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APPLIED POWER INC.,
as Issuer
The SUBSIDIARY GUARANTORS named herein,
as Guarantors
and
BANK ONE TRUST COMPANY, N.A.,
as Trustee
INDENTURE
Dated as of August 1, 2000
13% Senior Subordinated Notes due 2009
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CROSS-REFERENCE TABLE
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TIA Indenture
Section Section
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310 (a)(1)........................................... 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(a)(5)........................................... 7.08; 7.10
(b).............................................. 7.08; 7.10; 13.02
(c).............................................. N.A.
311 (a).............................................. 7.11
(b).............................................. 7.11
(c).............................................. N.A.
312 (a).............................................. 2.05
(b).............................................. 13.03
(c).............................................. 13.03
313 (a).............................................. 7.06
(b)(1)........................................... N.A.
(b)(2)........................................... 7.06
(c).............................................. 7.06; 13.02
(d).............................................. 7.06
314 (a).............................................. 4.07; 4.08; 13.02
(b).............................................. N.A.
(c)(1)........................................... 13.04
(c)(2)........................................... 13.04
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 13.05
(f).............................................. N.A.
315 (a).............................................. 7.01(b)
(b).............................................. 7.05; 13.02
(c).............................................. 7.01(a)
(d).............................................. 7.01(c)
(e).............................................. 6.11
316 (a)(last sentence)............................... 2.09
(a)(1)(A)........................................ 6.05
(a)(1)(B)........................................ 6.04
(a)(2)........................................... N.A.
(b).............................................. 6.07
(c).............................................. 9.05
317 (a)(1)........................................... 6.08
(a)(2)........................................... 6.09
(b).............................................. 2.04
318(a)........................................... 13.01
(c).............................................. 13.01
N.A. means not applicable
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Incorporation by Reference of TIA..............................32
SECTION 1.03. Rules of Construction..........................................33
SECTION 1.04. One Class of Securities........................................33
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating................................................34
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount.............................................34
SECTION 2.03. Registrar and Paying Agent.....................................35
SECTION 2.04. Paying Agent To Hold Assets in Trust...........................36
SECTION 2.05. Noteholder Lists...............................................36
SECTION 2.06. Replacement Notes..............................................37
SECTION 2.07. Outstanding Notes..............................................37
SECTION 2.08. Treasury Notes.................................................38
SECTION 2.09. Temporary Notes................................................38
SECTION 2.10. Cancellation...................................................38
SECTION 2.11. Defaulted Interest.............................................39
SECTION 2.12. CUSIP Number...................................................39
SECTION 2.13. Deposit of Moneys..............................................40
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.............................................40
SECTION 3.02. Selection of Notes To Be Redeemed..............................40
SECTION 3.03. Notice of Redemption...........................................41
SECTION 3.04. Effect of Notice of Redemption.................................42
SECTION 3.05. Deposit of Redemption Price....................................42
SECTION 3.06. Notes Redeemed in Part.........................................43
SECTION 3.07. Optional Redemption............................................43
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes...............................................43
SECTION 4.02. Maintenance of Office or Agency................................43
SECTION 4.03. Corporate Existence............................................44
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SECTION 4.04. Payment of Taxes and Other Claims..............................44
SECTION 4.05. Maintenance of Properties and Insurance........................45
SECTION 4.06. Compliance Certificate; Notice of Default......................45
SECTION 4.07. Compliance with Laws...........................................46
SECTION 4.08. SEC Reports....................................................46
SECTION 4.09. Waiver of Stay, Extension or Usury Laws........................46
SECTION 4.10. Limitation on Restricted Payments..............................47
SECTION 4.11. Limitation on Restrictions on
Distributions from Restricted
Subsidiaries.................................................50
SECTION 4.12. Limitation on Transactions with
Affiliates...................................................51
SECTION 4.13. Limitation on Indebtedness.....................................52
SECTION 4.14. Change of Control..............................................56
SECTION 4.15. Limitation on Sales of Assets and
Subsidiary Stock.............................................58
SECTION 4.16. Future Subsidiary Guarantors...................................62
SECTION 4.17. Limitation on Liens............................................62
SECTION 4.18. Limitation on the Sale or Issuance of
Capital Stock of Restricted
Subsidiaries.................................................63
SECTION 4.19. Prohibition on Incurrence of Senior
Subordinated Debt............................................63
SECTION 4.20. Limitation on Sale/Leaseback Transactions......................64
SECTION 4.21. Limitation of Guarantees by Restricted
Subsidiaries.................................................64
SECTION 4.22. Payments for Consent...........................................65
SECTION 4.23. Excess Cash Flow Repurchase Offer..............................66
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale
of Assets of the Company.....................................67
SECTION 5.02. Successor Corporation Substituted
for the Company..............................................69
SECTION 5.03. Merger, Consolidation and Sale of
Assets of Any Subsidiary Guarantor...........................69
SECTION 5.04. Successor Corporation Substituted for
Subsidiary Guarantor.........................................70
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..............................................70
SECTION 6.02. Acceleration...................................................72
SECTION 6.03. Other Remedies.................................................74
SECTION 6.04. Waiver of Past Defaults........................................74
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SECTION 6.05. Control by Majority............................................74
SECTION 6.06. Limitation on Suits............................................75
SECTION 6.07. Rights of Holders To Receive Payment...........................75
SECTION 6.08. Collection Suit by Trustee.....................................75
SECTION 6.09. Trustee May File Proofs of Claim...............................76
SECTION 6.10. Priorities.....................................................76
SECTION 6.11. Undertaking for Costs..........................................77
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee..............................................77
SECTION 7.02. Rights of Trustee..............................................79
SECTION 7.03. Individual Rights of Trustee...................................80
SECTION 7.04. Trustee's Disclaimer...........................................80
SECTION 7.05. Notice of Defaults.............................................80
SECTION 7.06. Reports by Trustee to Holders..................................80
SECTION 7.07. Compensation and Indemnity.....................................81
SECTION 7.08. Replacement of Trustee.........................................82
SECTION 7.09. Successor Trustee by Merger, Etc...............................83
SECTION 7.10. Trustee's Capital and Surplus..................................83
SECTION 7.11. Eligibility; Disqualification..................................83
SECTION 7.12. Preferential Collection of
Claims Against Company......................................84
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance....................84
SECTION 8.02. Conditions to Defeasance.......................................85
SECTION 8.03. Application of Trust Money.....................................87
SECTION 8.04. Repayment to Company...........................................87
SECTION 8.05. Indemnity for Government Obligations...........................87
SECTION 8.06. Reinstatement..................................................88
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.....................................88
SECTION 9.02. With Consent of Holders........................................89
SECTION 9.03. Compliance with TIA............................................91
SECTION 9.04. Revocation and Effect of Consents..............................91
SECTION 9.05. Notation on or Exchange of Notes...............................92
SECTION 9.06. Trustee To Sign Amendments, Etc................................92
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ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee........................................93
SECTION 10.02. Severability...................................................94
SECTION 10.03. Release of Subsidiary Guarantor from the
Guarantee....................................................94
SECTION 10.04. Limitation on Amount Guaranteed;
Contribution by Subsidiary Guarantors........................95
SECTION 10.05. Waiver of Subrogation..........................................97
SECTION 10.06. Execution of Guarantee.........................................98
SECTION 10.07. Waiver of Stay, Extension or Usury Laws........................98
ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Agreement to Subordinate.......................................99
SECTION 11.02. Liquidation, Dissolution, Bankruptcy...........................99
SECTION 11.03. Default on Senior Indebtedness................................100
SECTION 11.04. Acceleration of Payment of Notes..............................101
SECTION 11.05. When Distribution Must Be Paid Over...........................101
SECTION 11.06. Subrogation...................................................101
SECTION 11.07. Relative Rights...............................................102
SECTION 11.08. Subrogation May Not Be Impaird By The
Company.....................................................102
SECTION 11.09. Rights of Trustee and Paying Agent............................102
SECTION 11.10. Distribution or Notice to Representative......................103
SECTION 11.11. Article Eleven Not To Prevent Events of
Default or Limit Right To Accelerate........................103
SECTION 11.12. Trust Moneys Not Subordinated.................................103
SECTION 11.13. Trustee Entitled To Rely......................................104
SECTION 11.14. Trustee To Effectuate Subordination...........................104
SECTION 11.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness.........................................105
SECTION 11.16. Reliance by Holders of Senior Indebtedness
on Subordination............................................105
ARTICLE TWELVE
SUBORDINATION OF GUARANTEES
SECTION 12.01. Agreement to Subordinate......................................105
SECTION 12.02. Liquidation, Dissolution, Bankruptcy..........................106
SECTION 12.03. Default on Senior Indebtedness................................106
SECTION 12.04. Acceleration of Payment of Notes..............................108
SECTION 12.05. When Distribution Must Be Paid Over...........................108
SECTION 12.06. Subrogation...................................................108
SECTION 12.07. Relative Rights...............................................109
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SECTION 12.08. Subordination May Not Be Impaired by a
Subsidiary Guarantor........................................109
SECTION 12.09. Rights of Trustee and Paying Agent............................109
SECTION 12.10. Distribution or Notice to Representative......................110
SECTION 12.11. Article Twelve Not To Prevent Events of
Default or Limit Right To Accelerate........................110
SECTION 12.12. Trust Moneys Not Subordinated.................................110
SECTION 12.13. Trustee Entitled To Rely......................................110
SECTION 12.14. Trustee To Effectuate Subordination...........................111
SECTION 12.15. Trustee Not Fiduciary for Holders of
Senior Indebtedness of Subsidiary
Guarantors..................................................111
SECTION 12.16. Reliance by Holders of Senior Indebtedness
of Subsidiary Guarantors on
Subordination Provisions....................................112
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA Controls..................................................112
SECTION 13.02. Notices.......................................................112
SECTION 13.03. Communications by Holders
with Other Holders..........................................114
SECTION 13.04. Certificate and Opinion
as to Conditions Precedent..................................114
SECTION 13.05. Statements Required in
Certificate or Opinion......................................114
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.....................115
SECTION 13.07. Legal Holidays................................................115
SECTION 13.08. Governing Law.................................................115
SECTION 13.09. No Adverse Interpretation of Other
Agreements..................................................115
SECTION 13.10. No Recourse Against Others....................................116
SECTION 13.11. Successors....................................................116
SECTION 13.12. Multiple Originals............................................116
SECTION 13.13. Severability..................................................116
SECTION 13.14. Table of Contents, Cross Reference
Table and Headings..........................................116
SIGNATURES...................................................................S-1
APPENDICES
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RULE 144A/REGULATION S APPENDIX
Exhibit 1 -- Legends
EXHIBITS
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EXHIBIT A -- Form of Initial Note
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EXHIBIT B -- Form of Exchange Note and Private Exchange Note
EXHIBIT C -- Form of Guarantee
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INDENTURE, dated as of August 1, 2000, among APPLIED POWER INC. (which
intends to change its name to Acutant Corporation), a Wisconsin corporation(the
"Company"), the Subsidiary Guarantors named herein (the "Subsidiary Guarantors")
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and BANK ONE TRUST COMPANY, N.A., a national banking association, as Trustee
(the "Trustee").
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The Company has duly authorized the creation of an issue of
$200,000,000 13% Series A Senior Subordinated Notes due 2009 in the form of
Initial Notes (as defined below) and, if and when issued in connection with a
registered exchange for such Initial Notes, 13% Series B Senior Subordinated
Notes due 2009 in the form of Exchange Notes (as defined below) and, if and when
issued in connection with a private exchange for such Initial Notes, 13% Senior
Subordinated Private Exchange Notes due 2009 in the form of Private Exchange
Notes (as defined below), and, to provide therefor, the Company and the
Subsidiary Guarantors have duly authorized the execution and delivery of this
Indenture.
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 Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
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"Accounts Receivable Facility" means any credit facility or
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conditional sale contract or similar arrangement providing financing secured
directly or indirectly only by the accounts receivable of the Company or its
Subsidiaries.
"Acquired Indebtedness" of any particular Person means Indebtedness of
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any other Person existing at the time such other Person merged with or into or
became a Restricted Subsidiary of such particular Person or assumed by such
particular Person in connection with the acquisition of assets from any other
person, and not incurred by such other person in connection with, or in
contemplation of, such other Person merging with or into such particular Person
or becoming a Restricted Subsidiary of such particular Person or such
acquisition.
"Additional Assets" means
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(1) any property or assets (other than Indebtedness and Capital
Stock) in a Related Business,
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the
Company or a Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person that
at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clause (2)
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or (3) above is primarily engaged in a Related Business.
"Adjusted Maximum Amount" has the meaning provided in Section
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10.04(b).
"Affiliate" of any specified Person means any other Person, directly
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or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the provisions described in Sections 4.10, 4.12 and 4.15 only,
"Affiliate" shall also mean any beneficial owner of Capital Stock representing
5% or more of the total voting power of the Voting Stock (on a fully diluted
basis) of the Company or of rights or warrants to Purchase such Capital Stock
(whether or not currently exercisable) and any Person who would be an Affiliate
of any such beneficial owner pursuant to the first sentence hereof.
"Affiliate Transaction" has the meaning provided in Section 4.12.
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"Agent" means any Registrar, Paying Agent or co-Registrar.
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"Aggregate Payments" has the meaning provided in Section 10.04(b).
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"Asset Disposition" means any sale, lease, transfer or other
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disposition (or series of related sales, leases,
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transfers or dispositions) by the Company or any Restricted Subsidiary,
including any disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a
"disposition"), of
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(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary),
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary, or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary
(other than, in the case of (1), (2) and (3) above, (x) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Wholly Owned Subsidiary, (y) for purposes of Section 4.15 only,
a disposition that constitutes a Restricted Payment permitted by Section 4.11
and (z) disposition of assets with a fair market value of less than $1.0
million).
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
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as at the time of determination, the present value (discounted at the interest
rate borne by the Notes, compounded annually) of the total obligations of the
lessee for rental payments during the remaining term of the lease included in
such Sale/Leaseback Transaction (including any period for which such lease has
been extended).
"Authenticating Agent" has the meaning provided in Section 2.02.
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"Average Life" means, means, as of the date of determination, with
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respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (x) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (y) the sum of all
such payments.
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"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal,
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state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
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any Subsidiary Guarantor, as applicable, or any committee thereof duly
authorized to act on behalf of such Board.
"Board Resolution" means, with respect to any Person, a copy of a
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resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each day which is not a Legal Holiday.
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"Capital Lease Obligations" means an obligation that is required to be
-------------------------
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
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rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the following
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events:
(1) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the beneficial owner (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that for purposes of this
clause (1) such person shall be deemed to have "beneficial ownership" of
all shares that any such person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the total voting power of
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the Voting Stock of the Company (for the purpose of this clause (1) a
Person shall be deemed to beneficially own the Voting Stock of a
corporation that is beneficially owned (as defined above) by another
corporation (a "parent corporation") if such Person beneficially owns (as
------------------
defined above) at least 50% of the aggregate voting power of all classes of
Voting Stock of such parent corporation);
(2) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a vote of 66-2/3% of the directors of the Company then still in office who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office;
(3) the adoption of a plan relating to the liquidation or dissolution
of the Company; or
(4) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company to another
Person, and, in the case of any such merger or consolidation, the
securities of the Company that are outstanding immediately prior to such
transaction and which represent 100% of the aggregate voting power of the
Voting Stock of the Company are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such securities
are changed into or exchanged for, in addition to any other consideration,
securities of the surviving corporation that represent immediately after
such transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation.
"Change of Control Offer" has the meaning provided in Section 4.14.
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"Change of Control Purchase Date" has the meaning provided in Section
-------------------------------
4.14.
"Change of Control Purchase Price" has the meaning specified in
--------------------------------
Section 4.14.
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"Code" means the Internal Revenue Code of 1986, as amended.
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"Company" means the party named as such in this Indenture until a
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successor replaces it and thereafter means such successor.
"Consolidated Coverage Ratio" as of any date of determination means
---------------------------
the ratio of (x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (y) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period and the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period,
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary has not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness,
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset
-7-
Disposition, the EBITDA for such period shall be reduced by an amount equal
to the EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Disposition for such period, or increased by an
amount equal to the EBITDA (if negative) directly attributable thereto for
such period, and Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in
connection with such Asset Disposition for such period (or, if the Capital
Stock of any Restricted Subsidiary is sold, the Consolidated Interest
Expense for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale),
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such
period.
-8-
For purposes of this definition, whenever pro forma effect is to be
given to any disposition or acquisition of assets, the pro forma calculations of
any expense or cost reductions or other operating improvements shall be
determined in accordance with Regulation S-X promulgated under the Securities
Act. If any Indebtedness bears a floating rate of interest and is being given
pro forma effect, the interest 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 Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated Interest Expense" means, for any period, the total
-----------------------------
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication,
(1) interest expense attributable to capital leases,
(2) amortization of debt discount and debt issuance cost,
(3) capitalized interest,
(4) non-cash interest expenses,
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing,
(6) net costs associated with Hedging Obligations (including
amortization of fees),
(7) Preferred Stock dividends in respect of all Preferred Stock held
by Persons other than the Company or a Wholly Owned Subsidiary,
(8) interest incurred in connection with Investments in discontinued
operations,
(9) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of) the
Company or any Restricted Subsidiary and
-9-
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net income of the
-----------------------
Company and its consolidated Subsidiaries; provided, however, that there shall
-------- -------
not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of cash actually distributed by such Person during such period
to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution
paid to a Restricted Subsidiary, to the limitations contained in
clause (3) below); and
(B) the Company's equity in a net loss of any such Person for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company, except that:
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary
-10-
as a dividend or other distribution (subject, in the case of a
dividend or other distribution paid to another Restricted Subsidiary,
to the limitation contained in this clause); and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition of
any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and
any gain (or loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
(5) extraordinary gains or losses;
(6) the cumulative effect of a change in accounting principles; and
(7) income or loss attributable to discontinued operations (including,
without limitation, operations disposed of during such period whether or
not such operations were classified as discontinued).
Notwithstanding the foregoing, for the purposes of Section 4.10 only, there
shall be excluded from Consolidated Net Income any dividends, repayments of
loans or advances or other transfers of assets from Unrestricted Subsidiaries to
the Company or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (a)(3)(E) thereof.
"Consolidated Net Worth" means the total of the amounts shown on the
----------------------
balance sheet of the Company and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Company ending at least 45 days prior to the taking of any
action for the purpose of which the determination is being made, as:
(1) the par or stated value of all outstanding Capital Stock of the
Company plus;
(2) paid-in capital or capital surplus relating to such Capital Stock
plus;
-11-
(3) any retained earnings or earned surplus less (x) any accumulated
deficit and (y) any amounts attributable to Disqualified Stock.
"covenant defeasance option" has the meaning provided in Section 8.01.
--------------------------
"Credit Facility" means the Credit Agreement (including all documents
---------------
entered into by the Company and any subsidiary of the Company in connection
therewith (including Hedging Obligations)), to be dated on or about the
Effective Date among the Company, Credit Suisse First Boston and the other
agents and lenders named therein, and any other bank credit agreement or similar
facility entered into in the future by the Company or any Restricted Subsidiary,
as any of the same, in whole or in part, may be amended, renewed, extended,
increased (but only so long as such increase is permitted under the terms of
this Indenture), substituted, refinanced, restructured or replaced (including,
without limitation, any successive renewals, extensions, increases,
substitutions, refinancings, restructurings, replacements, supplements or other
modifications of the foregoing).
"Currency Agreement" means in respect of a Person, any foreign
------------------
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
---------
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time
-------
or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
----------
their respective successors.
"Designated Senior Indebtedness" means
------------------------------
(1) the Indebtedness under the Credit Facility; and
(2) 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 $25 million and is specifically
designated by the Company in the instrument evidencing or
-12-
governing such Senior Indebtedness as "Designated Senior Indebtedness" for
purposes of this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
------------------
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or upon the happening of any event
(i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise,
(ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock or
(iii) is redeemable or must be purchased, upon the occurrence of
certain events or otherwise, by such Person at the option of the holder
thereof, in whole or in part,
in each case on or prior to the first anniversary of the Stated Maturity of the
Notes; provided, however, that any Capital Stock that would not constitute
-------- -------
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such Capital Stock, upon the
occurrence of an "asset sale" or "change of control" occurring prior to the
first anniversary of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions applicable to such
Capital Stock are not more favorable to the holders of such Capital Stock
than the terms applicable to the Notes and described in Sections 4.14 and
4.15; and
(2) any such requirement only becomes operative after compliance with such
terms applicable to the Notes, including the purchase of any Notes tendered
pursuant thereto.
"Distribution" means the spin-off of Applied Power Inc.'s integrated
------------
electronics enclosures business as a separate publicly traded company.
"DTC" means The Depository Trust Company, its nominees and their
---
respective successors.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
------
Consolidated Interest Expense plus the follow-
-13-
ing to the extent deducted in calculating such Consolidated Net Income:
(1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries,
(2) depreciation expense of the Company and its consolidated
Restricted Subsidiaries,
(3) amortization expense of the Company and its consolidated
Restricted Subsidiaries (excluding amortization expense attributable to a
prepaid cash item that was paid in a prior period),
(4) non-recurring financing, legal and accounting charges of not more
than $30.0 million relating to the Transactions,
(5) contract termination recoveries of $1.4 million received prior to
the Issue Date,
(6) in the case of any determination that includes one or more fiscal
quarters ending prior to the Issue Date, an amount equal to the excess of
actual general corporate expenses for such fiscal quarters over the product
of $1.25 million times the number of such fiscal quarters included in such
determination, and
(7) all other non-cash charges of the Company and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent
that it represents an accrual of or reserve for cash expenditures in any
future period), in each case for such period.
Notwithstanding the foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and non-cash charges of, a
Restricted Subsidiary shall be added to Consolidated Net Income to compute
EBITDA only to the extent (and in the same proportion) that the net income of
such Restricted Subsidiary was included in calculating Consolidated Net Income
and only if a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to such Restricted
Subsidiary or its stockholders.
-14-
"Effective Date" means the effective date of the Distribution.
--------------
"Event of Default" has the meaning provided in Section 6.01.
----------------
"Excess Cash Flow" means, for any fiscal year of the Company, the
----------------
excess of (a) EBITDA for such fiscal year over (b) the sum, without duplication,
of (i) the amount of any cash income taxes payable by the Company and its
consolidated Restricted Subsidiaries with respect to such fiscal year, (ii)
scheduled cash interest paid (net of cash interest received) by the Company and
its consolidated Restricted Subsidiaries during such fiscal year, (iii) capital
expenditures (as determined in accordance with GAAP) made in cash by the Company
and its consolidated Restricted Subsidiaries during such fiscal year, except to
the extent financed with the proceeds of Indebtedness, net insurance proceeds or
net condemnation awards, (iv) scheduled permanent repayments of Indebtedness
made by the Company and its consolidated Restricted Subsidiaries during such
fiscal year, and (v) mandatory prepayments of the principal of revolving loans
under the Credit Facility during such fiscal year, but only to the extent that
such prepayments by their terms cannot be reborrowed or redrawn and do not occur
in connection with a refinancing of all or any portion of such revolving loans;
provided that, to the extent otherwise included therein, the Net Available Cash
from Asset Dispositions and dispositions resulting in net insurance proceeds or
net condemnation awards shall be excluded from the calculation of Excess Cash
Flow.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
or any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the Appendix.
--------------
"Fair Share" has the meaning provided in Section 10.04(b).
----------
"Fair Share Shortfall" has the meaning provided in Section 10.04(c).
--------------------
"Foreign Restricted Subsidiary" means a Restricted Subsidiary that is
-----------------------------
organized and existing under the laws of a jurisdiction other than the United
States, any state thereof or the District of Columbia.
-15-
"Fraudulent Transfer Laws" has the meaning provided in Section
------------------------
10.04(a).
"Funding Subsidiary Guarantor" has the meaning provided in Section
----------------------------
10.04(b).
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Issue Date, including those set forth
in
(1) the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants,
(2) statements and pronouncements of the Financial Accounting Standards Board,
(3) such other statements by such other entity as approved by a significant
segment of the accounting profession, and
(4) the rules and regulations of the SEC governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports
required to be filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins and similar
written statements from the accounting staff of the SEC.
"guarantee" means any obligation, contingent or otherwise, of any
---------
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness of such Person (whether arising by
virtue of agreements to keep-well, to take-or-pay or to maintain
financial statement conditions or otherwise), or
(ii) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "guarantee" shall not include endorsements for
collection or deposit in the ordinary course
-16-
of business. The term "guarantee" used as a verb has a corresponding meaning.
The term "guarantor" shall mean any Person guaranteeing any obligation.
"Hedging Obligations" of any Person means the obligations of such
-------------------
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
------ ----------
registered on the Registrar's books.
"Incur" means issue, assume, guarantee, incur or otherwise become
-----
liable; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning. The accretion of principal of a
non-interest bearing or other discount security shall not be deemed the
Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
------------
determination (without duplication):
(1) the principal in respect of
(A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other
similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale/Leaseback Transactions entered into by such Person;
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business);
-17-
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
tenth Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock or,
with respect to any Subsidiary of such Person, the liquidation preference
with respect to, any Preferred Stock (but excluding, in each case, any
accrued dividends);
(6) all obligations of the type referred to in clauses (1) through (5)
of other Persons and all dividends of other Persons for the payment of
which, IN either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through (6)
of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time in accordance with the terms hereof.
"Initial Notes" has the meaning provided in the Appendix.
-------------
-18-
"Initial Purchaser" has the meaning provided in the Appendix.
-----------------
"Interest Payment Date" means the stated maturity of an installment of
---------------------
interest on the Notes.
"Interest Rate Agreement" means in respect of a Person any interest
-----------------------
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Investment" by any Person in any other Person means, with respect to
----------
any Person, any direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of the lender) or other extensions of credit
(including by way of guarantee or similar arrangement) or capital contribution
to (by means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments issued
by such other Person. For purposes of the definition of "Unrestricted
Subsidiary", the definition of "Restricted Payment" and Section 4.10,
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
-------- -------
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary equal to an amount (if positive) equal to (x)
the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) 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 of such redesignation; and
(2) 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 of the
Company.
"Issue Date" means the date on which the Notes are originally issued.
----------
-19-
"legal defeasance option" has the meaning provided in Section 8.01.
-----------------------
"Legal Holiday" means a Saturday, a Sunday, any day which is a holiday
-------------
under the laws of the State of New York or the State of Wisconsin or a day on
which banking institutions in the State of New York or the State of Wisconsin
are authorized or required by law to close. If a payment date is a Legal
Holiday, payment shall be made on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, such record date shall not be affected.
"Leverage Ratio" means, at any date of determination, the ratio of
--------------
consolidated Indebtedness of the Company and its consolidated Restricted
Subsidiaries on such date to EBITDA for the period of four consecutive fiscal
quarters of the Company most recently ended as of such date; provided, however,
that
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Leverage Ratio
is an Incurrence of Indebtedness, or both, EBITDA and Indebtedness for such
period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of
such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such
period,
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the Leverage
Ratio, EBITDA and Indebtedness for such period shall be calculated on a pro
forma basis as if such discharge had occurred on the first day of such
period and as if the Company or such Restricted Subsidiary had not earned
the interest income actually earned during such period in respect of cash
or Temporary Cash Investments used to repay, repurchase, defease or
otherwise discharge such Indebtedness,
-20-
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for
such period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to the EBITDA
(if negative) directly attributable thereto for such period, and
Indebtedness for such period shall be reduced by an amount equal to the
Indebtedness directly attributable to any Indebtedness of the Company or
any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or,
if the Capital Stock of any Restricted Subsidiary is sold, the Indebtedness
for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale),
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Indebtedness for such
period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or acquisition
occurred on the first day of such period, and
(5) if since the beginning of such period any Person that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Indebtedness for such period shall be calculated after giving
pro forma effect thereto as if such Asset Disposition, Investment or
acquisition occurred on the first day such period.
For purposes of this definition, whenever pro forma effect is to be
given to any disposition or acquisition of as-
-21-
sets, the pro forma calculations of any expense or cost reductions or other
operating improvements shall be determined in accordance with Regulation S-X
promulgated under the Securities Act. If any Indebtedness bears a floating rate
of interest and is being given pro forma effect, the interest 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 Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"Lien" means any mortgage, pledge, security interest, encumbrance,
----
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Maturity Date" means May 1, 2009.
-------------
"Net Available Cash" from an Asset Disposition means cash payments
------------------
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of
(1) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a liability under GAAP,
as a consequence of such Asset Disposition,
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition,
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition, and
-22-
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
The amounts in clauses (1) through (4) above, to the extent estimates
are necessary, shall be estimated reasonably and in good faith by the Company.
"Net Cash Proceeds," with respect to any issuance or sale of Capital
-----------------
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Notes" means the Initial Notes, the Exchange Notes and the Private
-----
Exchange Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Offering Circular" means the Offering Circular dated July 21, 2000,
-----------------
pursuant to which the $200.0 million aggregate principal amount of 13% Series A
Senior Subordinated Notes due 2009 in the form of Initial Notes were offered,
and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the
-------
Board, the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, the Controller, the Treasurer, or the Secretary of such
Person, or any other officer designated by the Board of Directors serving in a
similar capacity.
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Officers or by an Officer and either a Treasurer or
Assistant Treasurer or an Assistant Secretary of such Person and otherwise
complying with the requirements of Sections 13.04 and 13.05, to the extent they
relate to the making of an Officers' Certificate.
"Opinion of Counsel" means a written opinion from legal counsel, who
------------------
may be an employee or counsel for either or both of the Company, and who is
reasonably acceptable to the
-23-
Trustee complying with the requirements of Sections 13.04 and 13.05, to the
extent they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Permitted Interest Rate or Currency Agreement" of any Person means
---------------------------------------------
any Interest Rate or Currency Agreement entered into with one or more financial
institutions in the ordinary course of business that is designed to protect such
Person against fluctuations in interest rates or currency exchange rates with
respect to Indebtedness Incurred and which shall have a notional amount no
greater than the payments due with respect to the Indebtedness being hedged
thereby, or in the case of currency protection agreements, against currency
exchange rate fluctuations in the ordinary course of business relating to then
existing financial obligations or then existing or sold production and not for
purposes of speculation.
"Permitted Investment" means an Investment by the Company or any
--------------------
Restricted Subsidiary in
(1) the Company, a Subsidiary Guarantor, a Wholly Owned Subsidiary or
a Person that will, upon the making of such Investment, become a Wholly
Owned Subsidiary; provided, however, that the primary business of such
Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company, a Subsidiary Guarantor or
a Wholly Owned Subsidiary; provided, however, that such Person's primary
business is a Related Business;
(3) Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ul-
-24-
timately to be treated as expenses for accounting purposes and that are
made in the ordinary course of business;
(6) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments;
(7) any consolidation or merger of a Wholly Owned Subsidiary of the
Company to the extent otherwise permitted under this Indenture;
(8) any investment made as a result of the receipt of non-cash
consideration from an Asset Disposition that was made pursuant to and in
compliance with Section 4.15;
(9) Investments in Permitted Interest Rate or Currency Agreements;
(10) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (10) since the date of this
Indenture, not to exceed $5.0 million.
"Person" means any individual, corporation, partnership, limited
------
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock," as applied to the Capital Stock of any Person,
---------------
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of a Note means the principal of the Note plus the
---------
premium, if any, payable on the Note which is due or overdue or is to become due
at the relevant time.
"Private Exchange Notes" has the meaning provided in the Appendix.
----------------------
-25-
"Public Equity Offering" means an underwritten primary public offering
----------------------
of common stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Record Date" means each Record Date specified in the Notes, whether
-----------
or not a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed,
---------------
means the date fixed for such redemption pursuant to this Indenture and the
Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
----------------
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Refinance" means, in respect of any Indebtedness, to refinance,
---------
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
------------------------
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that
(1) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced,
(2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced, and
(3) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced;
provided, further, however, that Refinancing Indebtedness shall not include (x)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (y)
Indebtedness of the Company
-26-
or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted
Subsidiary.
"Registrar" has the meaning provided in Section 2.03.
---------
"Registration Rights Agreement" has the meaning set forth in the
-----------------------------
Appendix.
"Regulation S" means Regulation S under the Securities Act.
------------
"Related Business" means any business related, ancillary or
----------------
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Representative" means any trustee, agent or representative (if any)
--------------
for an issue of Senior Indebtedness of the Company.
"Restricted Payment" with respect to any Person means
------------------
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its Capital
Stock (other than dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and dividends or distributions
payable solely to the Company or a Restricted Subsidiary, and other than
pro rata dividends or other distributions made by a Subsidiary that is not
a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)),
(2) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock),
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sink-
-27-
ing fund payment of any Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the date of
acquisition), or
(4) the making of any Investment in any Person (other than a
Permitted Investment).
"Restricted Subsidiary" means any Subsidiary of the Company that is
---------------------
not an Unrestricted Subsidiary.
"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 Restricted Subsidiary
transfers such property to a Person and the Company or a Restricted Subsidiary
leases it from such Person.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
successor statute or statutes thereto.
"Senior Indebtedness" of a Person means
-------------------
(1) Indebtedness of such Person, whether outstanding on the Issue Date
or thereafter Incurred,
(2) accrued and unpaid interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization
relating to such Person to the extent post-filing interest is allowed in
such proceeding) in respect of (A) indebtedness of such Person for money
borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
other similar instruments for the payment of which such Person is
responsible or liable unless, in the case of (1) and (2), in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are subordinate in right
of payment to the Notes, and
(3) obligations of such Person under the Credit Facility;
provided, however, that Senior Indebtedness shall not include
-28-
(1) any obligation of such Person to any Subsidiary,
(2) any liability for Federal, state, local or other taxes owed or
owing by such Person,
(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),
(4) any Indebtedness of such Person (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior in any respect
to any other Indebtedness or other obligation of such Person, or
(5) that portion of any Indebtedness which at the time of Incurrence
is Incurred in violation of this Indenture.
"Senior Subordinated Indebtedness" means (i) with respect to the
--------------------------------
Company, the Notes and any other Indebtedness of the Company that specifically
provides that such Indebtedness is to have the same rank as the Notes 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
and (ii) with respect to any Subsidiary Guarantor, the Subsidiary Guarantees and
any other Indebtedness of such Subsidiary Guarantor that specifically provides
that such Indebtedness is to have the same rank as the Subsidiary Guarantees in
right of payment and is not subordinated by its term in right or payment to any
Indebtedness or other obligation of such Subsidiary Guarantor which is not
Senior Indebtedness.
"Significant Subsidiary" means any Restricted Subsidiary that would be
----------------------
a "Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
---------------
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
-29-
"Subordinated Obligation" means any Indebtedness of the Company
-----------------------
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes pursuant to a written
agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
----------
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by
(1) such Person,
(2) such Person and one or more Subsidiaries of such Person, or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means a guarantee by a Subsidiary Guarantor of
--------------------
the Company's obligations with respect to the Notes.
"Subsidiary Guarantors" means (1) each of the Company's Restricted
---------------------
Subsidiaries providing guarantees under the Credit Facility on the Issue Date
and (2) any Person that becomes a Restricted Subsidiary of the Company and
provides a guarantee under the Credit Facility that pursuant to Section 4.16 or
otherwise in the future executes a supplemental indenture in which such
Restricted Subsidiary unconditionally guarantees on a senior subordinated basis
the Company's obligations under the Notes and this Indenture; provided that any
Person constituting a Subsidiary Guarantor as described above shall cease to
constitute a Subsidiary Guarantor when its respective Subsidiary Guarantee is
released in accordance with the terms of this Indenture.
"Successor Company" shall have the meaning provided in Section 5.01.
-----------------
"Temporary Cash Investments" means any of the following:
--------------------------
(1) any investment in direct obligations of the United States of
America or any agency thereof or obliga-
-30-
tions guaranteed by the United States of America or any agency thereof,
(2) investments in time deposit accounts, certificates of deposit and
money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company which is organized under the laws
of the United States of America, any state thereof or any foreign country
recognized by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50,000,000
(or the foreign currency equivalent thereof) and has outstanding debt which
is rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule
436 under the Securities Act) or any money-market fund sponsored by a
registered broker dealer or mutual fund distributor,
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above,
(4) investments in commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Group, and
(5) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service,
Inc.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
---
Sections 77aaa-77bbbb), as in effect on the date of this Indenture.
"Trust Officer" means any authorized officer of the Trustee assigned
-------------
by the Trustee to administer this Indenture,
-31-
or in the case of a successor trustee, an authorized officer assigned to the
department, division or group performing the corporation trust work of such
successor and assigned to administer this Indenture.
"Trustee" means the party named as such in this Indenture until a
-------
successor replaces it in accordance with the provisions of this Indenture and
thereafter means such successor.
"Unrestricted Subsidiary" means
-----------------------
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below, and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Capital
Stock or Indebtedness of, or holds any Lien on any property of, the Company or
any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under the
covenant described under Section 4.10.
The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary; provided, however, that immediately after giving effect
to such designation (x) the Company could Incur $1.00 of additional Indebtedness
under paragraph (a) of Section 4.13 and (y) no Default shall have occurred and
be continuing. Any such designation by the Board of Directors shall be
evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary amount in
----------------------
a currency other than U.S. dollars, at any time for determination thereof, the
amount of U.S. dollars obtained by converting such foreign currency involved in
such computation into U.S. dollars at the spot rate for the purchase
-32-
of U.S. dollars with the applicable foreign currency as published in The Wall
Street Journal in the "Exchange Rates" column under the heading "Currency
Trading" on the date two Business Days prior to such determination.
Except as described in Section 4.13, whenever it is necessary to
determine whether the Company has complied with any covenant in this Indenture
or a Default has occurred and an amount is expressed in a currency other than
U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent
determined as of the date such amount is initially determined in such currency.
"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 at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States
-----------------
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" of a Person means all classes of Capital Stock or other
------------
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
-----------------------
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Incorporation by Reference of TIA.
---------------------------------
Whenever this Indenture refers to a provision of the TIA, such
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:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
-33-
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
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 GAAP as in effect from time to time;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) "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; and
(6) reference to Sections or Articles means reference to such
Section or Article in this Indenture, unless stated otherwise.
SECTION 1.04. One Class of Securities.
-----------------------
The Initial Notes, the Private Exchange Notes, if any, and the
Exchange Notes shall vote and consent together on all matters as one class and
none of the Initial Notes, the Private Exchange Notes, if any, or the Exchange
Notes shall have the right to vote or consent as a separate class on any matter.
-34-
ARTICLE TWO
THE NOTES
SECTION 2.01. Form and Dating.
---------------
(a) Provisions relating to the Initial Notes, the Private Exchange
Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S
Appendix attached hereto (the "Appendix"), which is hereby incorporated in and
--------
expressly made a part of this Indenture. The Initial Notes and the
corresponding Trustee's certificate of authentication shall be substantially in
the form of Exhibit A hereto. The Exchange Notes, the Private Exchange Notes
---------
and the corresponding Trustee's certificate of authentication shall be
substantially in the form of Exhibit B hereto. The Notes may have notations,
---------
legends or endorsements required by law, stock exchange rule, agreements to
which the Company are subject, if any, or depository rule or usage. The Company
shall approve the forms of the Notes and any notation, legend or endorsement on
them. Each Note shall be dated the date of its issuance and shall show the date
of its authentication.
(b) The terms and provisions contained in the Appendix and in the
forms of the Notes, annexed hereto as Exhibits A and B, shall constitute, and
---------- -
are hereby expressly made, a part of this Indenture and, to the extent
applicable, the Company, the Subsidiary Guarantors and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
SECTION 2.02. Execution and Authentication; Aggregate
Principal Amount.
---------------------------------------
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.
If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.
-35-
On the Issue Date, the Trustee shall authenticate and deliver $200.0
million of 13% Series A Senior Subordinated Notes due 2009 in the form of
Initial Notes. In addition, at any time, and from time to time, the Trustee
shall authenticate and deliver Notes upon a written notice of the Company, for
original issuance in the aggregate principal amount specified in such order for
original; provided that Exchange Notes and Private Exchange Notes shall be
issuable only upon the valid surrender for cancellation of such Initial Notes of
a like aggregate principal amount. Any such order shall specify the amount of
the Notes to be authenticated and the date on which the original issue of Notes
is to be authenticated.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee may appoint an authenticating agent (the "Authenticating
--------------
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
-----
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
--------------------------
The Company shall maintain or designate an office or agency in
accordance with Section 4.02 (which shall be located in the Borough of Manhattan
in the City of New York, State of New York and which may be the office of the
Trustee) where Notes may be presented or surrendered for registration of
transfer or for exchange ("Registrar") and Notes may be presented or surrendered
---------
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
------------
and of their transfer and exchange. The Company may have one or more co-
Registrars and one or more additional paying agents. The term "Paying Agent"
includes any additional Paying Agent. Either the Company or any of its
Affiliates may act as Paying Agent or Registrar, except that for purposes of
Articles Three and Eight and Sections 4.14, 4.15 and 4.23, neither the Company
nor any of
-36-
the Subsidiary Guarantors or their respective Affiliates shall act as Paying
Agent. The Company may change any Paying Agent or Registrar without notice to
any Holder.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and 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.
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. The Paying Agent or Registrar may resign upon 30 days notice to the
Company.
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 the Holders or the Trustee all assets held by the Paying Agent for the
payment of principal of, or interest on, the Notes (whether such assets have
been distributed to it by the Company, the Subsidiary Guarantors or any other
obligor on the Notes), and the Company and the Paying Agent shall notify the
Trustee of any Default by the Company or the Subsidiary Guarantors (or any other
obligor on the Notes) 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 to
account for any assets disbursed. The Trustee may, and upon direction of a
majority of the Holders shall, 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, the Subsidiary Guarantors or any other obligor on
the Notes to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
SECTION 2.05. Noteholder 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
the Holders, and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Reg-
-37-
istrar, the Company shall furnish or cause the Registrar to furnish to the
Trustee before each 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 the Holders, which list may be
conclusively relied upon by the Trustee and the Company shall otherwise comply
with TIA Section 312(a).
SECTION 2.06. Replacement Notes.
-----------------
If a mutilated Note is surrendered to the Trustee or if the Holder of
a Note claims that the Note has been lost, destroyed or wrongfully taken,
subject to the terms of the next succeeding sentence, the Company shall issue
and the Trustee shall authenticate a replacement Note if the Trustee's
reasonable requirements for replacement Notes are met. If required by the
Trustee or the Company, such Holder must provide an affidavit of lost
certificate and an indemnity bond or other indemnity, sufficient in the judgment
of both the Company and the Trustee, to protect the Company, the Trustee, any
Agent or any Authenticating Agent from any loss which any of them may suffer if
a Note is replaced. The Company and the Trustee may charge such Holder for
their out-of-pocket expenses in replacing a Note, including reasonable fees and
expenses of counsel, and for any tax that may be imposed in replacing such
Notes. Every replacement Note shall constitute an additional obligation of the
Company and shall be entitled to all benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.07. Outstanding Notes.
-----------------
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding.
Subject to the provisions of Section 2.08, a Note does not cease to be
outstanding because the Company, any Subsidiary Guarantor or any of their
respective Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.06 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.06.
-38-
Except as otherwise provided in Article Eight of this Indenture, if on
a Redemption Date or the Maturity Date the Paying Agent holds U.S. Legal Tender
or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes shall cease to be outstanding and interest on
them shall cease to accrue.
SECTION 2.08. Treasury Notes.
--------------
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company, any Subsidiary Guarantor or any of their respective Affiliates
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver, consent or notice, only Notes which a Trust Officer of
the Trustee actually knows are so owned shall be so considered. The Company
shall promptly give the Trustee written notice upon the acquisition by the
Company, any Subsidiary Guarantor or any of their respective Affiliates of any
Notes.
SECTION 2.09. Temporary Notes.
---------------
Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall, upon receipt of a written order by the Company,
authenticate temporary Notes. The Company's order to authenticate shall specify
the amount of temporary Notes to be authenticated and the date on which the
temporary Notes are to be authenticated. Temporary Notes shall be substantially
in the form of definitive Notes but may have variations that the Company
consider appropriate for temporary Notes. 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 Notes in
exchange for, and upon surrender of, temporary Notes. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes authenticated and delivered hereunder.
SECTION 2.10. Cancellation.
------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for
-39-
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, shall dispose of all Notes surrendered for
transfer, exchange, payment or cancellation. Subject to Section 2.06, the
Company may not issue new Notes to replace Notes that it has paid or delivered
to the Trustee for cancellation. If the Company shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Notes unless and until the same are surrendered
to the Trustee for cancellation pursuant to this Section 2.10.
SECTION 2.11. Defaulted Interest.
------------------
If the Company defaults in a payment of interest on the Notes (without
regard to any grace period therefor), 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
no less than 10 days 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, as of a recent date selected by the Company,
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.
Alternatively, the Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such notice as
may be required by such exchange, if, after notice given by the Company to the
Trustee and the Paying Agent of the proposed payment pursuant to this clause,
such manner shall be deemed practicable by the Trustee and the Paying Agent.
SECTION 2.12. CUSIP Number.
------------
The Company in issuing the Notes may use "CUSIP" numbers, and if so,
the Trustee shall use such CUSIP numbers in notices of redemption or exchange as
a convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of such CUSIP numbers
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers
-40-
printed on the Notes. The Company shall promptly notify the Trustee of any
change in a CUSIP number.
SECTION 2.13. Deposit of Moneys.
-----------------
Prior to 9:00 a.m. New York City time on each Interest Payment Date
and on the Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds U.S. Legal Tender sufficient to make cash payments,
if any, due on such Interest Payment Date or 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 or Maturity Date, as the case may be.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
------------------
If the Company elects to redeem Notes pursuant to Section 3.07 of this
Indenture and Paragraph 5 of the Notes, it shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the principal amount of the
Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01
at least 45 days before the Redemption Date (unless a shorter notice period
shall be satisfactory to the Trustee, as evidenced in a writing signed on behalf
of the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 3.02. Selection of Notes To Be Redeemed.
---------------------------------
If fewer than all of the Notes are to be redeemed, selection of the
Notes to be redeemed will be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not then listed on a national securities
exchange, on a pro rata basis, by lot or in such other fair and reasonable
manner chosen at the discretion of the Trustee; provided, however, that if a
partial redemption is made with the proceeds of a Public Equity Offering,
selection of the Notes or portion thereof for redemption shall be made by
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the Trustee only on a pro rata basis, unless such method is otherwise
prohibited.
The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 may be redeemed only in whole. The Trustee may
select for redemption portions (equal to $1,000 or any integral multiple
thereof) of the principal of Notes that have denominations larger than $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
SECTION 3.03. Notice of Redemption.
--------------------
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder whose Notes are to be redeemed at
its registered address, with a copy to the Trustee and any Paying Agent. At the
Company's written request no less than 35 days prior to the Redemption Date (or
such shorter period as may be acceptable to the Trustee), the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any,
to be paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes and/or Section of this Indenture
pursuant to which such redemption is being made;
(5) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the Redemption Date,
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and the only remaining right of the Holders of such Notes is to receive
payment of the Redemption Price plus accrued interest, if any, upon
surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(8) if fewer than all the Notes are to be redeemed, the aggregate
principal amount of Notes to be redeemed and the aggregate principal amount
of Notes to be outstanding after such partial redemption and, if the
redemption is not made pro rata, the identification of the particular Notes
(or portion thereof) to be redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed on
the Notes.
SECTION 3.04. Effect of Notice of Redemption.
------------------------------
Once notice of redemption is mailed in accordance with Section 3.03,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest to the Redemption Date payable thereon,
if any. Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price.
---------------------------
On or before 9:00 a.m. New York City time on the Redemption Date, the
Company shall deposit with Trustee or Paying Agent in immediately available
funds U.S. Legal Tender sufficient to pay the Redemption Price plus accrued
interest, if any, of all Notes to be redeemed on that date (other than Notes or
portions of Notes called for redemption which have been delivered by the Company
to the Trustee for cancellation). The Trustee or Paying Agent shall promptly
return to the Company any U.S. Legal Tender so deposited which is not required
for that purpose, except with respect to monies owed as obligations to the
Trustee pursuant to Article Seven.
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If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 3.06. Notes Redeemed in Part.
----------------------
Upon surrender of a Note that is to be redeemed in part, the Company
shall execute and the Trustee shall authenticate for the Holder a new Note or
Notes equal in principal amount to the unredeemed portion of the Note
surrendered.
SECTION 3.07. Optional Redemption.
-------------------
The Notes shall not be redeemable at the Company's option except as
set forth in the optional redemption provisions set forth in Paragraph 5 of the
Notes.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Notes.
----------------
The Company shall pay or cause to be paid the principal of and
interest on the Notes on the dates and in the manner provided in the Notes and
in this Indenture. An installment of principal of or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company, any Subsidiary Guarantor or any of their respective
Affiliates) holds on that date U.S. Legal Tender designated for and sufficient
to pay the installment in full and is not prohibited from paying such money to
the Holders pursuant to the terms of this Indenture.
SECTION 4.02. Maintenance of Office or Agency.
-------------------------------
The Company shall maintain in the Borough of Manhattan, the City of
New York, an the office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-registrar) where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company or the Subsidiary Guarantors in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the
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location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such additional
designations, provided that no such designation or recission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York. The Company shall give prompt
written notice to the Trustee of any such designation or recission and of any
change in the location of any such other office or agency.
The Company hereby designates the corporate trust office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
SECTION 4.03. Corporate Existence.
-------------------
Except as otherwise permitted by Article Five, the Company shall do or
shall cause to be done, at its own cost and expense, all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate, limited liability company or partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each of them (as the same may be amended from time to time) and the material
rights (charter and statutory) and franchises of the Company and the Restricted
Subsidiaries; provided, however, that the Company or any Restricted Subsidiary
shall not be required to preserve any right or franchise, or the corporate,
limited liability company, partnership or other existence of any Restricted
Subsidiary, if the Board of Directors of the Company shall in its sole
discretion determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries, taken as
a whole.
SECTION 4.04. Payment of Taxes and Other Claims.
---------------------------------
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and
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additions to taxes) levied or imposed upon it or any of its Restricted
Subsidiaries or properties of it or any of its Restricted Subsidiaries and (ii)
all lawful claims for labor, materials and supplies that, if unpaid, might by
law become a Lien upon the property of it or any of its Restricted Subsidiaries;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings properly instituted and diligently conducted for which
reserves, to the extent required under and in accordance with GAAP, have been
taken.
SECTION 4.05. Maintenance of Properties and Insurance.
---------------------------------------
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its or their material properties in good working order
and condition (subject to ordinary wear and tear) and make all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto; provided, however, that nothing in this Section 4.05 shall prevent the
Company or any of its Restricted Subsidiaries from discontinuing the operation
and maintenance of any of its or their properties, if such discontinuance is, in
the reasonable good faith judgment of the Company, desirable in the conduct of
the business of the Company and its Restricted Subsidiaries, taken as a whole.
(b) The Company shall provide, or cause to be provided, for itself
and each of its Restricted Subsidiaries, insurance (including appropriate self-
insurance) against loss or damage of the kinds that, in the reasonable, good
faith judgment of the Board of Directors of the Company is adequate and
appropriate for the conduct of the business of the Company and its Restricted
Subsidiaries.
SECTION 4.06. Compliance Certificate; Notice of Default.
-----------------------------------------
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company and the Subsidiary Guarantors have kept,
observed, performed and fulfilled their obligations under this Indenture and
further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge, neither the Company nor any Subsidiary
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Guarantor is in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company or such
Subsidiary Guarantors is taking or proposes to take with respect thereto).
SECTION 4.07. Compliance with Laws.
--------------------
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of its and their respective businesses and the ownership of its and
their respective properties, except for such noncompliances as are not in the
aggregate reasonably likely to have a material adverse effect on the financial
condition or results of operations of the Company and its Restricted
Subsidiaries, taken as a whole.
SECTION 4.08. SEC Reports.
-----------
Whether or not subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company shall file with the SEC (unless such
filing is not permitted under the Exchange Act) within the time periods
specified in the SEC's rules and regulations and provide the Trustee and the
holders of the Notes, within 15 days thereafter, with such annual reports and
such information, documents and other reports as are specified in Sections 13
and 15(d) of the Exchange Act and applicable to a U.S. corporation subject to
such Sections.
In addition, for so long as any Notes remain outstanding, the Company
shall furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act, and, to any beneficial owner of
Notes, if not obtainable from the SEC, information of the type that would be
filed with the SEC pursuant to the foregoing provisions, upon the request of any
such holder.
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead,
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or in any manner whatsoever claim or take the benefit or advantage of, any stay
or extension law or any usury law or other law that would prohibit or forgive
the Company from paying all or any portion of the principal of or interest on
the Notes as contemplated herein, wherever enacted, now or at any time hereafter
in force, or which may affect the covenants or the performance of this
Indenture; and (to the extent that it may lawfully do so) the Company hereby
expressly waives all benefit or advantage of any such law, and covenant that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 4.10. Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is not able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 4.13 or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter immediately following the fiscal quarter during which the
Issue Date occurred to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment
for which the financial statements have either been included in a
report filed with the SEC or filed with the Trustee (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit);
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of the Company and other than
-48-
an issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit
of their employees);
(C) 100% of the aggregate Net Cash Proceeds received by the
Company from the issue, sale or exercise of its Capital Stock (other
than Disqualified Stock) to or by an employee stock ownership plan
subsequent to the Issue Date; provided, however, that if such employee
stock ownership plan Incurs any Indebtedness to finance the purchase
or exercise of such Capital Stock, such Net Cash Proceeds shall be
included only to the extent that any such proceeds are equal to any
increase in the Consolidated Net Worth resulting from principal
repayments made by such employee stock ownership plan with respect to
Indebtedness Incurred by it to finance the purchase or exercise of
such Capital Stock;
(D) the amount by which Indebtedness of the Company or its
Restricted Subsidiaries (other than Indebtedness owed to the Company
or a Restricted Subsidiary) is reduced on the Company's balance sheet
upon the conversion or exchange (other than by a Subsidiary of the
Company) subsequent to the Issue Date of any Indebtedness of the
Company or its Restricted Subsidiary convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company (less the
amount of any cash, or the fair value of any other property,
distributed by the Company upon such conversion or exchange); and
(E) an amount equal to the sum of (1) the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances or other transfers of assets, in each
case to the Company or any Restricted Subsidiary from Unrestricted
Subsidiaries, and (2) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the
net assets of an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary; provided, however,
that the foregoing sum shall not exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously made
(and treated as a Restricted Payment) by the Company
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or any Restricted Subsidiary in such Unrestricted Subsidiary.
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(1) any acquisition of any Capital Stock or Subordinated Obligation
of the Company made out of the proceeds of the substantially concurrent
sale of, or made by exchange for, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a
Subsidiary of the Company or an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the benefit of
their employees); provided, however, that (A) such acquisition of Capital
Stock shall be excluded in the calculation of the amount of Restricted
Payments and (B) the Net Cash Proceeds from such sale shall be excluded
from the calculation of amounts under clause (3)(B) of paragraph (a) above;
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness of the Company which is permitted to be Incurred pursuant
to Section 4.13; provided, however, that such purchase, repurchase,
redemption, defeasance or other acquisition or retirement for value shall
be excluded in the calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this covenant, provided, however, that at the time of payment of such
dividend, no other Default shall have occurred and be continuing (or result
therefrom); provided, further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(4) the acquisition by the Company of shares of common stock of the
Company to be contributed by the Company on behalf of its employees to
employee benefit programs; provided that in each such case the amount to be
purchased shall not exceed 5% of the compensation of such employee in any
fiscal year; provided, further, however, that such
-50-
acquisitions shall be excluded in the calculation of the amount of
Restricted Payments; or
(5) the Company or any Restricted Subsidiary of the Company from
making Restricted Payments, in addition to Restricted Payments permitted by
clause (1) through (4) above, not in excess of $5.0 million in the
aggregate after the date of this Indenture.
SECTION 4.11. Limitation on Restrictions on Distributions
from Restricted Subsidiaries.
-------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, create or otherwise cause or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (a) pay dividends or make any other distributions on its Capital
Stock to the Company or a Restricted Subsidiary or pay any Indebtedness owed to
the Company or any other Restricted Subsidiary, (b) make any loans or advances
to the Company or (c) transfer any of its property or assets to the Company or
any other Restricted Subsidiary, except:
(1) any encumbrance or restriction pursuant to an agreement in effect
at or entered into on the Issue Date, including the Credit Facility;
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred
by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred as consideration in, or to provide all or any portion of the funds
or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company) and outstanding on
such date;
(3) any encumbrance or restriction pursuant to an agreement effecting
a Refinancing of Indebtedness Incurred pursuant to an agreement referred to
in clause (1) or (2) of this covenant or this clause (3) or contained in
any amendment to an agreement referred to in clause (1) or (2) of this
covenant or this clause (3); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in any
such refinancing agreement or amendment are no less favorable to the
-51-
Noteholders than encumbrances and restrictions with respect to such
Restricted Subsidiary contained in such predecessor agreements;
(4) any such encumbrance or restriction consisting of customary non-
assignment provisions in leases governing leasehold interests to the extent
such provisions restrict the transfer of the lease or the property leased
hereunder;
(5) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages; and
(6) any restriction with respect to a Restricted 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 Restricted Subsidiary
pending the closing of such sale or disposition.
SECTION 4.12. Limitation on Transactions with Affiliates.
------------------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property, employee compensation
arrangements or the rendering of any service) with any Affiliate of the Company
(an "Affiliate Transaction") unless the terms thereof
---------------------
(1) are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an
Affiliate;
(2) if such Affiliate Transaction involves an amount in excess of
$2.0 million, (x) are set forth in writing and (y) have been approved by a
majority of the members of the Board of Directors having no personal stake
in such Affiliate Transaction; and
(3) if such Affiliate Transaction involves an amount in excess of
$10.0 million, have been determined by a nationally recognized investment
banking firm to be fair, from a financial standpoint, to the Company and
its Restricted Subsidiaries.
-52-
(b) The provisions of the foregoing paragraph (a) shall not prohibit:
(1) any Restricted Payment permitted to be paid pursuant to Section
4.10;
(2) any employment agreement or employee benefit arrangement with any
officer or director entered into in the ordinary course of business and
consistent with past practice;
(3) the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or its
Restricted Subsidiaries;
(4) any Affiliate Transaction between the Company and a Wholly Owned
Subsidiary or between Wholly Owned Subsidiaries;
(5) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
(6) reasonable and customary indemnification of officers and
directors of the Company or any Restricted Subsidiary pursuant to bylaws,
statutory provisions or indemnification agreements;
(7) purchases and sales of goods and services in the ordinary course
of business on terms customary in the industry;
(8) any transaction pursuant to agreements in effect on the Issue
Date; and
(9) written agreements entered into or assumed in connection with
acquisitions of other businesses with persons who were not Affiliates prior
to such transactions.
SECTION 4.13. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided,
however, that the Company and the Subsidiary Guarantors may Incur Indebtedness
if, on the date of such Incurrence and after giving effect thereto on a pro
forma basis, no Default or Event of Default has occurred and is continuing and
the Consolidated Coverage Ratio exceeds 2.25 to 1.0.
-53-
(b) Notwithstanding the foregoing paragraph (a), so long as no
Default or Event of Default has occurred and is continuing, the Company and the
Restricted Subsidiaries may Incur any or all of the following Indebtedness:
(1) Indebtedness of the Company and any borrower under the Credit
Facility incurred pursuant to the Credit Facility; provided, however, that,
after giving effect to any such Incurrence, the aggregate principal amount
of such Indebtedness then outstanding does not exceed (a) in the case of
the term loan facilities, $240.0 million at any one time outstanding, less
the sum of all permanent repayments or reductions in commitments (so long
as and to the extent that any required payments in connection therewith are
actually made) theretofore made with respect to such Indebtedness, and (b)
in the case of the revolving loan facility, the greater of (i) $100.0
million at any one time outstanding and (ii) the sum of (a) 50% of the book
value of the inventory of the Company and its Restricted Subsidiaries and
(b) 85% of the book value of the accounts receivable of the Company and its
Restricted Subsidiaries;
(2) Indebtedness owed to and held by the Company or a Wholly Owned
Subsidiary; provided, however, that: (A) any subsequent issuance or
transfer of any Capital Stock which results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any subsequent
transfer of such Indebtedness (other than to the Company or a Wholly Owned
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the obligor thereon, and (B) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all obligations with respect to the
Notes;
(3) the Notes, the Exchange Notes and the Private Exchange Notes and
the Subsidiary Guarantees;
(4) Indebtedness of the Company of any of its Restricted Subsidiaries
outstanding on the Issue Date (other than Indebtedness described in clause
(1), (2) or (3) of this Section 4.13(b)) other than Indebtedness to be
repaid from the proceeds of the sale of the Notes and the Credit Facility
as described in the Offering Circular;
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Re
-54-
stricted Subsidiary was acquired by the Company or another Restricted
Subsidiary (other than Indebtedness Incurred in connection with, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or was
acquired by the Company or other Restricted Subsidiary); provided, however,
that on the date of such acquisition, and after giving effect thereto, the
Company would have been able to Incur at least $1.00 of additional
Indebtedness pursuant to clause (a) above;
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) above or pursuant to clause (3), (4) or (5) above
or this clause (6); provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly Refinances Indebtedness of a Subsidiary
Incurred pursuant to clause (5) above, such Refinancing Indebtedness shall
be Incurred only by such Subsidiary;
(7) Indebtedness consisting of Permitted Interest Rate or Currency
Price Agreements;
(8) Indebtedness consisting of guarantees provided by the Company of
Indebtedness of current employees incurred to purchase Capital Stock of the
Company pursuant to the Company's employee stock purchase plan in an amount
not to exceed $6.0 million at any one time outstanding;
(9) Indebtedness of Foreign Restricted Subsidiaries in an aggregate
principal amount which, together with all other Indebtedness of such
Foreign Restricted Subsidiaries outstanding on the date of such Incurrence
does not exceed $15.0 million; provided, that the Indebtedness outstanding
under this clause (9) when added to any Indebtedness outstanding pursuant
to clause (10) below does not exceed $20.0 million; and
(10) Indebtedness of the Company in an aggregate principal amount
which, together with all other Indebtedness of the Company outstanding on
the date of such Incurrence (other than Indebtedness permitted by clauses
(1) through (9) above or paragraph (a)) does not exceed $15.0 million;
provided, that the Indebtedness outstanding under this clause (10) when
added to any Indebtedness out-
-55-
standing pursuant to clause (9) above does not exceed $20.0 million.
(c) Notwithstanding the foregoing, none of the Company or any
Subsidiary Guarantor shall Incur any Indebtedness pursuant to the foregoing
paragraph (b) if the proceeds thereof are used, directly or indirectly, to
Refinance any Subordinated Obligations of the Company or any Subsidiary
Guarantor unless such Indebtedness shall be subordinated to the Notes or the
applicable Guarantee to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with the foregoing
covenant, (1) in the event that an item of Indebtedness meets the criteria of
more than one of the types of Indebtedness described above, the Company, in its
sole discretion, will classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of the above clauses and
(2) an item of Indebtedness may be divided and classified in more than one of
the types of Indebtedness described above.
(e) For purposes of determining compliance with any U.S. dollar
denominated restriction on the Incurrence of Indebtedness where the Indebtedness
Incurred is denominated in a different currency, the amount of such Indebtedness
will be the U.S. Dollar Equivalent determined on the date of the Incurrence of
such Indebtedness, provided, however, that if any such Indebtedness denominated
in a different currency is subject to a Permitted Interest Rate or Currency
Agreement with respect to U.S. dollar covering all principal, premium, if any,
and interest payable on such Indebtedness, the amount of such Indebtedness
expressed in U.S. dollar will be as provided in such Permitted Interest Rate or
Currency Agreement. The principal amount of any Refinancing Indebtedness
Incurred in the same currency as the Indebtedness being Refinanced will be the
U.S. Dollar Equivalent of the Indebtedness Refinanced, except to the extent that
(i) such U.S. Dollar Equivalent was determined based on a Permitted Interest
Rate or Currency Agreement, in which case the Refinancing Indebtedness will be
determined in accordance with the preceding sentence, and (ii) the principal
amount of the Refinancing Indebtedness exceeds the principal amount of the
Indebtedness being Refinanced, in which case the U.S. Dollar Equivalent of such
excess will be determined on the date such Refinancing Indebtedness is Incurred.
-56-
SECTION 4.14. Change of Control.
-----------------
(a) Upon a Change of Control, each Holder shall have the right to
require that the Company repurchase all or any part of such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount thereof plus
accrued and unpaid interest, if any, thereon to the date of purchase, in
accordance with the terms contemplated in Section 4.14(b).
(b) Within 30 days following any Change of Control, unless the
Company shall have provided an irrevocable notice of redemption to the Trustee
with respect to a redemption of all the outstanding Notes at a time when such
redemption is permitted under this Indenture pursuant to the provisions of
Sections 3.03 and 3.04, the Company shall mail a notice to each Holder with a
copy to the Trustee (the "Change of Control Offer") stating:
-----------------------
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Notes at a
purchase price in cash equal to 101% of the principal amount (the "Change
------
of Control Purchase Price") thereof plus accrued and unpaid interest, if
-------------------------
any, to the date of purchase (subject to the right of holders of record on
the relevant record date to receive interest on the relevant interest
payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization after giving effect to such Change of
Control);
(3) the repurchase date (the "Change of Control Purchase
--------------------------
Date")(which shall be no earlier than 30 days nor later than 60 days from
the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with the
covenant described hereunder, that a Holder must follow in order to have
its Notes purchased.
The Company shall not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
-57-
(c) On or before the Change of Control Purchase Date, the Company
shall, to the extent lawful, (i) accept for payment Notes or portions thereof
properly tendered and not validly withdrawn pursuant to the Change of Control
Offer (together with the appropriate form as provided for in Exhibit A or B),
--------- -
(ii) deposit with the Trustee or Paying Agent an amount in U.S. Legal Tender
sufficient to pay the Change of Control Purchase Price (together with accrued
and unpaid interest, if any), of all Notes so tendered and (iii) deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate listing the Notes or portions thereof being purchased by
the Company. The Trustee or Paying Agent promptly will pay the Holders of Notes
so accepted an amount equal to the Change of Control Purchase Price (together
with accrued and unpaid interest, if any), and the Trustee promptly will
authenticate and deliver to such Holders a new Note equal in principal amount to
any unpurchased portion of the Note surrendered. Any Notes not so accepted will
be delivered promptly by the Company to the Holders thereof.
(d) On the Change of Control Purchase Date, all Notes purchased by
the Company under this Section 4.14 shall be delivered to the Trustee for
cancellation, and the Company shall pay or cause to be paid the purchase price
plus accrued and unpaid interest, if any, to the Holders entitled thereto.
(e) At the time the Company delivers Notes to the Trustee which are
to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Notes are to be accepted by the Company pursuant
to and in accordance with the terms of this Section 4.14. A Note shall be
deemed to have been accepted for purchase at the time the Trustee, directly or
through an agent, mails or delivers payment therefor to the surrendering Holder.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
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SECTION 4.15. Limitation on Sales of Assets and
Subsidiary Stock.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless:
(1) the Company or such Restricted Subsidiary receives consideration
at the time of such Asset Disposition at least equal to the fair market
value (including the value of all non-cash consideration), as determined in
good faith by the Board of Directors, of the shares and assets subject to
such Asset Disposition and at least 85% of the consideration thereof
received by the Company or such Restricted Subsidiary is in the form of
cash or cash equivalents and
(2) an amount equal to 100% of the Net Available Cash from such Asset
Disposition is applied by the Company (or such Restricted Subsidiary, as
the case may be):
(A) first, to either (x) the extent the Company elects (or is
required by the terms of any Indebtedness), to prepay, repay, redeem
or purchase (and permanently reduce the commitments thereunder) Senior
Indebtedness within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash or (y) to the
extent the Company elects, to acquire Additional Assets within one
year from the later of the date of such Asset Disposition or the
receipt of such Net Available Cash; provided that, with respect to any
Net Available Cash from an Asset Disposition of accounts receivable in
conjunction with an Accounts Receivable Facility, the Company shall be
required to apply such Net Available Cash first to prepay, repay,
redeem or repurchase (and permanently reduce the commitments
thereunder) Senior Indebtedness consisting of term loans under the
Credit Facility and then otherwise as provided elsewhere herein
(including clause (y) of this paragraph (A));
(B) second, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A) above, to make an
offer to the holders of the Notes (and to holders of other Senior
Subordinated Indebtedness designated by the Company) to purchase Notes
(and such other Senior Subordinated
-59-
Indebtedness) pursuant to and subject to the conditions contained in
this Indenture; and
(C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A) or (B) above, to
any other application or use not prohibited by this Indenture;
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) above, the Company or such Restricted
Subsidiary shall permanently retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in an amount equal to
the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section, the Company
and the Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in accordance
with this Section exceeds $10.0 million. Pending application of Net Available
Cash pursuant to this Section, such Net Available Cash shall be invested in
Permitted Investments.
For the purposes of this Section 4.15, the following are deemed to be
cash or cash equivalents:
(1) the assumption of Indebtedness of the Company or any Restricted
Subsidiary and the release of the Company or such Restricted Subsidiary
from all liability on such Indebtedness in connection with such Asset
Disposition, and
(2) securities received by the Company or any Restricted Subsidiary
from the transferee that are promptly converted by the Company or such
Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase
of the Notes (and other Senior Subordinated Indebtedness) pursuant to clause
(a)(2)(B) above, the Company will be required to purchase Notes tendered
pursuant to an offer by the Company for the Notes (and other Senior Subordinated
Indebtedness) at a purchase price of 100% of their principal amount (without
premium) plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness, such lesser price, if any, as may be provided for by
the terms of
-60-
such Senior Subordinated Indebtedness) in accordance with the procedures
(including prorating in the event of oversubscription) set forth below (the
"Asset Disposition Offer"). If the aggregate purchase price of Notes (and any
-----------------------
other Senior Subordinated Indebtedness) tendered pursuant to such offer is less
than the Net Available Cash allotted to the purchase thereof, the Company will
be required to apply the remaining Net Available Cash in accordance with clause
(a)(2)(C) above. The Company shall not be required to make such an offer to
purchase Notes (and other Senior Subordinated Indebtedness) pursuant to this
Section 4.15 if the Net Available Cash available therefor is less than $10.0
million (which lesser amount shall be carried forward for purposes of
determining whether such an offer is required with respect to the Net Available
Cash from any subsequent Asset Disposition).
(c) With respect to any Asset Disposition Offer effected pursuant to
this Section 4.15, to the extent the aggregate principal amount of Notes
tendered pursuant to such Asset Disposition Offer exceeds the Net Available Cash
to be applied to the repurchase thereof, such Notes shall be purchased pro rata
based on the aggregate principal amount of such Notes tendered by each Holder.
Notice of an Asset Disposition shall be mailed by the Company not more
than 20 days after the obligation to make such Asset Disposition Offer arises to
the Holders of Notes at their last registered addresses with a copy to the
Trustee and the Paying Agent. The Asset Disposition Offer shall remain open
from the time of mailing for at least 30 Days or such longer period as may be
required by applicable law. The notice, which shall govern the terms of the
Asset Disposition Offer, shall include such disclosures as are required by law
and shall state:
(i) that an Asset Disposition has occurred and that such Holder has
the right to require the Company to purchase such Holder's Notes at a
purchase price in cash equal to 100% of the principal amount (the "Asset
-----
Disposition Purchase Price") thereof plus accrued and unpaid interest, if
--------------------------
any, thereon to the date of the purchase (subject to proration as described
above)
(ii) the circumstances and relevant facts regarding such Asset
Disposition;
-61-
(iii) the purchase date (the "Asset Disposition Purchase Date") (which
-------------------------------
shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed);
(iv) the instructions determined by the Company, consistent with the
covenant described hereunder, that a Holder must follow in order to
have its Notes purchased; and
(v) information concerning the business of the Company, the most recent
annual and quarterly reports of the Company filed with the SEC
pursuant to the Exchange Act (or, if the Company is not permitted to
file any such reports with the SEC, the comparable reports prepared
pursuant to Section 4.08), a description of material developments in
the Company's business, information with respect to pro forma
historical financial position and results of operations after giving
effect to such Asset Disposition and such other information
concerning the circumstances and relevant facts regarding such Asset
Disposition and Asset Disposition Offer as would, in the good faith
judgment of the Company, be material to a Holder in connection with
the decisions of such Holder as to whether or not it should tender
Notes pursuant to the Asset Disposition Offer.
(d) On or before the Asset Disposition Purchase Date, the Company
shall, to the extent lawful, (i) accept for payment (subject to proration as
described above) Notes or portions thereof properly tendered and not validly
withdrawn pursuant to the Asset Disposition Offer (together with the appropriate
form as provided for in Exhibit A or B), (ii) deposit with the Trustee or Paying
--------- -
Agent an amount in U.S. Legal Tender sufficient to pay the Asset Disposition
Purchase Price (together with accrued and unpaid interest, if any), of all Notes
so tendered and (iii) deliver or cause to be delivered to the Trustee the Notes
so accepted together with an Officers' Certificate listing the Notes or portions
thereof being purchased by the Company. The Trustee or Paying Agent promptly
will pay the Holders of Notes so accepted an amount equal to the Asset
Disposition Purchase Price (together with accrued and unpaid interest, if any),
and the Trustee promptly will authenticate and deliver to such Holders a new
Note equal in principal amount to any unpurchased portion of the Note
surrendered. Any Notes not so accepted will be delivered promptly by the
Company to the Holders thereof.
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(e) On the Asset Disposition Purchase Date, all Notes purchased by
the Company under this Section 4.15 shall be delivered to the Trustee for
cancellation, and the Company shall pay or cause to be paid the Asset
Disposition Purchase Price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
SECTION 4.16. Future Subsidiary Guarantors.
----------------------------
If the Company or any of its Restricted Subsidiaries transfers or
causes to be transferred, in one transaction or a series of related
transactions, any property to any Restricted Subsidiary that provides a
guarantee under the Credit Facility and that is not a Subsidiary Guarantor, or
if the Company or any of its Restricted Subsidiaries shall organize, acquire or
otherwise invest in another Restricted Subsidiary that provides a guarantee
under the Credit Facility, then such transferee or acquired or other Restricted
Subsidiary shall (1) by a supplemental indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, unconditionally guarantee on a
senior subordinated basis all of the Company's obligations under the Notes and
this Indenture; and (2) deliver to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that such supplemental indenture complies with
this Indenture. Thereafter, such Restricted Subsidiary shall be a Subsidiary
Guarantor for all purposes of this Indenture.
SECTION 4.17. Limitation on Liens.
-------------------
The Company shall not, and will not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Liens of any kind
against or upon any of their respective property or assets, or any proceeds,
income or profit therefrom which secure Senior Subordinated Indebtedness or
Subordinated Obligations, unless:
(1) in the case of Liens securing Subordinated Obligations, the Notes
are secured by a Lien on such property,
-63-
assets, proceeds, income or profit that is senior in priority to such Liens
at least to the same extent that the Notes are subordinated to Senior
Indebtedness; and
(2) in the case of Liens securing Senior Subordinated Indebtedness,
the Notes are equally and ratably secured by a Lien on such property,
assets, proceeds, income or profit.
SECTION 4.18. Limitation on the Sale or Issuance of Capital Stock of Restricted
---------------------------
Subsidiaries.
------------
The Company shall not sell or otherwise dispose of any Capital Stock
of a Restricted Subsidiary, and shall not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell or otherwise dispose of any of its
Capital Stock except:
(1) to the Company or a Wholly Owned Subsidiary;
(2) directors' qualifying shares or shares required by applicable law
to be held by a Person other than the Company or a Restricted Subsidiary;
(3) if, immediately after giving effect to such issuance, sale or
other disposition, neither the Company nor any of its Subsidiaries own any
Capital Stock of such Restricted Subsidiary; or
(4) if, immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary would no longer constitute a
Restricted Subsidiary and any investment in such Person remaining after
giving effect thereto would have been permitted to be made under the
covenant described under Section 4.10 if made on the date of such issuance
sale or other disposition.
SECTION 4.19. Prohibition on Incurrence of Senior Subordinated Debt.
-------------------
Neither the Company nor any Subsidiary Guarantor will incur or suffer
to exist Indebtedness that is senior in right of payment to the Notes or such
Subsidiary Guarantor's Subsidiary Guarantee and subordinate in right of payment
to any other Indebtedness of the Company or such Subsidiary Guarantor, as the
case may be.
-64-
SECTION 4.20. Limitation on Sale/Leaseback Transactions.
-----------------------------------------
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction with respect to any
property unless:
(1) the Company or such Restricted Subsidiary would be entitled to
(A) Incur Indebtedness in an amount equal to the Attributable Debt with
respect to such Sale/Leaseback Transaction pursuant to Section 4.13 and (B)
create a Lien on such property securing such Attributable Debt without
equally and ratably securing the Notes pursuant to Section 4.17;
(2) the net proceeds received by the Company or any Restricted
Subsidiary in connection with such Sale/Leaseback Transaction are at least
equal to the fair value (as determined by the Board of Directors) of such
property; and
(3) the Company applies the proceeds of such transaction in
compliance with Section 4.15.
SECTION 4.21. Limitation of Guarantees by Restricted Subsidiaries.
-------------
The Company shall not permit any of its Restricted Subsidiaries,
directly or indirectly, by way of the pledge of any intercompany note or
otherwise, to assume, guarantee or in any other manner become liable with
respect to any Indebtedness of the Company (other than Indebtedness under
Permitted Interest Rate or Currency Agreements) unless, in any such case:
(1) such Restricted Subsidiary executes and delivers a supplemental
indenture to this Indenture, providing a guarantee of payment of the Notes
by such Restricted Subsidiary, and
(2) (a) if any such assumption, guarantee or other liability of such
Restricted Subsidiary is provided in respect of Senior Indebtedness, the
guarantee or other instrument provided by such Restricted Subsidiary in
respect of such Senior Indebtedness may be superior to such guarantee of
the Notes pursuant to subordination provisions no less favorable to the
Holders of the Notes than those contained in this Indenture and (b) if such
assumption, guarantee or other liability of such Restricted Subsidiary is
provided in respect of Indebtedness that is expressly subordinated
-65-
to the Notes, the guarantee or other instrument provided by such Restricted
Subsidiary in respect of such subordinated Indebtedness shall be
subordinated to such guarantee at least to the same extent that the Notes
are subordinated to Senior Indebtedness.
Notwithstanding the foregoing, any such Subsidiary Guarantee by a
Restricted Subsidiary of the Notes shall provide by its terms that it shall be
automatically and unconditionally released and discharged, without any further
action required on the part of the Trustee or any Holder, upon:
(1) the unconditional release of such Restricted Subsidiary from its
liability in respect of the Indebtedness in connection with which such
Subsidiary Guarantee was executed and delivered pursuant to the preceding
paragraph;
(2) any sale or other disposition (by merger or otherwise) to any
Person which is not a Restricted Subsidiary of the Company of all of the
Company's Capital Stock in, or all or substantially all of the assets of,
such Restricted Subsidiary; provided that (a) such sale or disposition of
such Capital Stock or assets is otherwise in compliance with the terms of
this Indenture and (b) such assumption, guarantee or other liability of
such Restricted Subsidiary has been released by the holders of the other
Indebtedness of this Company so guaranteed;
(3) the legal defeasance of the Notes as described in Article Eight;
and
(4) such Restricted Subsidiary being designated as an Unrestricted
Subsidiary as described under the definition of "Unrestricted Subsidiary."
SECTION 4.22. Payments for Consent.
--------------------
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes
unless such consideration is offered to be paid and is paid to all Holders of
the Notes that consent, waive or agree to amend in the time frame set forth in
the solicitation documents relating to such consent, waiver or agreement.
-66-
SECTION 4.23. Excess Cash Flow Repurchase Offer.
---------------------------------
(a) If the Company has Excess Cash Flow for any fiscal year
(commencing with fiscal 2001), the Company shall apply an amount equal to 50% of
the Excess Cash Flow in such fiscal year:
(1) first, to the extent the Company elects (or is required by the
terms of any Indebtedness), to prepay, repay, redeem or purchase (and
permanently reduce the commitments thereunder) Senior Indebtedness with
such percentage of Excess Cash Flow;
(2) second, to the extent of the balance of such percentage of Excess
Cash Flow after application in accordance with clause (1), to make an offer
to the holders of the Notes (and to holders of other Senior Subordinated
Indebtedness designated by the Company) to purchase Notes (and such other
Senior Subordinated Indebtedness) pursuant to and subject to the conditions
contained in this Indenture (an "Excess Cash Flow Offer"); and
----------------------
(3) third, to the extent of the balance of such percentage of Excess
Cash Flow after application in accordance with clause (1) or (2) above, to
any other application or use not prohibited by this Indenture;
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (1) above, the Company shall permanently
retire such Indebtedness and shall cause the related loan commitment (if any) to
be permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased; and provided, further, that no Excess Cash Flow Offer shall
be required to be made if the Leverage Ratio is less than 3.0 to 1.0 on the last
day of such fiscal year.
Notwithstanding the foregoing, the amount of Excess Cash Flow included
in any Excess Cash Flow Offer shall be reduced by the aggregate amount of any
optional prepayments of Senior Indebtedness during such fiscal year, but only to
the extent that such prepayments by their terms cannot be reborrowed or redrawn
and do not occur in connection with a refinancing of all or any portion of such
Senior Indebtedness.
(b) In the event of an Excess Cash Flow Offer, the Company will be
required to purchase Notes tendered pursuant to
-67-
an offer by the Company for the Notes (and other Senior Subordinated
Indebtedness) at a purchase price of 100% of their principal amount (without
premium) plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness, such lesser price, if any, as may be provided for by
the terms of such Senior Subordinated Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
this Indenture. If the aggregate purchase price of Notes (and any other Senior
Subordinated Indebtedness) tendered pursuant to such offer is less than the
Excess Cash Flow allotted to the purchase thereof, the Company will be required
to apply the remaining Excess Cash Flow in accordance with clause (a)(3) above.
The Company shall not be required to make an Excess Cash Flow Offer to purchase
Notes (and other Senior Subordinated Indebtedness) pursuant to this Section 4.23
if the Excess Cash Flow available therefor is less than $1.0 million (which
lesser amount shall be carried forward for purposes of determining whether such
an offer is required with respect to the Excess Cash Flow in any subsequent
fiscal year).
(c) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 4.23. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this clause by virtue thereof.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale
of Assets of the Company.
-------------------------
The Company shall not consolidate with or merge with or into, or
convey, transfer or lease, in one transaction or a series of transactions, all
or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
---------
Company") shall be a Person organized and existing under the laws of the
-------
United States of America, any State thereof or the District of Columbia and
the Successor
-68-
Company (if not the Company) shall expressly assume, by an indenture
supplemental thereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all the obligations of the Company under the
Notes, this Indenture and the Registration Rights Agreement;
(2) immediately after giving effect to such transaction (and
treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary as a result of such transaction as having been
Incurred by such Successor Company or such Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;
(3) immediately after giving effect to such transaction, the
Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (b) of Section 4.13;
(4) immediately after giving effect to such transaction, the
Successor Company shall have Consolidated Net Worth in an amount that is
not less than the Consolidated Net Worth of the Company immediately prior
to such transaction;
(5) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture; and
(6) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize income, gain or
loss for Federal income tax purposes as a result of such transaction 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
transaction had not occurred.
Notwithstanding the foregoing, any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company.
-69-
SECTION 5.02. Successor Corporation Substituted
for the Company.
----------------
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with Section
5.01, in which the Company is not the continuing corporation, the Successor
Company formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Notes with the same effect as if such surviving entity
had been named as such, and the predecessor company, other than in the case of a
conveyance, transfer or lease, shall be released from the obligation to pay the
principal of and interest on the Notes.
SECTION 5.03. Merger, Consolidation and Sale of
Assets of Any Subsidiary Guarantor.
----------------------------------
The Company shall not permit any Subsidiary Guarantor to consolidate
with or merge with or into, or convey, transfer or lease, in one transaction or
a series of transactions, all or substantially all of its assets to, any Person
(other than to the Company or another Subsidiary Guarantor) unless:
(1) the resulting, surviving or transferee Person (if not such
Subsidiary) shall be a Person organized and existing under the laws of the
jurisdiction under which the Subsidiary Guarantor was organized or under
the laws of the United States of America, any State thereof or the District
of Columbia, and such Person (if not the Subsidiary Guarantor) shall
expressly assume, by a supplemental indenture, executed and delivered to
the Trustee, in a form satisfactory to the Trustee, all the obligations of
the Subsidiary Guarantor, if any, under its Subsidiary Guarantee;
(2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been issued by such Person at the time
of such transaction), no Default shall have occurred and be continuing; and
(3) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and
-70-
such supplemental indenture (if any) comply with this Indenture.
The provisions of clauses (1) and (2) above shall not apply to any
transactions that constitute an Asset Disposition if the Company complied with
the applicable provisions of Section 4.15.
SECTION 5.04. Successor Corporation Substituted for Subsidiary Guarantor.
---------------------
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of any Subsidiary Guarantor in accordance
with Section 5.03, in which such Subsidiary Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
such Subsidiary Guarantor is merged or to which such conveyance, lease or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, such Subsidiary Guarantor under this Indenture with
the same effect as if such surviving entity had been named as such, and the
predecessor company, other than in the case of a conveyance, transfer or lease,
shall be released from the obligation to pay the principal of and interest on
the Notes.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
-----------------
Each of the following is an "Event of Default":
(1) a default in the payment of interest on the Notes when due,
continued for 30 days,
(2) a default in the payment of principal of any Note when due at
its Stated Maturity, upon optional redemption, upon required repurchase,
upon acceleration or otherwise (including the failure to pay the Mandatory
Redemption Price if required);
(3) the failure by the Company to comply with its obligations under
Section 5.01 or of any Subsidiary Guarantor to comply with its obligations
under Section 5.03;
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(4) the failure by the Company to comply for 30 days after notice
with any of its obligations under Section 4.14 (other than a failure to
purchase Notes) or under Sections 4.08, 4.10, 4.11, 4.12, 4.13, 4.15 (other
than a failure to purchase the Notes) and 4.18;
(5) the failure by the Company or any Subsidiary Guarantor to
comply for 60 days after notice with their other agreements contained in
this Indenture;
(6) Indebtedness of the Company, any Subsidiary Guarantor or any
Significant Subsidiary (other than Indebtedness owed to the Company or its
Restricted Subsidiaries) is not paid within any applicable grace period
after final maturity or is accelerated by the holders thereof because of a
default and the total amount of such Indebtedness unpaid or accelerated
exceeds $7.5 million (the "cross-acceleration provision");
----------------------------
(7) the Company, any Subsidiary Guarantor or any Significant
Subsidiary of the Company (A) commences a voluntary case or proceeding
under any Bankruptcy Law with respect to itself, (B) consents to the entry
of a judgment, decree or order for relief against it in an involuntary case
or proceeding under any Bankruptcy Law, (C) consents to the appointment of
a Custodian of it or for substantially all of its property, or (D) makes a
general assignment for the benefit of its creditors;
(8) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company, any Subsidiary Guarantor or any
Significant Subsidiary of the Company in an involuntary case or proceeding
under any Bankruptcy Law, which shall (A) order reorganization,
arrangement, adjustment or composition in respect of the Company, any
Subsidiary Guarantor or any such Significant Subsidiary, (B) appoint a
Custodian of the Company, any Subsidiary Guarantor or any such Significant
Subsidiary or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or
order shall remain unstayed and in effect for a period of 60 consecutive
days;
(9) any judgment or decree for the payment of money in excess of
$7.5 million (excluding judgments to the extent covered by insurance by one
or more reputable insurers and as to which such insurers have acknowledged
coverage for) is entered against the Company, any Subsidiary
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Guarantor or any Significant Subsidiary, remains outstanding for a period
of 60 days following entry of such judgment and is not discharged, bonded,
waived or stayed within 30 days after written notice (the "judgment default
----------------
provision"); or
---------
(10) a Subsidiary Guarantee of a Significant Subsidiary ceases to
be in full force and effect (other than in accordance with the terms of
such Subsidiary Guarantee) or is declared to be null and void and
unenforceable or the Subsidiary Guarantee of a Significant Subsidiary is
found to be invalid or a Subsidiary Guarantor that is a Significant
Subsidiary denies its liability under its Subsidiary Guarantee (other than
by reason of release of the Subsidiary Guarantor in accordance with the
terms of this Indenture); provided, however, that an Event of Default will
also be deemed to occur with respect to Subsidiaries that are not
Significant Subsidiaries ("Insignificant Subsidiaries") if the Subsidiary
--------------------------
Guarantees of such Insignificant Subsidiaries cease to be in full force and
effect or are declared null and void and unenforceable or such
Insignificant Subsidiaries deny their liability under their Subsidiary
Guarantees, if when aggregated and taken as a whole the Insignificant
Subsidiaries subject to this clause (10) would meet the definition of a
Significant Subsidiary.
However, a default under clause (4), (5) or (9) will not
constitute an Event of Default until the Trustee or the Holders of 25% in
principal amount of the outstanding Notes notify the Company in writing of the
default and the Company does not cure such default within the time specified
after receipt of such notice.
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice of any Event of Default under clause (6)
or (10) and any event which with the giving of notice or the lapse of time would
become an Event of Default under clause (4), (5) or (9), its status and what
action the Company is taking or proposes to take with respect thereto.
SECTION 6.02. Acceleration.
------------
(a) If an Event of Default (other than an Event of Default specified
in Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
and has not been waived pursuant to Section 6.04, then the Trustee, by written
notice to
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the Company, or the Holders of at least 25% in principal amount of outstanding
Notes, by notice in writing to the Company and the Trustee, may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable. All such notices shall specify the respective Event of Default and that
it is a "notice of acceleration". Upon any such declaration, such amount shall
be immediately due and payable; provided, however, that if upon such declaration
there are any amounts outstanding under the Credit Facility and the amounts
thereunder have not been accelerated, such principal and interest shall be due
and payable upon the earlier of the time such amounts are accelerated or five
(5) Business Days after receipt by the Company and the Representative under the
Credit Facility of such declaration.
(b) If an Event of Default specified in Section 6.01(7) or (8) with
respect to the Company occurs and is continuing, the principal of and interest
on all the Notes will ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holders.
(c) The Holders of a majority in principal amount of the Notes may,
on behalf of the Holders of all of the Notes, rescind and cancel an acceleration
and its consequences (i) if the rescission would not conflict with any judgment
or decree, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration, (iii) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (iv) in the event of the cure or waiver of an Event of Default of
the type described in Section 6.01(7) or (8), the Trustee shall have received an
Officers' Certificate and an Opinion of Counsel that such Event of Default has
been cured or waived. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
(d) In the event of any Event of Default specified in clause (6)
above, such Event of Default and all consequences thereof (including, without
limitation, any acceleration or resulting payment default) shall be annulled,
waived or rescinded, automatically and without any action by the Trustee or the
Holders of the Notes, if within 20 days after such Event of Default arose (x)
the Indebtedness or guarantee that is the basis for such Event of Default has
been discharged in a manner that does not violate the terms of this Indenture or
(y) the holders thereof have rescinded or waived the acceleration, notice
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or action (as the case may be) giving rise to such Event of Default.
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 Notes or to enforce the performance
of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes 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 accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of
any other remedy. All available remedies are cumulative to the extent permitted
by law.
SECTION 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 2.08, 6.07 and 9.02, the Holders of a majority in
principal amount of the then outstanding Notes by notice to the Trustee may, on
behalf of the Holders of all of the Notes, waive an existing Default or Event of
Default and its consequences, except a Default in the payment of principal of or
interest on any Note as specified in clauses (i) and (ii) of Section 6.01. When
a Default or Event of Default is waived, it is cured and ceases to exist for
every purpose of this Indenture.
SECTION 6.05. Control by Majority.
-------------------
Subject to Section 2.08, the Holders of a majority in principal amount
of the then outstanding Notes 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, including, without limitation, any remedies
provided for in Section 6.03. Subject to Section 7.01, however, the Trustee may
refuse to follow any direction that conflicts with any law or this Indenture,
that the Trustee determines is unduly prejudicial to the rights of another
Holder, or that may involve the Trustee in personal liability and the Trustee
may take any other action it deems proper that is not inconsistent with any such
direction received from Holders of the Notes.
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SECTION 6.06. Limitation on Suits.
-------------------
Subject to Article Seven, if an Event of Default occurs and is
continuing, the Trustee will be under no obligation to exercise any of the
rights or powers under this Indenture at the request or direction of any of the
Holders unless such Holders have offered to the Trustee reasonable indemnity or
security against any loss, liability or expense. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
of a Note may pursue any remedy with respect to this Indenture or the Notes
unless
(1) such Holder has previously given the Trustee notice that an
Event of Default is continuing,
(2) Holders of at least 25% in principal amount of the outstanding
Notes have requested the Trustee to pursue the remedy,
(3) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense,
(4) the Trustee has not complied with such request within 60 days
after the receipt thereof and the offer of security or indemnity and
(5) the Holders of a majority in principal amount of the
outstanding Notes have not given the Trustee a direction inconsistent with
such request within such 60-day period.
SECTION 6.07. Rights of Holders To Receive Payment.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of and interest on a Note, on or
after the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default in payment of principal or interest specified
in clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company, any Subsidiary Guarantor or any other obligor on the Notes for
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the whole amount of principal and accrued interest remaining unpaid, together
with interest on overdue principal and, to the extent that payment of such
interest is lawful, interest on overdue installments of interest at the rate set
forth in Section 4.01 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, consultants 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, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company, any
Subsidiary Guarantor or any other obligor upon the Notes, any of their
respective creditors or any of their respective 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, if 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, taxes, disbursements and advances of the
Trustee, its agents, consultants and counsel, and any other amounts due the
Trustee under Section 7.07. Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. Priorities.
----------
If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due
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and payable on the Notes for principal and interest, respectively; and
Third: the balance, if any, to the Company or any other obligor on
the Notes.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11. Undertaking for Costs.
---------------------
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, 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 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.07, or a suit by a Holder or Holders of more than 10% in
principal amount of the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
-----------------
(a) If an Event of Default has occurred and is continuing and is
known to the Trustee, 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 its
exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically
set forth in this Indenture and no covenants or obligations shall be
implied in this Indenture against the Trustee.
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(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) This paragraph does not limit the effect of paragraph (b) of
this Section 7.01.
(ii) 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.
(iii) 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 6.02, 6.04 or 6.05 hereof.
(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 in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not assured to it.
(e) Whether or not herein expressly provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), (c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company or any Subsidiary Guarantor. Assets held in trust by the Trustee need
not be segregated from other assets except to the extent required by law.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protec
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tion to the Trustee shall be subject to the provisions of this Section and to
the provisions of the TIA.
SECTION 7.02. Rights of Trustee.
-----------------
Subject to Section 7.01:
(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 or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith in accordance with a direction received by it
pursuant to Section 6.05.
(e) The Trustee may refuse to perform any duty or exercise any right
or power which it reasonably believes may expose it to any loss, liability
or expense unless it receives indemnity satisfactory to it against such
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money
held in trust by the Trustee need not be segregated from other funds except
to the extent required by law.
(g) The Trustee shall have no duty with respect to a Default unless a
Trust Officer has actual knowledge of the Default. As used herein, the
term "actual knowledge" means the actual fact or statement of knowing,
----------------
without any duty to make any investigation with regard thereto.
(h) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized and within its
powers.
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(i) Any Agent shall have the same rights and be protected to the same
extent as if it were Trustee.
(j) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
SECTION 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes or coupons and may otherwise deal with the Company or
an Affiliate with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights.
SECTION 7.04. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes or any coupons; it shall not be accountable for the
Company's use of the proceeds from the Notes; it shall not be responsible for
any statement in the Notes or any coupons; it shall not be responsible for any
overissue; it shall not be responsible for determining whether the form and
terms of any Notes or coupons were established in conformity with this
Indenture; it shall not be responsible for determining whether any Notes were
issued in accordance with this Indenture; and it shall not be responsible for
the acts or omissions of any other Trustees appointed hereunder.
SECTION 7.05. Notice of Defaults.
------------------
If a Default occurs and is continuing on a series and if a Trust
Officer has actual knowledge of such Default, the Trustee shall mail a notice of
the Default within 90 days after it occurs to Holders of Registered Securities
of the series. Except in the case of a Default in payment on a series, 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 of the series. The Trustee shall withhold notice of a Default
described in Section 6.01(4) until at least 60 days after it occurs.
SECTION 7.06. Reports by Trustee to Holders.
-----------------------------
Any report required by TIA (S) 313(a) to be mailed to Noteholders
shall be mailed by the Trustee on or before July 15th of each year.
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A copy of each report at the time of its mailing to Noteholders shall
be filed with the SEC and each stock exchange on which any Notes are listed.
The Company shall notify the Trustee when any Notes are listed on a stock
exchange.
SECTION 7.07. Compensation and Indemnity.
--------------------------
The Company and the Subsidiary Guarantors shall pay to the Trustee
from time to time reasonable compensation 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 and the Subsidiary Guarantors shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses shall include the reasonable compensation and expenses of the
Trustee's agents and counsel.
The Company and the Subsidiary Guarantors shall, jointly and
severally, indemnify the Trustee against any loss or liability incurred by it.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. The Company and the Subsidiary Guarantors shall defend the claim and
the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent.
The Company and the Subsidiary Guarantors need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee
through negligence or willful misconduct.
To secure the Company's and the Subsidiary Guarantors' payment
obligations in this Section, the Trustee shall have a lien prior to the Notes
and any coupons on all money or property held or collected by the Trustee,
except that held in trust to pay principal or interest on particular securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (6) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section shall survive any termination or
discharge of this Indenture (including without limitation any termination under
any Bankruptcy Law) and the resignation or removal of the Trustee.
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SECTION 7.08. Replacement of Trustee.
----------------------
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Notes may remove the Trustee by so notifying
the Trustee and may appoint a successor Trustee with the Company's consent.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b)
or with Section 7.09;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a Custodian or other public officer takes charge of the Trustee
or its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(7) or (8) occurs
with respect to the Trustee.
The Company also may remove the Trustee with or without cause if the
Company so notifies the Trustee three months in advance and if no Default occurs
during the three-month period.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in principal amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA (S) 310(a) or (S) 310(b) or
with Section 7.10, any Noteholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
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A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of Registered Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.07.
SECTION 7.09. Successor Trustee by Merger, Etc.
--------------------------------
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. Trustee's Capital and Surplus.
-----------------------------
The Trustee at all times shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published report of
financial condition.
SECTION 7.11. Eligibility; Disqualification.
-----------------------------
This Indenture shall always have a Trustee who satisfies the
requirements of TIA (S)(S) 310(a)(1), (2) and (5). The Trustee (or, in the case
of a Trustee included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $50 million as
set forth in its most recent published annual report of condition. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA (S) 310(a)(2). The Trustee shall comply with TIA (S)
310(b); provided, however, that there shall be excluded from the operation of
TIA (S) 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 (S)
310(b)(1) are met. The provisions of TIA (S) 310 shall apply to the Company, as
obligor of the Notes.
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SECTION 7.12. Preferential Collection of
Claims Against Company.
--------------------------
The Trustee shall comply with TIA section 311(a), excluding any
creditor relationship listed in TIA section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA section 311(a) to the extent indicated
therein.
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes;
Defeasance.
-------------------------------
(a) This Indenture will cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of the Notes, as
expressly provided for in this Indenture) as to all outstanding Notes when:
(i) either (A) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or paid)
have been delivered to the Trustee for cancellation or (B) all Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable or shall become due and payable within one year and the Company has
irrevocably deposited or caused to be deposited with the Trustee an amount
in U.S. Legal Tender sufficient to pay and discharge the entire
indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation, for the principal of, premium, if any, and interest to the
date of deposit,
(ii) the Company has paid or caused to be 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.
(b) Subject to Sections 8.01(c) and 8.02, the Company and the
Subsidiary Guarantors at any time may terminate (i) all their obligations under
the Notes, the Guarantees and this Indenture ("legal defeasance option") or (ii)
-----------------------
their obligations under Sections 4.04, 4.05, 4.08 and 4.10 through 4.22 and the
operation of Sections 6.01(4), (6), (7) and (8) (with respect only to Subsidiary
Guarantors or Significant Subsidiar
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ies) and (9) and the limitations contained in Sections 5.01(3) and (4)
("covenant defeasance option"). The Company may exercise its legal defeasance
--------------------------
option notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercise its legal defeasance option, payment of the
Notes may not be accelerated because of an Event of Default. If the Company
exercise its covenant defeasance option, payment of the Notes may not be
accelerated because of an Event of Default specified in Sections 6.01(4), (6),
(7) and (8) (with respect only to Subsidiary Guarantors or Significant
Subsidiaries) and (9), or because of the failure of the Company to comply with
Sections 5.01(3) and (4). If the Company exercise its legal defeasance option
or its covenant defeasance option, each Subsidiary Guarantor, if any, shall be
released from all its obligations under its Guarantee.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company and the Subsidiary Guarantors terminate.
(c) Notwithstanding clauses (a) and (b) above, the obligations of the
Company and the Subsidiary Guarantors in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
7.07, 7.08, 8.05, 8.06 and the Appendix shall survive until the Notes have been
paid in full. Thereafter, the obligations of the Company and the Subsidiary
Guarantors, if any, in Sections 7.07, 8.05 and 8.06 shall survive.
SECTION 8.02. Conditions to Defeasance.
------------------------
The following shall be the conditions to the application of Section
8.01 hereof to the outstanding Notes:
(1) the Company irrevocably deposits in trust with the Trustee U.S.
Legal Tender or U.S. Government Obligations, or a combination thereof, for
the payment of principal of, interest and premium, if any, on the
outstanding Notes on the stated date for payment thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent public accountants or a
nationally recognized investment banking firm expressing their opinion that
the payments of
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principal and interest when due on the deposited U.S. Government
Obligations plus any deposited U.S. Legal Tender will provide cash at such
times and in such amounts as will be sufficient to pay principal, premium,
if any, and interest when due on all outstanding Notes to maturity or
redemption, as the case may be;
(3) no Default or Event of Default with respect to the Notes 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) or insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the
91st day after the date of deposit;
(4) the Company delivers to the Trustee an Officers' Certificate
stating that the deposit was not made by the Company with the intent of
preferring the Holders over any other creditors of the Company or with the
intent of defeating, hindering, delaying or defrauding any other creditors
of the Company;
(5) neither the deposit nor the defeasance shall result in a
default or event of default under any other material agreement to which the
Company is a party or by which the Company is bound;
(6) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not constitute,
or is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(7) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall confirm
that, the Noteholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such 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 defeasance had not occurred;
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(8) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Noteholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such covenant defeasance
had not occurred; and
(9) the Company deliver to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes as contemplated by this Article 8
have been complied with.
SECTION 8.03. Application of Trust Money.
--------------------------
The Trustee shall hold in trust U.S. Legal Tender or U.S. Government
Obligations deposited with it pursuant to this Article Eight. It shall apply
the deposited U.S. Legal Tender and the money from U.S. Government Obligations
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Notes.
SECTION 8.04. Repayment to Company.
--------------------
The Trustee and the Paying Agent shall promptly turn over to the
Company (or the appropriate Subsidiary Guarantors), upon delivery of an
Officers' Certificate stating that such payment does not violate the terms of
this Indenture, any excess money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company and the Subsidiary Guarantors upon this
written request any money held by them for the payment of principal or interest
that remains unclaimed for two years, and, thereafter, Noteholders entitled to
the money must look to the Company and the Subsidiary Guarantors for payment as
general creditors and all liability of the Trustee or Paying Agent with respect
to such money shall thereupon cease.
SECTION 8.05. Indemnity for Government Obligations.
------------------------------------
The Company and the Subsidiary Guarantors shall pay and shall
indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against deposited U.S. Government
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Obligations or the principal and interest received on such U.S. Government
Obligations.
SECTION 8.06. Reinstatement.
-------------
If the funds deposited with the Trustee to effect covenant defeasance
are insufficient to pay the principal of, premium and interest on the Notes when
due, then the obligations of the Company and the Subsidiary Guarantors under
this Indenture will be revived and no such defeasance will be deemed to have
occurred.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government Obligations in accordance with this Article Eight by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the obligations of the Company and the Subsidiary Guarantors
under this Indenture, the Notes and the Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article Eight
until such time as the Trustee or Paying Agent is permitted to apply all such
U.S. Legal Tender or U.S. Government Obligations in accordance with this Article
Eight; provided, however, that, if the Company or the Subsidiary Guarantors have
made any payment of interest on or principal of any Notes because of the
reinstatement of its obligations, the Company or the Subsidiary Guarantors, as
the case may be, shall be subrogated to the rights of the Holders of such Notes
to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
--------------------------
The Company and the Subsidiary Guarantors, when authorized by a Board
Resolution of each of them, and the Trustee, together, may amend or supplement
this Indenture or the Notes or the Guarantees without notice to or consent of
any Holder:
(i) to cure any ambiguity, omission, defect or inconsistency;
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(ii) to comply with Article Five;
(iii) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner
such that the uncertificated Notes are described in Section 163(f)(2)(B) of
the Code);
(iv) to comply with any requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA;
(v) to add to the covenants of the Company for the benefit of the
Holders or to surrender a right or power conferred upon the Company;
(vi) to add Guarantees with respect to the Notes;
(vii) to secure the Notes; or
(viii) to make any other change that does not adversely affect in
any material respect the rights of any Holders hereunder;
provided that the Company have delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
After an amendment, supplement or waiver under this Section 9.01
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 9.02. With Consent of Holders.
-----------------------
Subject to Section 6.07, the Company, the Subsidiary Guarantors when
authorized by a Board Resolution of each of them, and the Trustee, together,
with the written consent of the Holder or Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, the Notes), may amend or supplement this Indenture or the
Notes, without notice to any other Holders. The Holder or Holders of at least a
majority in
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aggregate principal amount of the then outstanding Notes may waive compliance by
the Company or the Subsidiary Guarantors with any provision of this Indenture or
the Notes without notice to any other Holder. Notwithstanding the above, no
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
shall, without the consent of each Holder of each Note affected thereby:
(1) reduce the amount of Notes whose Holders must consent to an
amendment,
(2) reduce the rate of or change the time for payment of interest
on any Note,
(3) reduce the principal of or change the Stated Maturity of any
Note,
(4) reduce the amount payable upon the redemption of any Note or
change the time at which any Note may be redeemed in accordance with
Article Three,
(5) make any Note payable in money other than that stated in the
Note,
(6) impair the right of any Holder to receive payment of principal
of and interest on such Holder's Notes on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect
to such Holder's Notes,
(7) affect the ranking of the Notes in any material respect,
(8) release any Subsidiary Guarantor that is a Significant
Subsidiary from any of its obligations under its Subsidiary Guarantee or
this Indenture other than in accordance with the terms of this Indenture,
or
(9) make any change to paragraph 8 of the Notes which would
adversely affect the rights of any of the Holders to receive the Mandatory
Redemption Price; or
(10) make any change in the amendment provisions which require each
holder's consent or in the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form
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of any proposed amendment, supplement form or waiver, but it shall be sufficient
if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
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 9.03. Compliance with TIA.
-------------------
If at the time of an amendment to this Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment, waiver or
supplement of this Indenture or the Notes shall comply with the TIA as then in
effect.
SECTION 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date the amendment,
supplement or waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.05 above or (ii) such other date as the Company may designate. If a record
date is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 180 days after such record date.
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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 (i)
through (ix) of Section 9.02, in which case, the amendment, supplement or waiver
shall bind only each Holder of a Note who has consented to it and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note; provided that, without the consent of a Holder,
any such waiver shall not impair or affect the right of such Holder to receive
payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates.
SECTION 9.05. Notation on or Exchange of Notes.
--------------------------------
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue, the Subsidiary
Guarantors shall endorse and the Trustee shall authenticate a new Note that
reflects the changed terms. Any such notation or exchange shall be made at the
sole cost and expense of the Company. Failure to make the appropriate notation
or to issue a new Note shall not affect the validity of such amendment,
supplement or waiver.
SECTION 9.06. Trustee To Sign Amendments, Etc.
-------------------------------
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided that 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. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Such Opinion of Counsel shall not be an expense of the Trustee.
-93-
ARTICLE TEN
GUARANTEES
SECTION 10.01. Unconditional Guarantee.
-----------------------
Each Subsidiary Guarantor shall unconditionally jointly and severally
guarantee to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, that: (i) the principal of
and interest on the Notes 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, if any, and interest on any interest, to the
extent lawful, of the Notes and all other obligations of the Company to the
Holders or the Trustee under this Indenture or the Notes will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof and
(ii) in case of any extension of time of payment or renewal of any Notes or of
any such other obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise.
Each Subsidiary Guarantor agrees that, as between such Subsidiary
Guarantor on the one hand, and the Holders and the Trustee on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Six for the purposes of the 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 forthwith become due and payable by such Subsidiary
Guarantor for the purposes of the Guarantee.
Each Subsidiary Guarantor agrees that its obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes 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 Subsidiary
Guarantor 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
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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 Notes, this Indenture and in the Guarantee. If any
Noteholder or the Trustee is required by any court or otherwise to return to the
Company, any Subsidiary Guarantor, or any Custodian acting in relation to the
Company or any Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Noteholder, the Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that, in the event of default in the payment of
principal (or premium, if any) or interest on such Notes, whether at their
Stated Maturity, by acceleration, upon redemption, purchase or otherwise, legal
proceedings may be instituted by the Trustee on behalf of, or by, the Holder of
such Notes, subject to the terms and conditions set forth in this Indenture,
directly against each of the Subsidiary Guarantors to enforce the Guarantee
without first proceeding against the Company. Each Subsidiary Guarantor agrees
that if, after the occurrence and during the continuance of an Event of Default,
the Trustee or any Holders are prevented by applicable law from exercising their
respective rights to accelerate the maturity of the Notes, to collect interest
on the Notes, or to enforce any other right or remedy with respect to the Notes,
the Subsidiary Guarantors will pay to the Trustee for the account of the
Holders, upon demand therefor, the amount that would otherwise have been due and
payable had such rights and remedies been permitted to be exercised by the
Trustee or any of the Holders. The Subsidiary Guarantors will agree to pay, in
addition to the amount stated above, any and all expenses (including reasonable
counsel fees and expenses) incurred by the Trustee and the Holders in enforcing
any rights under the Subsidiary Guarantees with respect to the Subsidiary
Guarantors.
SECTION 10.02. Severability.
------------
In case any provision of the 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 10.03. Release of Subsidiary Guarantor from the Guarantee.
----------
Upon (a) the designation of a Subsidiary Guarantor as an Unrestricted
Subsidiary in accordance with this Indenture or (b) the sale or disposition
(whether by merger, stock purchase,
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asset sale or otherwise) of all of the Capital Stock of a Subsidiary Guarantor
(or all or substantially all of its assets) to an entity which is not the
Company or a Subsidiary or Affiliate of the Company and which sale or
disposition is otherwise in compliance with the terms of this Indenture, such
Subsidiary Guarantor shall be deemed released from all obligations under this
Article Ten without any further action required on the part of the Trustee or
any Holder; provided, however, that if the lenders under the Credit Facility
release the guarantee of any guarantor under the Credit Facility that is also a
Subsidiary Guarantor, such Subsidiary Guarantor will be automatically released
and relieved of all of its obligations under this Indenture and its Subsidiary
Guarantee and such Subsidiary Guarantee will terminate; provided, further,
however, if at any time after such release such Subsidiary Guarantor again
becomes a guarantor under the Credit Facility, the Company shall cause such
Subsidiary Guarantor to unconditionally guarantee on a senior subordinated basis
all of the Company's obligations under the Notes and this Indenture to the same
extent as it guarantees the Company's obligations under the Credit Facility.
The Trustee shall 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 10.03.
SECTION 10.04. Limitation on Amount Guaranteed; Contribution by Subsidiary
--------------------------
Guarantors.
----------
(a) Anything contained in this Indenture or the Guarantee to the
contrary notwithstanding, if any Fraudulent Transfer Law (as hereinafter
defined) is determined by a court of competent jurisdiction to be applicable to
the obligations of any Subsidiary Guarantor under the Guarantee, such
obligations of such Subsidiary Guarantor under the Guarantee shall be limited to
a maximum aggregate amount equal to the largest amount that would not render its
obligations under the Guarantee subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
----------
Transfer Laws"), in each case after giving effect to all other liabilities of
-------------
such Subsidiary Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any liabilities of
such Subsidiary Guarantor (x) in respect of intercompany Indebtedness to the
Company or other Affiliates of the Company to the extent that such Indebtedness
would be discharged in an amount equal to the amount paid by such Subsidiary
Guarantor
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under the Guarantee and (y) under any Guarantee of Subordinated Obligations
which Guarantee contains a limitation as to maximum amount similar to that set
forth in this subsection 10.04(a), pursuant to which the liability of such
Subsidiary Guarantor under the Guarantee is included in the liabilities taken
into account in determining such maximum amount) and after giving effect as
assets to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation, reimbursement,
indemnification or contribution of such Subsidiary Guarantor pursuant to
applicable law or pursuant to the terms of any agreement (including without
limitation any such right of contribution under subsection 10.04(b)).
(b) The Subsidiary Guarantors together may desire to allocate among
themselves in a fair and equitable manner, their obligations arising under the
Guarantee. Accordingly, if any payment or distribution is made on any date by
any Subsidiary Guarantor under the Guarantee (a "Funding Subsidiary Guarantor")
----------------------------
that exceeds its Fair Share (as defined below) as of such date, that Funding
Subsidiary Guarantor will be entitled to a contribution from each of the other
Subsidiary Guarantors in the amount of such other Subsidiary Guarantor's Fair
Share Shortfall (as defined below) as of such date, with the result that all
such contributions will cause each Subsidiary Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share as of such date. "Fair Share" means,
----------
with respect to a Subsidiary Guarantor as of any date of determination, an
amount equal to (i) the ratio of (x) the Adjusted Maximum Amount (as defined
below) with respect to such Subsidiary Guarantor to (y) the aggregate of the
Adjusted Maximum Amounts with respect to all Subsidiary Guarantors, multiplied
by (ii) the aggregate amount paid or distributed on or before such date by all
Funding Subsidiary Guarantors under the Guarantee in respect of the obligations
guarantied. "Fair Share Shortfall" means, with respect to a Subsidiary
--------------------
Guarantor as of any date of determination, the excess, if any, of the Fair Share
of such Subsidiary Guarantor over the Aggregate Payments of such Subsidiary
Guarantor. "Adjusted Maximum Amount" means, with respect to a Subsidiary
-----------------------
Guarantor as of any date of determination, the maximum aggregate amount of the
obligations of such Subsidiary Guarantor under the Guarantee, determined as of
such date in accordance with subsection 10.04(a); provided that, solely for
purposes of calculating the Adjusted Maximum Amount with respect to any
Subsidiary Guarantor for purposes of this subsection 10.05(b), any assets or
liabilities of such Subsidiary Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or li-
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abilities of such Subsidiary Guarantor. "Aggregate Payments" means, with respect
to a Subsidiary Guarantor as of any date of determination, an amount equal to
(i) the aggregate amount of all payments xxx distributions made on or before
such date by such Subsidiary Guarantor in respect of the Guarantee (including,
without, limitation, in respect of this subsection 10.04(b) minus (ii) the
aggregate amount of all payments received on or before such date by such
Subsidiary Guarantor from the other Subsidiary Guarantors as contributions under
this subsection 10.05(b)). The amounts payable as contributions hereunder shall
be determined as of the date on which the related payment or distribution is
made by the applicable Funding Subsidiary Guarantor. The allocation among
Subsidiary Guarantors of their obligations as set forth in this subsection
10.04(b) shall not be construed in any way to limit the liability of any
Subsidiary Guarantor under this Indenture or under the Guarantee.
SECTION 10.05. Waiver of Subrogation.
---------------------
Until payment in full is made of the Notes and all other obligations
of the Company to the Holders or the Trustee hereunder and under the Notes, each
Subsidiary Guarantor irrevocably waives any claim or other rights it acquires
against the Company that arise from the existence, payment, performance or
enforcement of such Subsidiary Guarantor's obligations under the Guarantee and
this Indenture, including without limitation, any right of subrogation,
reimbursement, exoneration, indemnification, and any right to participate in any
claim or remedy of any Holder of Notes against the Company, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company, directly or indirectly, in cash or other property or by set-off or any
other manner, payment or security on account of such claim or other rights. If
any amount shall be paid to any Subsidiary Guarantor in violation of the
preceding sentence and the Notes shall not have been paid in full, such amount
shall have been deemed to have been paid to such Subsidiary Guarantor for the
benefit of, and held in trust for the benefit of, the Holders of the Notes, and
shall forthwith be paid to the Trustee for the benefit of such Holders to be
credited and applied upon the Notes, whether matured or unmatured, in accordance
with the terms of this Indenture. Each Subsidiary Guarantor acknowledges that
it will receive direct and indirect benefits from the financing arrangements
contemplated by this Indenture and that the waiver set forth in this Section
10.05 is knowingly made in contemplation of such benefits.
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SECTION 10.06. Execution of Guarantee.
----------------------
To evidence its guarantee to the Noteholders set forth in this Article
Ten, each Subsidiary Guarantor will execute the Guarantee in substantially the
form attached to this Indenture as Exhibit C, which shall be endorsed on each
---------
Note ordered to be authenticated and delivered by the Trustee. Each Subsidiary
Guarantor agrees that the Guarantee set forth in this Article Ten shall remain
in full force and effect notwithstanding any failure to endorse on each Note a
notation of the Guarantee. The Guarantee shall be signed on behalf of each
Subsidiary Guarantor by one Officer of such Subsidiary Guarantor (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions), and the delivery of such Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Guarantee on behalf of
such Subsidiary Guarantor. Such signatures upon the Guarantee may be by manual
or facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Guarantee, and in case any such Officer who shall have signed
the Guarantee shall cease to be such officer before the Note on which the
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Note nevertheless may be authenticated and
delivered or disposed of as though the person who signed the Guarantee had not
ceased to be such Officer of such Subsidiary Guarantor.
SECTION 10.07. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each Subsidiary Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive such
Subsidiary Guarantor from performing the Guarantee as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) each Subsidiary Guarantor expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
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ARTICLE ELEVEN
SUBORDINATION OF NOTES
SECTION 11.01. Agreement to Subordinate.
------------------------
The Company agrees, and each Holder of the Notes by accepting a Note
agrees, that the Indebtedness evidenced by the Notes is subordinated in right of
payment, to the extent and in the manner provided in this Article Eleven, to the
prior payment in full in cash of all Senior Indebtedness of the Company and that
the subordination is for the benefit of and enforceable by the holders of such
Senior Indebtedness. The Notes shall in all respects rank pari passu with all
---- -----
other Senior Subordinated Indebtedness of the Company and only Indebtedness
which is Senior Indebtedness shall rank senior to the Notes in accordance with
the provisions set forth herein. All provisions of this Article Eleven shall be
subject to Section 11.12.
SECTION 11.02. Liquidation, Dissolution, Bankruptcy.
------------------------------------
Upon any payment or distribution of the assets of the Company to
creditors upon a total or partial liquidation or a total or partial dissolution
of the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property:
(i) holders of Senior Indebtedness of the Company shall be entitled
to receive payment in full in cash of such Senior Indebtedness of the
Company before Holders shall be entitled to receive any payment of
principal of or interest on the Notes; and
(ii) until such Senior Indebtedness of the Company is paid in full
in cash, any payment or distribution to which Holders would be entitled but
for this Article Eleven shall be made to holders of such Senior
Indebtedness as their interests may appear; and
(iii) if a distribution is made to holders of the Notes that, due
to the subordination provisions, should not have been made to them, such
holders of the Notes are required to hold it in trust for the holders of
Senior Indebtedness and pay it over to them as their interests may appear.
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SECTION 11.03. Default on Senior Indebtedness.
------------------------------
The Company may not pay the principal of, premium (if any) or interest
on the Notes or make any deposit pursuant to Section 8.01 and may not
repurchase, redeem or otherwise retire any Notes (collectively, "pay the Notes")
if (i) any Designated Senior Indebtedness of the Company is not paid in full in
cash when due or (ii) any other default on Designated Senior Indebtedness of the
Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or (y)
such Designated Senior Indebtedness has been paid in full in cash; provided,
--------
however, that the Company may pay the Notes without regard to the foregoing if
-------
the Company and the Trustee receive written notice approving such payment from
the Representative of such Designated Senior Indebtedness. 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 of
the Company pursuant to which the maturity thereof may be accelerated either
immediately without further notice (except such notice as may be required to
effect such acceleration) or after the expiration of any applicable grace
periods, the Company may not pay the Notes 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 of the Company 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 cured,
waived or no longer continuing or (iii) because such Designated Senior
Indebtedness has been discharged or paid in full in cash). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section 11.03), unless the
holders of such Designated Senior Indebtedness of the Company or the
Representative of such holders have accelerated the maturity of such Designated
Senior Indebtedness of the Company, the Company may resume payments on the Notes
after the end of such Payment Blockage Period, including any missed payments.
The Notes shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of the Company during such period. No default
or event of default which existed or was
-101-
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness of the Company initiating such
Payment Blockage Period (whether or not such default is on the same issue of
Designated Senior Indebtedness) shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Designated Senior Indebtedness of the Company, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived in writing for a period of not less than 90
consecutive days subsequent to commencement of such initial Payment Blockage
Period.
SECTION 11.04. Acceleration of Payment of Notes.
--------------------------------
If payment of the Notes is accelerated because of an Event of Default,
the Company or the Trustee shall promptly notify the holders of the Designated
Senior Indebtedness of the Company (or their Representatives) of the
acceleration. The Trustee shall give notice of such acceleration, of which it
has actual knowledge, to all holders of Designated Senior Indebtedness of the
Company. Prior to the Trustee's giving such notice, the Company shall notify the
Trustee of the name and address of any such holder of Designated Senior
Indebtedness of the Company.
SECTION 11.05. When Distribution Must Be Paid Over.
-----------------------------------
If a distribution is made to Holders of the Notes that because of this
Article Eleven should not have been made to them, such Holders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness of the
Company and pay it over to them as their interests may appear and the Trustee
shall not be liable to any holders of Senior Indebtedness of the Company with
respect thereto. With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article Eleven
and no implied covenants or obligations with respect to holders of Senior
Indebtedness of the Company shall be read into this Indenture against the
Trustee.
SECTION 11.06. Subrogation.
-----------
After all Senior Indebtedness of the Company is paid in full in cash
and until the Notes are paid in full, Holders of the Notes shall be subrogated
to the rights of holders of such Senior Indebtedness to receive distributions
applicable to
-102-
such Senior Indebtedness. A distribution made under this Article Eleven to
holders of such Senior Indebtedness of the Company which otherwise would have
been made to Holders of the Notes is not, as between the Company and Holders of
the Notes, a payment by the Company on such Senior Indebtedness of the Company.
SECTION 11.07. Relative Rights.
---------------
This Article Eleven defines the relative rights of Holders of the
Notes and holders of Senior Indebtedness of the Company. Nothing in this
Indenture shall:
(i) impair, as between the Company and Holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms; or
(ii) prevent the Trustee or any Holder of the Notes from exercising
its available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of the Company to receive distributions otherwise
payable to Holders.
SECTION 11.08. Subrogation May Not Be Impaird By The Company.
-------
No right of any holder of Senior Indebtedness of the Company to
enforce the subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or by their failure to
comply with this Indenture.
SECTION 11.09. Rights of Trustee and Paying Agent.
----------------------------------
Notwithstanding Section 11.03, the Trustee or Paying Agent may
continue to make payments on the Notes 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 two Business Days 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 Eleven. The Company, the Registrar or co-
registrar, the Paying Agent, a Representative or a holder of Senior Indebtedness
of the Company may give the notice; provided, however, that, if an issue of
-------- -------
Senior Indebtedness of the Company has a Representative, only the Representative
may give the notice.
-103-
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company 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 Eleven with respect to any Senior Indebtedness of the Company which
may at any time be held by it, to the same extent as any other holder of such
Senior Indebtedness; and nothing in Article Seven shall deprive the Trustee of
any of its rights as such holder. Nothing in this Article Eleven shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07.
SECTION 11.10. Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness of the Company, the distribution may be made and the notice
given to their Representative (if any).
SECTION 11.11. Article Eleven Not To Prevent Events of Default or Limit Right To
-------------------------
Accelerate
----------
The failure to make a payment pursuant to the Notes by reason of any
provision in this Article Eleven shall not be construed as preventing the
occurrence of a Default. Nothing in this Article Eleven shall have any effect
on the right of the Holders or the Trustee to accelerate the maturity of the
Notes.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Company and shall not be liable to any
such holders if it shall in good faith mistakenly pay over or distribute to
Holders of Notes or to the Company or to any other Person cash, property or
securities to which any holders of Senior Indebtedness of the Company shall be
entitled by virtue of this Article Eleven or otherwise.
SECTION 11.12. 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 Eight by the Trustee for the payment of principal of and interest on the
Notes shall not be subordinated to the prior payment of any Senior Indebtedness
of the Company or subject to the restrictions set forth in this Article Eleven,
and none of the Holders of the Notes
-104-
shall be obligated to pay over any such amount to the Company or any holder of
Senior Indebtedness of the Company or any other creditor of the Company.
SECTION 11.13. Trustee Entitled To Rely.
------------------------
Upon any payment or distribution pursuant to this Article Eleven, 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 11.02 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 such
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 Eleven. 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 of the Company to
participate in any payment or distribution pursuant to this Article Eleven, the
Trustee may request such Person to furnish evidence to the satisfaction of the
Trustee as to the amount of such Senior Indebtedness of the Company 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 Eleven, 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. The provisions of Sections 7.01
and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article Eleven.
SECTION 11.14. Trustee To Effectuate Subordination.
-----------------------------------
Each Holder by accepting a Note 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 Holders and the holders of Senior
Indebtedness of the Company as provided in this Article Eleven and appoints the
Trustee as attorney-in-fact for any and all such purposes.
-105-
SECTION 11.15. 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 of the Company and 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 of the Company shall be entitled by virtue of this Article Eleven
or otherwise.
SECTION 11.16. Reliance by Holders of Senior Indebtedness on Subordination.
----------------
Each Holder by accepting a Note 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 of the Company
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Notes, to acquire and continue to hold, or to continue to hold,
such Senior Indebtedness and such holder of such 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 TWELVE
SUBORDINATION OF GUARANTEES
SECTION 12.01. Agreement to Subordinate.
------------------------
Each Subsidiary Guarantor by execution of a Subsidiary Guarantee
jointly and unconditionally will agree, and each Holder by accepting a Note will
agree, that any payment of obligations by each Subsidiary Guarantor in respect
of the Subsidiary Guarantee (its "Subsidiary Guarantee Obligations") is
subordinated in right of payment, to the extent and in the manner provided in
this Article Twelve, to the prior payment in full in cash of all Senior
Indebtedness of such Subsidiary Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Subsidiary Guarantor's Senior
Indebtedness. The Subsidiary Guarantee Obligations shall in all respects rank
pari passu with all other Senior Subordinated Indebtedness of such Subsidiary
---- -----
Guarantors and only Indebtedness which is Senior Indebtedness of such Subsidiary
106
Guarantors shall rank senior to the Subsidiary Guarantee Obligations in
accordance with the provisions set forth herein.
SECTION 12.02. Liquidation, Dissolution, Bankruptcy.
------------------------------------
Upon any payment or distribution of the assets of any Subsidiary
Guarantor to creditors upon a total or partial liquidation or a total or partial
dissolution of such Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Subsidiary
Guarantor or its property:
(1) holders of such Subsidiary Guarantor's Senior Indebtedness
shall be entitled to receive payment in full in cash of such Senior
Indebtedness before Holders shall be entitled to receive any payment with
respect to the Subsidiary Guarantee;
(2) until such Subsidiary Guarantor's Senior Indebtedness is paid
in full in cash, any payment with respect to the Subsidiary Guarantee to
which Holders would be entitled but for this Article Twelve shall be made
to holders of such Senior Indebtedness as their interests may appear; and
(3) if a distribution is made to holders of the Notes that, due to
the subordination provisions, should not have been made to them, such
holders of the Notes are required to hold it in trust for the holders of
Senior Indebtedness and pay it over to them as their interests may appear.
SECTION 12.03. Default on Senior Indebtedness.
------------------------------
A Subsidiary Guarantor may not make any payment with respect to its
Subsidiary Guarantee Obligations or make any deposit pursuant to Section 8.01
(collectively, "pay the Subsidiary Guarantee") if (i) any of such Subsidiary
Guarantor's or the Company's Designated Senior Indebtedness is not paid in full
in cash when due or (ii) any other default on such Subsidiary Guarantor's or the
Company's Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded or (y) such Designated Senior Indebtedness has
been paid in full in cash; provided, however, that the Subsidiary Guarantor may
-------- -------
pay the Subsidiary Guarantee without regard to the foregoing if the Trustee
re-
107
ceives written notice approving such payment from the Representative of such
Designated Senior Indebtedness guaranteed by such Subsidiary Guarantor. During
the continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Subsidiary Guarantor's or
Company's Designated Senior Indebtedness pursuant to which the maturity thereof
may be accelerated either immediately without further notice (except such notice
as may be required to effect such acceleration) or after the expiration of any
applicable grace periods, the Subsidiary Guarantor may not pay the Subsidiary
Guarantee for a period (a "Payment Blockage Period") commencing upon the receipt
by the Trustee (with a copy to such Subsidiary Guarantor) of written notice (a
"Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness of such Subsidiary Guarantor or the Company guaranteed by
such Subsidiary Guarantor 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 such Subsidiary
Guarantor from the Person or Persons who gave such Blockage Notice, (ii) because
the default giving rise to such Blockage Notice is cured, waived or otherwise no
longer continuing or (iii) because such Designated Senior Indebtedness of such
Subsidiary Guarantor and the related Designated Senior Indebtedness of the
Company has been discharged or paid in full). Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section 12.03), unless the holders of
such Subsidiary Guarantor's or the Company's Designated Senior Indebtedness or
the Representative of such holders shall have accelerated the maturity of such
Subsidiary Guarantor's or the Company's Designated Senior Indebtedness, the
Subsidiary Guarantor may resume payments on the Subsidiary Guarantee after
termination of such Payment Blockage Period, including any missed payments. The
Subsidiary Guarantee will not be subject to more than one Payment Blockage
Period in any consecutive 360-day period, irrespective of the number of defaults
with respect to such Designated Senior Indebtedness during such period. No
default or event of default which existed or was continuing on the date of the
commencement of any Payment Blockage Period with respect to the Subsidiary
Guarantor's or the Company' Designated Senior Indebtedness initiating such
Payment Blockage Period (whether or not such default is on the same issue of
Designated Senior Indebtedness) shall be, or be made, the basis of the
commencement of a subsequent Payment Blockage Period by the Representative of
such Subsidiary Guarantor's or the Company' Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such default or
108
event of default shall have been cured or waived for a period of not less than
90 consecutive days subsequent to commencement of such initial Payment Blockage
Period.
SECTION 12.04. Acceleration of Payment of Notes.
--------------------------------
If payment of a Subsidiary Guarantee is accelerated because of an
Event of Default, such Subsidiary Guarantor or the Trustee shall promptly notify
the holders of such Subsidiary Guarantor's or the Company' Designated Senior
Indebtedness (or their Representatives) of the acceleration. The Trustee shall
give notice of such acceleration, of which it has actual knowledge, to all
holders of such Subsidiary Guarantor's or the Company' Designated Senior
Indebtedness. Prior to the Trustee's giving such notice, the Company shall
notify the Trustee of the name and address of any such holder of such Designated
Senior Indebtedness.
SECTION 12.05. When Distribution Must Be Paid Over.
-----------------------------------
If a distribution is made to holders that because of this Article
Twelve should not have been made to them, the Holders who receive the
distribution shall hold it in trust for holders of such Subsidiary Guarantor's
Senior Indebtedness and pay it over to them as their interests may appear, and
the Trustee shall not be liable to any holders of such Subsidiary Guarantor's
Senior Indebtedness. With respect to the holders of such Subsidiary Guarantor's
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants or obligations as are specifically set forth in this Article
Twelve and no implied covenants or obligations with respect to holders of such
Subsidiary Guarantor's Senior Indebtedness shall be read into this Indenture
against the Trustee.
SECTION 12.06. Subrogation.
-----------
After a Subsidiary Guarantor's Senior Indebtedness is paid in full in
cash and until the Subsidiary Guarantees are paid in full, Holders
shall be subrogated to the rights of holders of such Senior Indebtedness to
receive distributions applicable to such Subsidiary Guarantor's Senior
Indebtedness. A distribution made under this Article Twelve to holders of such
Subsidiary Guarantor's Senior Indebtedness which otherwise would have been made
to Holders is not, as between such Subsidiary Guarantor and Holders, a payment
by such Subsidiary Guarantor on such Senior Indebtedness.
109
SECTION 12.07. Relative Rights.
---------------
This Article Twelve defines the relative rights of Holders and holders
of a Subsidiary Guarantor's Senior Indebtedness. Nothing in this Indenture
shall:
(i) impair, as between such Subsidiary Guarantor and Holders, the
obligation of such Subsidiary Guarantor, which is absolute and
unconditional, to pay the Subsidiary Guarantee Obligations in accordance
with their terms; or
(ii) prevent the Trustee or any Holder from exercising its available
remedies upon a Default, subject to the rights of holders of a Subsidiary
Guarantor's Senior Indebtedness to receive distributions otherwise payable
to Holders.
SECTION 12.08. Subordination May Not Be Impaired by a Subsidiary Guarantor.
--------------------
No right of any holder of a Subsidiary Guarantor's Senior Indebtedness
to enforce the subordination of the Indebtedness evidenced by the Subsidiary
Guarantees shall be impaired by any act or failure to act by such Subsidiary
Guarantor or by its failure 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 in respect of a Subsidiary Guarantee 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 two Business Days 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. Such Subsidiary
Guarantor, the Registrar or co-registrar, the Paying Agent, a Representative or
a holder of such Subsidiary Guarantor's Senior Indebtedness may give the notice;
provided, however, that, if an issue of a Subsidiary Guarantor's Senior
-------- -------
Indebtedness has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold a
Subsidiary Guarantor's Senior Indebtedness with the same rights it would have if
it were not Trustee. The Registrar and co-registrar, the Paying Agent and any
agent of any Subsidiary Guarantor may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this
110
Article Twelve with respect to any Subsidiary Guarantor's Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
such Subsidiary Guarantor's Senior Indebtedness; and nothing in Article Seven
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 7.07.
SECTION 12.10. Distribution or Notice to Representative.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
a Subsidiary Guarantor's Senior Indebtedness, the distribution may be made and
the notice given to their Representative (if any).
SECTION 12.11. Article Twelve Not To Prevent Events of Default or Limit Right To
-------------------------
Accelerate
----------
The failure to make a payment relating to the Subsidiary Guarantee
Obligations by reason of any provision in this Article Twelve shall not be
construed as preventing the occurrence of a 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 Notes.
SECTION 12.12. 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 Eight by the Trustee for the payment of principal of and interest on the
Notes shall not be subordinated to the prior payment of any Subsidiary
Guarantor's 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 Subsidiary Guarantor or any holder of such Subsidiary Guarantor's
Senior Indebtedness or any other creditor of such Subsidiary 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)
111
upon the Representatives for the holders of each Subsidiary Guarantor's Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of such Subsidiary Guarantor Senior
Indebtedness and other Indebtedness of any Subsidiary Guarantor's, 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 a Subsidiary Guarantor's
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 satisfaction of the Trustee as to the amount of such Subsidiary Guarantor's
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. The provisions of Sections 7.01 and 7.02 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 Note 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 Holders and the holders of any
Subsidiary Guarantor's 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 Senior Indebtedness of
---------------
Subsidiary Guarantors.
----------------------
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of any Subsidiary Guarantor's Senior Indebtedness and shall not be
liable to any such holders if it shall mistakenly pay over or distribute to
Holders or any Subsidiary Guarantor or any other Person, money or assets to
which any holders of such Subsidiary Guarantor's Senior Indebtedness shall be
entitled by virtue of this Article Twelve or otherwise.
112
SECTION 12.16. Reliance by Holders of Senior Indebtedness of Subsidiary
-------------
Guarantors on Subordination Provisions.
---------------------------------------
Each Holder by accepting a Note acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Subsidiary Guarantor's Senior
Indebtedness whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of such 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 THIRTEEN
MISCELLANEOUS
SECTION 13.01. TIA 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 provisions that may be so excluded, such TIA provision shall be
excluded from this Indenture.
The provision of TIA (S)(S) 310 through 317 that imposes duties on any
Person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are part of and govern this Indenture, whether or
not physically contained therein.
SECTION 13.02. Notices.
-------
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by commercial courier service, by telex, by telecopier or registered or
certified mail, postage prepaid, return receipt requested, addressed as follows:
113
if to the Company or any Subsidiary Guarantor:
Applied Power Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Telephone: (000) 000-0000
Attn: Chief Financial Officer
with a copy to:
Xxxxxxx & Xxxxx LLP
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, III, Esq.
if to the Trustee:
Bank One Trust Company, N.A.
Xxx X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Corporate Trust Department
Each of the Company, the Subsidiary Guarantors and the Trustee by
written notice to each other such Person may designate additional or different
addresses for notices to such Person. Any notice or communication to the
Company, the Subsidiary Guarantors and the Trustee shall be deemed to have been
given or made as of the date so delivered if personally delivered; when receipt
is confirmed if delivered by commercial courier service; when receipt is
acknowledged, if faxed; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid.
Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.
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. If a notice
or communication is mailed
114
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 the TIA section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Subsidiary Guarantors, the Trustee, the Registrar and any other
Person shall have the protection of the TIA section 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take or refrain from taking any action under this
Indenture, the Company or such Subsidiary Guarantor shall furnish to the
Trustee:
(i) an Officers' Certificate, in form and substance satisfactory to
the Trustee, stating that, in the opinion of the signers, all conditions
precedent to be performed by the Company, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company, if
any, provided for in this Indenture relating to the proposed action have
been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
---------------------------------------------
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture, other than the Officers'
Certificate required by Section 4.06, shall include:
(i) a statement that the Person making such certificate or opinion
has read such covenant or condition and the definitions relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
115
(iii) a statement that, in the opinion of such Person, he has made
such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with;
provided, that with respect to matters of fact, an Opinion of Counsel may rely
on an Officers' Certificate or a certificate of an appropriate public official.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
-----------------------------------------
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for their respective functions.
SECTION 13.07. Legal Holidays.
--------------
If a payment date is a Legal Holiday, payment may be made at such
place on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period.
SECTION 13.08. Governing Law.
-------------
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK. EACH OF THE PARTIES
HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 13.09. No Adverse Interpretation of Other Agreements.
----------
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company, any Subsidiary Guarantor or any of their
Subsidiaries or of any other Person. Any such indenture, loan or debt agreement
may not be used to interpret this Indenture.
116
SECTION 13.10. No Recourse Against Others.
--------------------------
No past, present or future member of the Board of Directors, officer,
employee, equityholder or incorporator, as such, of the Company, any Subsidiary
Guarantor or of the Trustee shall have any liability for any obligations of the
Company or any Subsidiary Guarantor under the Notes, any Guarantee 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 Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
SECTION 13.11. Successors.
----------
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 13.12. Multiple Originals.
------------------
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 13.13. Severability.
------------
In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.
SECTION 13.14. Table of Contents, Cross Reference Table and Headings.
-----------------------------------------------------
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms of provisions hereof.
[Signature Pages Follow]
S-1
SIGNATURES
----------
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
APPLIED POWER INC.
By: /s/
-------------------------------------
Name:
Title:
APW TOOLS & SUPPLIES, INC.
By: /s/
-------------------------------------
Name:
Title:
VERSA TECHNOLOGIES, INC.
By: /s/
-------------------------------------
Name:
Title:
APPLIED POWER INVESTMENTS II, INC.
By: /s/
-------------------------------------
Name:
Title:
COLUMBUS MANUFACTURING LLC
By: APPLIED POWER INC.
By: /s/
-------------------------------------
Name:
Title:
-2-
Trustee:
BANK ONE TRUST COMPANY, N.A.,
as Trustee
By: /s/
-------------------------------------
Name:
Title:
RULE 144A/REGULATION S APPENDIX
-------------------------------
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL
BUYERS PURSUANT TO RULE 144A AND TO
CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE
ON REGULATION S
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES,
AND EXCHANGE NOTES
1. Definitions.
1.1 Certain Definitions.
-------------------
For the purposes of this Appendix the following terms shall have the
meanings indicated below, provided that all capitalized terms used but not
defined shall have the meanings given such terms in the Indenture:
"Depositary" means The Depository Trust Company, its nominees and
----------
their respective successors and assigns.
"Exchange Notes" means the 13% Series B Senior Subordinated Notes due
--------------
2009 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston Corporation and
------------------
Xxxxxxx, Xxxxx & Co.
"Initial Notes" means $200,000,000 principal amount of 13% Series A
-------------
Senior Subordinated Notes due 2009, issued on August 1, 2000 in a transaction
exempt from the registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to a
----------------
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
the Initial Purchasers, in exchange for the Initial Notes held by the Initial
Purchasers as part of their initial distribution, a like aggregate principal
amount of Private Exchange Notes.
"Private Exchange Notes" means the 13% Senior Subordinated Private
----------------------
Exchange Notes due 2009, if any, to be issued
APP.-2
pursuant to this Indenture to the Initial Purchasers in a Private Exchange.
"Purchase Agreement" means, with respect to the Initial Notes issued
------------------
on August 1, 2000, the Purchase Agreement dated July 21, 2000, among the
Company, the Subsidiary Guarantors and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
---
"Registered Exchange Offer" means the offer by the Company, pursuant
-------------------------
to a Registration Rights Agreement, to certain Holders of Initial Notes, to
issue and deliver to such Holders, in exchange for such Initial Notes, a like
aggregate principal amount of Exchange Notes registered under the Securities
Act.
"Registration Rights Agreement" means, with respect to the Initial
-----------------------------
Notes issued on August 1, 2000, the Registration Rights Agreement dated August
1, 2000 among the Company, the Subsidiary Guarantors and the Initial Purchasers.
"Securities" means the Initial Notes, the Exchange Notes and the
----------
Private Exchange Notes, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Securities Custodian" means the custodian with respect to a Global
--------------------
Security (as appointed by the Depositary), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the shelf registration statement
----------------------------
issued by the Company, in connection with the offer and sale of Initial Notes,
Exchange Notes or Private Exchange Notes, pursuant to a Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or are
------------------------------
required to bear the legend set forth in Section 2.3(b) hereto.
App.-3
1.2 Other Definitions.
-----------------
Defined
Term in Section:
---- ----------
"Agent Members"......................... 2.1(b)
-------------
"Global Security"....................... 2.1(a)
---------------
"Regulation S".......................... 2.1(a)
------------
"Rule 144A"............................. 2.1(a)
---------
2. The Securities.
--------------
2.1 Form and Dating.
---------------
On the Issue Date, $200,000,000 of the Initial Notes are being offered
and sold by the Company pursuant to the Purchase Agreement.
(a) Global Securities. Initial Notes offered and sold to a QIB in
-----------------
reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance on
---------
Regulation S under the Securities Act ("Regulation S"), in each case as provided
------------
in the Purchase Agreement, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and, in the case of Initial
Notes, the restricted securities legend set forth in Exhibit 1 hereto (each, a
---------
"Global Security"), which shall be deposited on behalf of the purchasers of the
----------------
Initial Notes represented thereby with the Trustee as custodian for the
Depositary (or with such other custodian as the Depositary may direct), and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. 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 and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
---------------------
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary for such
Global Security or Global Securities or the nominee of such Depositary and (b)
shall be delivered by the Trustee to such Depositary or pursu-
App.-4
ant to such Depositary's instructions or held by the Trustee as custodian for
the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
-------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as the custodian of the
Depositary or under such Global Security, and the Depositary may be treated by
the Company, the Subsidiary Guarantors, the Trustee and any agent of the
Company, the Subsidiary Guarantors or the Trustee as the absolute owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Subsidiary Guarantors, the Trustee
or any agent of the Company, the Subsidiary Guarantors or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its Agent
Members, the operation of customary practices of such Depositary governing the
exercise of the rights of a holder of a beneficial interest in any Global
Security.
(c) Certificated Securities. Except as provided in this Section 2.1
-----------------------
or Section 2.3 or 2.4 of this Appendix, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
On the Issue Date, $200.0 million 13% Series A Senior Subordinated Notes due
2009 and (2) Exchange Notes or Private Exchange Notes for issue in a Registered
Exchange Offer or a Private Exchange, respectively, in exchange for a like
principal amount of Initial Notes, in each case upon a written order of the
Company. Such order shall specify the amount of the Securities to be
authenticated and the date on which the original issue of Notes is to be
authenticated and whether the Securities are to be Initial Notes, Exchange Notes
or Private Exchange Notes.
2.3 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Securities.
------------------------------------------
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depositary therefor. A
transferor of a beneficial interest in a Global Security
App.-5
shall deliver to the Registrar a written order given in accordance with the
Depositary's procedures containing information regarding the participant
account of the Depositary to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with such instructions
instruct the Depositary to credit to the account of the Person specified in
such instructions a beneficial interest in the Global Security and to debit
the account of the Person making the transfer the beneficial interest in
the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4 of this Appendix), a Global
Security may not be transferred as a whole except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 of this
Appendix or Section 2.09 of the Indenture, prior to the consummation of a
Registered Exchange Offer or the effectiveness of a Shelf Registration
Statement with respect to such Securities, such Securities may be exchanged
only in accordance with such procedures as are substantially consistent
with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Notes intended to
ensure that such transfers comply with Rule 144A or Regulation S, as the
case may be) and such other procedures as may from time to time be adopted
by the Company.
(b) Legend.
------
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing Initial Notes and Private
Exchange Notes (and all Securities issued in exchange therefor or in
substitution thereof, other than Exchange Notes) shall bear a legend in
substantially the following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
App.-6
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER
OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF APPLIED POWER INC.
THAT (A) THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERED ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE UNITED STATES IN A
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES; AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the Holder thereof to exchange such Transfer Restricted
Security for a certificated Security that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer
Restricted Security, if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Notes or Private Exchange
Notes pursuant to, and during the period of the effectiveness of, a Shelf
Registration Statement with respect to such Initial Notes or Private
Exchange Notes, as the case may be, all requirements pertaining to legends
on such Initial Notes or such Private Exchange Notes will cease to apply,
but the requirements requiring such Initial Notes or such Private Exchange
Notes issued to certain Holders be issued in global form will continue to
ap-
App.-7
ply, and Initial Notes or Private Exchange Notes in global form without
legends will be available to the transferee of the Holder of such Initial
Notes or Private Exchange Notes upon exchange of such transferring Holder's
Initial Notes or Private Exchange Notes or directions to transfer such
Holder's interest in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will continue to apply and Initial
Notes in global form with the restricted securities legend set forth in
Exhibit 1 hereto will be available to Holders of such Initial Notes that do
---------
not exchange their Initial Notes, and Exchange Notes in global form without
the restricted securities legend set forth in Exhibit 1 hereto will be
---------
available to Holders that exchange such Initial Notes in such Registered
Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Notes pursuant to which Holders of such Initial Notes are offered
Private Exchange Notes in exchange for their Initial Notes, all
requirements pertaining to such Initial Notes that Initial Notes issued to
certain Holders be issued in global form will still apply, and Private
Exchange Notes in global form with the restricted securities legend set
forth in Exhibit 1 hereto will be available to Holders that exchange such
---------
Initial Notes in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depositary for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
repurchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
App.-8
(d) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
-----
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities
and Global Securities at the Registrar's or any co-registrar's request.
(ii) 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, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.09, 3.06, 4.14, 4.15 and Section 9.05 of
the Indenture).
(iii) The Registrar or any co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article III of the
Indenture, except the unredeemed portion of any certificated Security being
redeemed in part, or (b) any Security for a period beginning 15 days before
the mailing of a notice of an offer to repurchase or redeem Securities or
15 days before an Interest Payment Date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of the Indenture shall evidence the same debt and shall be
entitled to the same benefits under the Indenture as the Securities
surrendered upon such transfer or exchange.
App.-9
(e) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depositary or other Person with respect to the accuracy of the records of
the Depositary or its nominee or of any participant or member thereof, with
respect to any ownership interest in the Securities or with respect to the
delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and
all payments to be made to Holders under the Securities shall be given or
made only to or upon the order of the registered Holders (which shall be
the Depositary or its nominee in the case of a Global Security). The rights
of beneficial owners in any Global Security shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under the Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depositary participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of the Indenture and the
Securities, and to examine the same to determine substantial compliance as
to form with the express requirements hereof.
2.4 Certificated Securities.
-----------------------
(a) A Global Security deposited with the Depositary or with the
Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary noti-
App.-10
fies the Company that it is unwilling or unable to continue as Depositary for
such Global Security or if at any time such Depositary ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of certificated Securities under the Indenture or (iii) if there shall
have occurred and be continuing an Event of Default with respect to the
Securities.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section shall be surrendered by the Depositary to the
Trustee, to be so transferred, in whole or from time to time in part, without
charge, and the Trustee shall authenticate and deliver, upon such transfer of
each portion of such Global Security, an equal aggregate principal amount of
certificated Securities of authorized denominations. Any portion of a Global
Security transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 and any integral multiple thereof
and registered in such names as the Depositary shall direct. Any certificated
Initial Note delivered in exchange for an interest in the Global Security shall,
except as otherwise provided by Section 2.3(b), bear the restricted securities
legend set forth in Exhibit 1 hereto.
---------
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security may grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under the
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a) above, the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
---------
TO RULE 144A/REGULATION S
-------------------------
APPENDIX
--------
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE ISSUERS OR THEIR AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN,
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A)
THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) INSIDE
THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) OUTSIDE THE
UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES
ACT, (iii) PURSUANT TO AN
-2-
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iv) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO
IN (A) ABOVE.
-3-
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Principal
Signature of Amount of Amount of Amount of
authorized Decrease in Increase in this Global
officer Principal Principal Security
of Trustee or Amount of Amount of following
Date of Securities this Global this Global such decrease
Exchange Custodian Security Security or increase
-------------- ---------------- --------------- ----------------- -----------------
EXHIBIT A
---------
[FORM OF INITIAL NOTE]
CUSIP No.:
APPLIED POWER INC.
13% SERIES A SENIOR SUBORDINATED NOTE DUE 2009
No. $
APPLIED POWER INC., a Wisconsin corporation (the "Company", which term
-------
includes any successor entity), for value received, promises to pay to
__________ or registered assigns, the principal sum of ________________, on May
1, 2009.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
A-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
APPLIED POWER INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
Dated: [ ], [ ]
Certificate of Authentication
-----------------------------
This is one of the 13% Series A Senior Subordinated Notes due 2009
referred to in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, N.A.
as Trustee
Dated: [ ], [ ] By: _______________________________
Authorized Signatory
A-2
(REVERSE OF SECURITY)
13% SERIES A SENIOR SUBORDINATED NOTE DUE 2009
1. Interest. APPLIED POWER INC., a Wisconsin corporation (the
--------
"Company"), promises to pay interest on the principal amount of this Note at the
-------
rate per annum shown above; provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, additional interest
will accrue on this Note at a rate of 0.50% per annum for the first 90-day
period immediately following the occurrence of such Registration Default
regardless of the number of such Registration Defaults (such rate increasing by
an additional 0.50% per annum with respect to each subsequent 90-day period) up
to a maximum additional interest rate of 2.0% per annum, from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured, calculated on the
principal amount of this Note as of the date on which such interest is payable.
Such interest is payable in addition to any other interest payable from time to
time with respect to this Note. The Trustee will not be deemed to have notice of
a Registration Default until it shall have received actual notice of such
Registration Default. Interest on the Notes will accrue from the most recent
date on which interest has been paid or, if no interest has been paid, from
August 1, 2000. The Company will pay interest semi-annually in arrears on each
Interest Payment Date, commencing November 1, 2000. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal at the rate borne
by the Notes plus 1% per annum and on overdue installments of interest (without
regard to any applicable grace periods) at such higher rate to the extent
lawful.
2. Method of Payment. The Company shall pay interest on the Notes
-----------------
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
-----------------
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may
A-3
deliver any such interest payment to the Paying Agent or to a Holder at the
Holder's registered address.
3. Paying Agent and Registrar. Initially, Bank One Trust Company,
--------------------------
N.A. (the "Trustee") will act as Paying Agent and Registrar. The Company may
change any Paying Agent, Registrar or co-Registrar without notice to the
Holders.
4. Indenture and Guarantees. The Company issued the Notes under an
------------------------
Indenture, dated as of August 1, 2000 (the "Indenture"), among the Company, the
---------
Subsidiary Guarantors and the Trustee. This Note is one of a duly authorized
issue of Initial Notes of the Company designated as its 13% Series A Senior
Subordinated Notes due 2009. The Initial Notes and any Private Exchange Notes
and Exchange Notes issued pursuant to the Indenture are treated as a single
class of securities under the Indenture. Capitalized terms herein are used as
defined in the Indenture unless otherwise defined herein. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
---
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured obligations of the Company. To the extent of any
conflict between the terms of the Notes and the Indenture, the applicable terms
of the Indenture shall govern. The Notes are entitled to the benefits of the
Guarantees by the Subsidiary Guarantors made for the benefit of the Holders.
Reference is hereby made to the Indenture for a statement of the respective
rights, limitations of rights, duties and obligations thereunder of the Trustee,
the Holders and the Subsidiary Guarantors.
5. Redemption.
----------
(a) Optional Redemption. Except as set forth below, the Notes will
-------------------
not be redeemable at the option of the Company prior to May 1, 2007. On and
after May 1, 2007, the Notes will be redeemable, at the Company's option, in
whole or in part, at any time or from time to time, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on May 1 of the years set forth below:
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Redemption
Period Price
------ ----------
2007........................................ 102.170%
2008 and thereafter......................... 100.000%
(b) Optional Redemption Upon Public Equity Offerings. In addition,
------------------------------------------------
at any time and from time to time prior to May 1, 2003, the Company may redeem
in the aggregate up to 35% of the original principal amount of the Notes with
the net cash proceeds from one or more Public Equity Offerings, at a redemption
price (expressed as a percentage of principal amount) of 113% plus accrued and
unpaid interest to the redemption date (subject to the right of Holders of
record of the relevant record date to receive interest due on the relevant
interest payment date); provided, that (1) at least 65% of the aggregate
principal amount of the Notes originally outstanding must remain outstanding
after the occurrence of each such redemption and (2) each such redemption must
occur within 75 days after the consummation of the related Public Equity
Offering.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1,000.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued and unpaid interest, if any, the
Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued and unpaid interest, if
any.
7. Offers to Purchase. Sections 4.14, 4.15 and 4.23 of the
------------------
Indenture provide that, in the event of certain Asset Dispositions, upon the
occurrence of a Change of Control and in the event the Company has Excess Cash
Flow for any fiscal year commencing with fiscal 2001, and subject to further
limitations contained therein, the Company will make an offer to purchase
certain amounts of the Notes in accordance with the procedures set forth in the
Indenture.
A-5
8. Registration Rights. Pursuant to the terms, and subject to the
-------------------
provisions of the Registration Rights Agreement, the Company will be obligated
to consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for the Company's 13% Series B Senior
Subordinated Notes due 2009 in the form of Exchange Notes, which shall have been
registered under the Securities Act, or the Company's 13% Senior Subordinated
Private Exchange Notes due 2009 (the "Private Exchange Notes"), in each case in
----------------------
like principal amount and having terms identical in all material respects to the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments if such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement. The Company shall notify the
Trustee of the amount of any such payments.
9. Subordination.
-------------
The Notes are subordinated in right of payment, in the manner and to
the extent set forth in the Indenture, to the prior payment in full in cash of
all Senior Indebtedness of the Company, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder
by his acceptance hereof agrees to be bound by such provisions and authorizes
and expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
10. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the terms, and subject to the provisions of the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption (except, in the case of Notes
to be redeemed in part, the portion of such Notes not to be redeemed) or any
Note for a period beginning 15 days before the mailing of a notice of an offer
to repurchase or a notice of redemption or 15 days before any Interest Payment
Date.
11. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
A-6
12. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposit with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company and the Subsidiary Guarantors will be discharged from
certain provisions of the Indenture and the Notes and the Guarantees (including
certain covenants, but excluding the Company's obligation to pay the principal
of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture or the Notes or the Guarantees may be amended or supplemented with
the written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, omission, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Restricted Subsidiaries, merge
or consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
16. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predeces-
A-7
sor under the Notes and the Indenture, the predecessor will be released from
those obligations.
17. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, the Subsidiary Guarantors or
their respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No past, present or future
--------------------------
equityholder, member of the Board of Directors, officer, employee or
incorporator, as such, of the Company or the Subsidiary Guarantors shall have
any liability for any obligation of the Company or the Subsidiary Guarantors
under the Notes or the Indenture or the Guarantees or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of
a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
21. Governing Law. The Laws of the State of New York shall govern
-------------
this Note and the Indenture (and the Guarantees relating thereto).
22. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note or an
A-8
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
25. Holders' Compliance with Registration Rights Agreement. Each
------------------------------------------------------
Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: Applied
Power Inc., 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxx 00000, Attention: Chief
Financial Officer.
A-9
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code
and social security or tax ID number of assignee)
and irrevocably appoint _______________________________, agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Date:_______________ Signed:___________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:_______________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
--------------
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) two years from date of original issuance, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Note is being
transferred:
A-10
[Check One]
(1)__ to the Company or a subsidiary thereof; or
(2)__ pursuant to and in compliance with Rule 144A under the Securities Act; or
(3)__ outside the United States to a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act; or
(4)__ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(5)__ pursuant to an effective registration statement under the Securities Act;
or
(6)__ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (6) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in the Appendix to the Indenture shall have been satisfied.
Date:_______________ Signed:___________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:____________________________________________________________
A-11
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:_______________ Signed:___________________________________
NOTICE: To be executed by
an executive officer
A-12
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14, Section 4.15 or Section 4.23 of the Indenture, check
the appropriate box:
Section 4.14 [_]
Section 4.15 [_]
Section 4.23 [_]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14, Section 4.15 or Section 4.23 of the Indenture,
state the amount you elect to have purchased:
$________________________
Dated: _________________ __________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Signature Guarantee:__________________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
A-13
EXHIBIT B
---------
[FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE]
CUSIP No.:
APPLIED POWER INC.
13% SERIES B SENIOR SUBORDINATED NOTE DUE 2009
No. $
APPLIED POWER INC., a Wisconsin corporation (the "Company", which term
-------
includes any successor entity), for value received, promises to pay to
_________. or registered assigns, the principal sum of ________________, on May
1, 2009.
Interest Payment Dates: May 1 and November 1
Record Dates: April 15 and October 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
B-1
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
APPLIED POWER INC.
By: ____________________________________
Name:
Title:
By: ____________________________________
Name:
Title:
Dated: [ ], [ ]
Certificate of Authentication
-----------------------------
This is one of the 13% Series B Senior Subordinated Notes due 2009
referred to in the within-mentioned Indenture.
BANK ONE TRUST COMPANY, N.A.,
as Trustee
Dated: [ ], [ ] By: ____________________________________
Authorized Signatory
B-2
(REVERSE OF SECURITY)
13% SERIES B SENIOR SUBORDINATED NOTE DUE 2009
1. Interest. APPLIED POWER INC., a Wisconsin corporation (the "Company"),
-------- -------
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from August 1,
2000. The Company will pay interest semi-annually in arrears on each Interest
Payment Date, commencing November 1, 2000. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal at the rate borne
by the Notes plus 1% per annum and on overdue installments of interest (without
regard to any applicable grace periods) at such higher rate to the extent
lawful.
2. Method of Payment. The Company shall pay interest on the Notes (except
-----------------
defaulted interest) to the Persons who are the registered Holders at the close
of business on the Record Date immediately preceding the Interest Payment Date
even if the Notes are cancelled on registration of transfer or registration of
exchange after such Record Date. Holders must surrender Notes to a Paying Agent
to collect principal payments. The Company shall pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender"). However, the Company
-----------------
may pay principal and interest by its check payable in such U.S. Legal Tender.
The Company may deliver any such interest payment to the Paying Agent or to a
Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, Bank One Trust Company, N.A.
--------------------------
(the "Trustee") will act as Paying Agent. The Company may change any Paying
-------
Agent, Registrar or co-Registrar without notice to the Holders.
4. Indenture and Guarantees. The Company issued the Notes under an
------------------------
Indenture, dated as of August 1, 2000 (the "Indenture"), among the Company, the
---------
Subsidiary Guarantors and the Trustee. This Note is one of a duly authorized
issue of Initial Notes of the Company designated as its 13% Series B Senior
Subordinated Notes due 2009. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to
B-3
the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) (the "TIA"),
---
as in effect on the date of the Indenture. Notwithstanding anything to the
contrary herein, the Notes are subject to all such terms, and Holders of Notes
are referred to the Indenture and the TIA for a statement of them. The Notes are
general unsecured obligations of the Company. To the extent of any conflict
between the terms of the Notes and the Indenture, the applicable terms of the
Indenture shall govern. The Notes are entitled to the benefits of the Guarantees
by the Subsidiary Guarantors made for the benefit of the Holders. Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Trustees, the
Holders and any Subsidiary Guarantors.
5. Redemption.
----------
(a) Optional Redemption. Except as set forth below, the Notes will
-------------------
not be redeemable at the option of the Company prior to May 1, 2007. On and
after May 1, 2007, the Notes will be redeemable, at the Company's option, in
whole or in part, at any time or from time to time, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each Holder's
registered address, at the following redemption prices (expressed in percentages
of principal amount), plus accrued and unpaid interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on May 1 of the years set forth below:
Redemption
Period Price
------ ----------
2007........................................ 102.170%
2008 and thereafter......................... 100.000%
(b) Optional Redemption Upon Public Equity Offerings. In addition,
------------------------------------------------
at any time and from time to time prior to May 1, 2003, the Company may redeem
in the aggregate up to 35% of the original principal amount of the Notes with
the net cash proceeds from one or more Public Equity Offerings, at a redemption
price (expressed as a percentage of principal amount) of 113% plus accrued and
unpaid interest to the redemption date (subject to the right of Holders of
record in the relevant record date to receive interest due on the relevant
interest payment date); provided, that (1) at least 65% of the aggregate
principal amount of the Notes originally outstanding (including the original
principal amount of any Additional Notes) must re-
B-4
main outstanding after the occurrence of each such redemption and (2) each such
redemption must occur within 75 days after the consummation of the related
Public Equity Offering.
6. Notice of Redemption. Notice of redemption will be mailed at
--------------------
least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1,000.
Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued and unpaid interest, if any, the
Notes called for redemption will cease to bear interest from and after such
Redemption Date and the only right of the Holders of such Notes will be to
receive payment of the Redemption Price plus accrued and unpaid interest, if
any.
7. Offers to Purchase. Sections 4.14, 4.15 and 4.23 of the Indenture
------------------
provide that, in the event of certain Asset Dispositions, upon the occurrence of
a Change of Control and in the event the Company has Excess Cash Flow for any
fiscal year commencing with fiscal 2001, and subject to further limitations
contained therein, the Company will make an offer to purchase certain amounts of
the Notes in accordance with the procedures set forth in the Indenture.
8. Subordination.
-------------
The Notes are subordinated in right of payment, in the manner and to
the extent set forth in the Indenture, to the prior payment in full in cash of
all Senior Indebtedness of the Company, whether outstanding on the date of the
Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder
by his acceptance hereof agrees to be bound by such provisions and authorizes
and expressly directs the Trustee, on his behalf, to take such action as may be
necessary or appropriate to effectuate the subordination provided for in the
Indenture and appoints the Trustee his attorney-in-fact for such purposes.
9. Denominations; Transfer; Exchange. The Notes are in registered
---------------------------------
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the terms, and subject to the provisions of the Indenture. The
B-5
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption (except, in the case of Notes
to be redeemed in part, the portion of such Notes not to be redeemed) or any
Note for a period beginning 15 days before the mailing of a notice of an offer
to repurchase or a notice of redemption or 15 days before any Interest Payment
Date.
10. Persons Deemed Owners. The registered Holder of a Note shall be
---------------------
treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
---------------
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company at any
-----------------------------------------
time deposit with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company and the Subsidiary Guarantors will be discharged from
certain provisions of the Indenture, the Notes and the Guarantees (including
certain covenants, but excluding the Company's obligation to pay the principal
of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain exceptions,
-----------------------------
the Indenture, the Notes or the Guarantees may be amended or supplemented with
the written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, omission, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
B-6
14. Restrictive Covenants. The Indenture imposes certain limitations
---------------------
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make payments in respect of its Capital
Stock or certain Indebtedness, enter into transactions with Affiliates, create
dividend or other payment restrictions affecting Restricted Subsidiaries, merge
or consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with the
----------
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and is
---------------------
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the Indenture,
-----------------------------
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, the Subsidiary Guarantors or
their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No past, present or future
--------------------------
equityholder, member of the Board of Directors, officer, employee or
incorporator, as such, of the Company or the Subsidiary Guarantors shall have
any liability for any obligation of the Company or the Subsidiary Guarantors
under the Notes or the Indenture or the Guarantees or for any claim based on, in
B-7
respect of or by reason of, such obligations or their creation. Each Holder of
a Note by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid until the Trustee
--------------
or Authenticating Agent manually signs the certificate of authentication on this
Note.
20. Governing Law. The Laws of the State of New York shall govern
-------------
this Note and the Indenture (and the Guarantees relating thereto).
21. Abbreviations and Defined Terms. Customary abbreviations may be
-------------------------------
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by the
-------------
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.
23. Indenture. Each Holder, by accepting a Note, agrees to be bound
---------
by all of the terms and provisions of the Indenture, as the same may be amended
from time to time.
The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture. Requests may be made to: Applied
Power Inc., 0000 Xxxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxx 00000, Attention: Chief
Financial Officer.
B-8
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code
and social security or tax ID number of assignee)
and irrevocably appoint _______________________________, agent to transfer this
Note on the books of the Company. The agent may substitute another to act for
him.
Date:_______________ Signed:____________________________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee:_______________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
[In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
--------------
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) two years from date of original issuance, the undersigned
confirms that it has not utilized any general solicitation or general
advertising in connection with the transfer and that this Note is being
transferred:
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[Check One]
(1)__ to the Company or a subsidiary thereof; or
(2)__ pursuant to and in compliance with Rule 144A under the Securities Act; or
(3)__ outside the United States to a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act; or
(4)__ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(5)__ pursuant to an effective registration statement under the Securities Act;
or
(6)__ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (6) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in the Appendix to the Indenture shall have been satisfied.
Date:_______________ Signed:___________________________________________
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:____________________________________________________________
B-10
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Date:_______________ Signed:___________________________________
NOTICE: To be executed by
an executive officer]/a/
__________________
/a/ To be included in Private Exchange Notes only.
B-11
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14, Section 4.15 or Section 4.23 of the Indenture, check
the appropriate box:
Section 4.14 [ ]
Section 4.15 [ ]
Section 4.23 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14, Section 4.15 or Section 4.23 of the Indenture,
state the amount you elect to have purchased:
$________________________
Dated: _________________ _________________________________________________
NOTICE: The signature on this assignment must
correspond with the name as it appears upon the
face of the within Note in every particular
without alteration or enlargement or any change
whatsoever and be guaranteed by the endorser's
bank or broker.
Signature Guarantee:__________________________
(Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended).
B-12
EXHIBIT C
---------
[FORM OF GUARANTEE]
GUARANTEE
Each of the undersigned (the "Subsidiary Guarantors"), jointly and
---------------------
severally unconditionally guarantee on a senior subordinated basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Guarantee") (i) the due and punctual payment of the principal of and interest
---------
on the Notes, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal and interest, if any, on the Notes, to the extent lawful, and
the due and punctual performance of all other obligations of the Company to the
Holders or the Trustee all in accordance with the terms set forth in Article Ten
of the Indenture and (ii) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that the same will be promptly
paid in full when due or performed in accordance with the terms of the extension
or renewal, whether at stated maturity, subject to any applicable grace period,
by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Notes
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth in Article Ten of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Guarantee therein made.
No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of each Subsidiary Guarantor shall have any liability
under the Guarantee by reason of his or its status as such stockholder, officer,
director, employee or incorporator.
C-1
The Guarantee shall not be valid or obligatory for any purpose until
this certificate of authentication on the Notes upon which the Guarantee is
noted shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
[GUARANTORS]
By:_____________________________
Name:
Title:
C-2
