment, a Trust Officer of the Trustee receives notice satisfactory to it that
payments may not be made under this Article Twelve. A Guarantor, the Registrar
or co-registrar, the Paying Agent, a Representative or a holder of Guarantor
Senior Indebtedness may give the notice; provided, however, that if an issue of
Guarantor Senior Indebtedness has a Representative, only the Representative may
give the notice. Each Paying Agent shall have the same rights and obligations
under this Article Twelve as does the Trustee.
The Trustee in its individual or any other capacity may hold Guarantor
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article Twelve with respect to any Guarantor Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Guarantor
Senior Indebtedness; and nothing in Article Twelve shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article Twelve shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 8.07.
SECTION 12.10. Distribution or Notice to Representative.
Whenever a payment or distribution is to be made or a notice given to
holders of Guarantor Senior Indebtedness, the payment or distribution may be
made and the notice given to their Representative (if any).
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SECTION 12.11. Article Twelve Not To Prevent Events of Default or Limit Right
To Accelerate.
The failure to make a payment in respect of the Securities by reason
of any provision in this Article Twelve shall not be construed as preventing
the occurrence of a Default or Event of Default. Nothing in this Article
Twelve shall have any effect on the right of the Holders or the Trustee to
accelerate the maturity of the Securities.
SECTION 12.12. Trust Moneys Not Subordinate.
Notwithstanding anything contained herein to the contrary, payments
from money or the proceeds of U.S. Government Obligations held in trust under
Article Nine by the Trustee for the payment of principal of and interest on the
Securities shall not be subordinated to the prior payment of any Guarantor
Senior Indebtedness or subject to the restrictions set forth in this Article
Twelve, and none of the Holders shall be obligated to pay over any such amount
to such Guarantor, any holder of Guarantor Senior Indebtedness of such
Guarantor, or any other creditor of such Guarantor.
SECTION 12.13. Trustee Entitled To Rely.
Upon any payment or distribution pursuant to this Article Twelve, the
Trustee and the Holders shall be entitled to rely (i) upon any order or decree
of a court of competent jurisdiction in which any proceedings of the nature
referred to in Section 12.02 are pending, (ii) upon a certificate of the
liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Holders or (iii) upon the Representatives
for the holders of Guarantor Senior Indebtedness for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Guarantor Senior Indebtedness and other
Indebtedness of any Guarantor, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Twelve. In the event that the Trustee determines,
in good faith, that evidence is required with respect to the right of any
Person as a holder of Guarantor Senior Indebtedness to participate in any
payment or distribution pursuant to this Article Twelve, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Guarantor Senior Indebtedness held by such Person,
the extent to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under this
Article Twelve, and, if such evidence is not furnished, the Trustee may defer
any payment to such Person pending judicial determination as to the right of
such Person to receive such payment or distribution. The Trustee shall have
the right to seek a declaratory judgment as to any right of such Person to
receive such payment or distribution. The provisions of Sections 8.01 and 8.02
shall be applicable to all actions or omissions of actions by the Trustee
pursuant to this Article Twelve.
SECTION 12.14. Trustee To Effectuate Subordination.
Each Holder by accepting a Security authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holder and the holders
of Guarantor Senior Indebtedness as provided in this Article Twelve and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION 12.15. Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and, subject to the first sentence of
Section 12.09, shall not be liable to any such holders if it shall mistakenly
pay over or distribute to Holders or the Guarantor, or any other Person, money
or assets to which any holders of Guarantor Senior Indebtedness shall be
entitled by virtue of this Article Twelve or otherwise.
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SECTION 12.16. Reliance by Holders of Guarantor Senior Indebtedness on
Subordination Provisions.
Each Holder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Guarantor Senior Indebtedness,
whether such Guarantor Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Guarantor Senior Indebtedness and such holder of
Guarantor Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Guarantor Senior Indebtedness.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable,
be governed by such provisions. If any provision of this Indenture modifies
any TIA provision that may be so modified, such TIA provision shall be deemed
to apply to this Indenture as so modified. If any provision of this Indenture
excludes any TIA provision that may be so excluded, such TIA provision shall be
excluded from this Indenture.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company:
COOPERATIVE COMPUTING, INC.
0000 Xxx Xxxx Xxxx
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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if to the Trustee:
NORWEST BANK MINNESOTA, National Association
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
Attention: Corporate Trust Department
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to a
Holder including any notice delivered in connection with TIA Section 310(b),
TIA Section 313(c), TIA Section 314(a) and TIA Section 315(b), shall be
mailed to him at his address as set forth on the Security Register and shall be
sufficiently given to him if so mailed within the time prescribed. To the
extent required by the TIA, any notice or communication shall also be mailed to
any Person described in TIA Section 313(c).
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for
a notice to the Trustee, which is deemed given only when received, if a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar and any other person shall have the
protection of TIA Section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
SECTION 13.05. Statements Required in Certificate.
Each certificate with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate has read such
covenant or condition;
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(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements contained in such certificate are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.07. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE, THE
SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
SECTION 13.08. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder
by accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and
the Subsidiary Guarantees.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in the
Subsidiary Guarantees 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 a Holder shall have no claim therefor against
any party hereto.
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SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is not a Business Day at a place of payment, payment
may be made at that place on the next succeeding Business Day.
[Signature Pages Follow]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
COOPERATIVE COMPUTING, INC.
By: /s/ XXXXXXX XXXX
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Name: Xxxxxxx Xxxx
Title: Chief Financial Officer
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: /s/ XXXXXX X. XXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
