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EXHIBIT 4.1
Execution Copy
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INDENTURE
Dated as of June 4, 1998
among
HOME INTERIORS & GIFTS, INC., as Issuer,
and
The Guarantors Named Herein
and
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
------------------------------------
$200,000,000
10 1/8% Series A Senior Subordinated Notes due
2008 10 1/8% Series B Senior Subordinated Notes
due 2008
================================================================================
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CROSS-REFERENCE TABLE
TRUST INDENTURE INDENTURE
ACT SECTION SECTION
----------- -------
Section 310(a)(1)....................................... 8.10
(a)(2).......................................... 8.10
(a)(3).......................................... N.A.
(a)(4).......................................... N.A.
(a)(5).......................................... 8.08, 8.10
(b)............................................. 8.08; 8.10; 13.02
(c)............................................. N.A.
Section 311(a).......................................... 8.11
(b)............................................. 8.11
(c)............................................. N.A.
Section 312(a).......................................... 2.05
(b)............................................. 13.03
(c)............................................. 13.03
Section 313(a).......................................... 8.06
(b)(1).......................................... N.A.
(b)(2).......................................... 8.06
(c)............................................. 8.06; 13.02
(d)............................................. 8.06
Section 314(a).......................................... 4.11; 4.12, 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.
Section 315(a).......................................... 8.01(b)
(b)............................................. 8.05; 13.02
(c)............................................. 8.01(a)
(d)............................................. 8.01(c)
(e)............................................. 6.11
Section 316(a)(last sentence)........................... 2.09
(a)(1)(A)....................................... 6.05
(a)(1)(B)....................................... 6.04
(a)(2).......................................... N.A.
(b)............................................. 6.07
(c)............................................. 10.04
Section 317(a)(1)....................................... 6.08
(a)(2).......................................... 6.09
(b)............................................. 2.04
Section 318(a).......................................... 13.01
----------------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
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TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions...............................................1
Section 1.02 Incorporation by Reference of Trust Indenture Act........13
Section 1.03 Rules of Construction....................................13
ARTICLE 2
THE SECURITIES
Section 2.01 Form and Dating..........................................13
Section 2.02 Execution and Authentication.............................14
Section 2.03 Registrar and Paying Agent...............................14
Section 2.04 Paying Agent To Hold Assets in Trust.....................15
Section 2.05 Holder Lists.............................................15
Section 2.06 Transfer and Exchange....................................15
Section 2.07 Replacement Securities...................................16
Section 2.08 Outstanding Securities...................................16
Section 2.09 Treasury Securities......................................16
Section 2.10 Temporary Securities.....................................16
Section 2.11 Cancellation.............................................17
Section 2.12 Defaulted Interest.......................................17
Section 2.13 CUSIP Number.............................................17
Section 2.14 Deposit of Moneys........................................17
Section 2.15 Book-Entry Provisions for Global Securities..............17
Section 2.16 Registration of Transfers and Exchanges..................18
ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee.......................................21
Section 3.02 Selection of Securities To Be Redeemed...................21
Section 3.03 Notice of Redemption.....................................22
Section 3.04 Effect of Notice of Redemption...........................22
Section 3.05 Deposit of Redemption Price..............................22
Section 3.06 Securities Redeemed in Part..............................23
ARTICLE 4
COVENANTS
Section 4.01 Payment of Securities....................................23
Section 4.02 Maintenance of Office or Agency..........................23
Section 4.03 Limitation on Transactions with Affiliates...............23
Section 4.04 Limitation on Incurrence of Additional Indebtedness and
Issuance of Capital Stock................................24
Section 4.05 Limitation on Layering...................................24
Section 4.06 Payments for Consents....................................24
Section 4.07 Limitation on Investment Company Status..................24
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Section 4.08 Limitation on Asset Sales................................24
Section 4.09 Limitation on Restricted Payments........................25
Section 4.10 Notice of Defaults.......................................27
Section 4.11 Reports..................................................27
Section 4.12 Limitations on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries........................27
Section 4.13 Subsidiary Guarantees by Restricted Subsidiaries.........28
Section 4.14 Change of Control........................................28
Section 4.15 Limitation on Liens......................................29
Section 4.16 Compliance Certificate...................................30
Section 4.17 Corporate Existence......................................30
Section 4.18 Maintenance of Properties and Insurance..................30
Section 4.19 Payment of Taxes and Other Claims........................30
Section 4.20 Waiver of Stay, Extension or Usury Laws..................30
ARTICLE 5
MERGERS; SUCCESSOR CORPORATION
Section 5.01 Merger, Consolidation and Sale of Assets.................31
Section 5.02 Successor Corporation Substituted........................31
ARTICLE 6
DEFAULT AND REMEDIES
Section 6.01 Events of Default........................................31
Section 6.02 Acceleration.............................................32
Section 6.03 Other Remedies...........................................33
Section 6.04 Waiver of Past Default...................................33
Section 6.05 Control by Majority......................................33
Section 6.06 Limitation on Suits......................................34
Section 6.07 Rights of Holders To Receive Payment.....................34
Section 6.08 Collection Suit by Trustee...............................34
Section 6.09 Trustee May File Proofs of Claim.........................34
Section 6.10 Priorities...............................................35
Section 6.11 Undertaking for Costs....................................35
ARTICLE 7
SUBORDINATION OF SECURITIES
Section 7.01 Agreement To Subordinate.................................35
Section 7.02 Liquidation, Dissolution, Bankruptcy.....................35
Section 7.03 Default on Senior Indebtedness...........................36
Section 7.04 Acceleration of Payment of Securities....................36
Section 7.05 When Distribution Must Be Paid Over......................36
Section 7.06 Subrogation..............................................37
Section 7.07 Relative Rights..........................................37
Section 7.08 Subordination May Not Be Impaired by Company.............37
Section 7.09 Rights of Trustee and Paying Agent.......................37
Section 7.10 Distribution or Notice to Representative.................37
Section 7.11 Article 7 Not To Prevent Events of Default or Limit
Right To Accelerate......................................37
Section 7.12 Trust Moneys Not Subordinated............................37
Section 7.13 Trustee Entitled To Rely.................................38
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Section 7.14 Trustee To Effectuate Subordination......................38
Section 7.15 Trustee Not Fiduciary for Holders of Senior Indebtedness.38
Section 7.16 Reliance by Holders of Senior Indebtedness on
Subordination Provisions.................................38
ARTICLE 8
TRUSTEE
Section 8.01 Duties of Trustee........................................38
Section 8.02 Rights of Trustee........................................39
Section 8.03 Individual Rights of Trustee.............................40
Section 8.04 Trustee's Disclaimer.....................................40
Section 8.05 Notice of Defaults.......................................40
Section 8.06 Reports by Trustee to Holders............................40
Section 8.07 Compensation and Indemnity...............................40
Section 8.08 Replacement of Trustee...................................41
Section 8.09 Successor Trustee by Merger, etc.........................42
Section 8.10 Eligibility; Disqualification............................42
Section 8.11 Preferential Collection of Claims Against the Company....42
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01 Termination of the Company's Obligations.................43
Section 9.02 Legal Defeasance and Covenant Defeasance.................43
Section 9.03 Conditions to Legal Defeasance or Covenant Defeasance....44
Section 9.04 Application of Trust Money; Trustee Acknowledgment and
Indemnity................................................45
Section 9.05 Repayment to Company.....................................45
Section 9.06 Reinstatement............................................45
ARTICLE 10
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 10.01 Without Consent of Holders...............................45
Section 10.02 With Consent of Holders..................................46
Section 10.03 Compliance with Trust Indenture Act......................47
Section 10.04 Record Date for Consents and Effect of Consents..........47
Section 10.05 Notation on or Exchange of Securities....................47
Section 10.06 Trustee To Sign Amendments, etc..........................47
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01 Unconditional Guarantee..................................47
Section 11.02 Severability.............................................48
Section 11.03 Release of a Guarantor...................................48
Section 11.04 Limitation of Guarantor's Liability......................48
Section 11.05 Contribution.............................................49
Section 11.06 Execution of Subsidiary Guarantee........................49
Section 11.07 Subordination of Subrogation and Other Rights............49
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ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTEE
Section 12.01 Agreement To Subordinate.................................49
Section 12.02 Liquidation, Dissolution, Bankruptcy.....................49
Section 12.03 Default on Guarantor Senior Indebtedness.................50
Section 12.04 Acceleration of Payment of Securities....................50
Section 12.05 When Distribution Must Be Paid Over......................51
Section 12.06 Subrogation..............................................51
Section 12.07 Relative Rights..........................................51
Section 12.08 Subordination May Not Be Impaired by Guarantor...........51
Section 12.09 Rights of Trustee and Paying Agent.......................51
Section 12.10 Distribution or Notice to Representative.................51
Section 12.11 Article 12 Not To Prevent Events of Default or Limit
Right To Accelerate......................................51
Section 12.12 Trust Moneys Not Subordinated............................52
Section 12.13 Trustee Entitled To Rely.................................52
Section 12.14 Trustee To Effectuate Subordination......................52
Section 12.15 Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness.............................................52
Section 12.16 Reliance by Holders of Guarantor Senior Indebtedness on
Subordination Provisions.................................52
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls.............................52
Section 13.02 Notices..................................................53
Section 13.03 Communications by Holders with Other Holders.............54
Section 13.04 Certificate and Opinion as to Conditions Precedent.......54
Section 13.05 Statements Required in Certificate.......................54
Section 13.06 Rules by Trustee, Paying Agent, Registrar................54
Section 13.07 Governing Law............................................54
Section 13.08 No Recourse Against Others...............................54
Section 13.09 Successors...............................................55
Section 13.10 Counterpart Originals....................................55
Section 13.11 Severability.............................................55
Section 13.12 No Adverse Interpretation of Other Agreements............55
Section 13.13 Legal Holidays...........................................55
EXHIBIT A Form of Series A Security................................A-1
EXHIBIT B Form of Series B Security................................B-1
EXHIBIT C Form of Legend for Global Securities.....................C-1
EXHIBIT D Form of Transfer Certificate.............................D-1
EXHIBIT E Form of Transfer Certificate for Institutional
Accredited Investors.....................................E-1
EXHIBIT F Form of Transfer Certificate for Regulation S Transfers..F-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of this Indenture.
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INDENTURE dated as of June 4, 1998, among HOME INTERIORS & GIFTS, INC.,
a Texas corporation (the "Company"), the Guarantors named herein, and UNITED
STATES TRUST COMPANY OF NEW YORK, as trustee (the "Trustee").
Each party hereto agrees as follows for the benefit of each other party
and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01 Definitions.
"144A Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Initial
Securities sold in reliance on Rule 144A.
"Acquired Indebtedness" means Indebtedness of a Person or any
of its Subsidiaries existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or assumed in connection with the
acquisition of assets from such Person and not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation.
"Acquired Preferred Stock" means the Preferred Stock of any
Person at such time as such Person becomes a Restricted Subsidiary of the
Company or at the time it merges or consolidates with the Company or any of its
Restricted Subsidiaries and not issued by such Person in connection with, or in
anticipation or contemplation of, such acquisition, merger or consolidation.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, such Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control. Bear, Xxxxxxx & Co. Inc., Chase Securities Inc., Xxxxxx
Xxxxxxx & Co. Incorporated and NationsBanc Xxxxxxxxxx Securities LLC or
NationsBank, N.A. and each of their respective Affiliates shall not be deemed
Affiliates of the Company by reason of their direct or indirect investments in
any fund managed by Xxxxx Muse or any Person in which any such fund is invested
or the Senior Credit Facility, as applicable.
"Affiliate Transaction" has the meaning provided in Section
4.03.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Asset Acquisition" means (i) an Investment by the Company or
any Restricted Subsidiary of the Company in any other Person pursuant to which
such Person shall become a Restricted Subsidiary of the Company or shall be
consolidated or merged with the Company or any Restricted Subsidiary of the
Company or (ii) the acquisition by the Company or any Restricted Subsidiary of
the Company of assets of any Person comprising a division or line of business of
such Person.
"Asset Sale" means any direct or indirect sale, issuance,
conveyance, transfer, lease (other than operating leases entered into in the
ordinary course of business), assignment or other transfer for value by the
Company or any of its Restricted Subsidiaries (excluding any sale and leaseback
transaction or any pledge of assets or stock by the Company or any of its
Restricted Subsidiaries) to any Person other than the Company or a Restricted
Subsidiary of the Company of (i) any Capital Stock of any Restricted Subsidiary
of the Company (other than directors' qualifying shares) or (ii) any other
property or assets of the Company or any Restricted Subsidiary of the Company
other than in the ordinary course of business; provided, however, that for
purposes of Section 4.08, Asset Sales shall not include (a) a transaction or
series of related transactions in which the Company or any of its Restricted
Subsidiaries receive aggregate consideration of less than
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$1,000,000, (b) transactions covered by Section 5.01, (c) a Restricted Payment
that otherwise qualifies under Section 4.09, (d) any disposition of obsolete or
worn out equipment or equipment that is no longer useful in the conduct of the
business of the Company and its Subsidiaries and that is disposed of, in each
case, in the ordinary course of business and (e) any transaction that
constitutes a Change of Control. Solely for purposes of Section 11.03, an Asset
Sale is deemed to include a sale, conveyance or transfer by the Representative
following a foreclosure on such assets.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code or any
similar federal, state or foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors or other
governing body charged with the ultimate management of any Person, or any duly
authorized committee thereof.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person or a duly authorized
committee of such Board of Directors.
"Business Day" means any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York) on which banks are
open for business in New York, New York.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated) of capital stock of such Person and (ii) with respect to
any Person that is not a corporation, any and all partnership or other equity
interests of such Person.
"Capitalized Lease Obligation" means, as to any Person, the
obligation of such Person to pay rent or other amounts under a lease to which
such Person is a party that is required to be classified and accounted for as a
capital lease obligation under GAAP, and for purposes of this definition, the
amount of such obligation at any date shall be the capitalized amount of such
obligation at such date, determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc.; (iii) commercial paper maturing no more than 270 days
from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 from Standard & Poor's Corporation or at least P-1 from
Xxxxx'x Investors Service, Inc.; (iv) certificates of deposit or bankers'
acceptances maturing within one year from the date of acquisition thereof issued
by any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia or any U.S. branch of a foreign
bank having at the date of acquisition thereof combined capital and surplus of
not less than $200,000,000; (v) repurchase obligations with a term of not more
than seven days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(iv) above; and (vi) investments in money market funds that invest substantially
all of their assets in securities of the types described in clauses (i) through
(v) above.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group") (whether or not otherwise in
compliance with the provisions of the Indenture), other than to Xxxxx Muse or
any of its Affiliates, officers or directors, and Xxxxxx X. Xxxxxx, Xx. or
Xxxxxxxxx X. Xxxxxx Xxxxxxx or any of his or her Affiliates (the "Permitted
Holders"); or (ii) a majority of the board of directors of the Company shall
consist of Persons who are not Continuing Directors; or (iii) the acquisition by
any Person or Group (other than the Permitted Holders or any direct or indirect
subsidiary of any Permitted Holder) of the power, directly or indirectly, to
vote or direct the voting of securities having more than 50% of the ordinary
voting power for the election of directors of the Company.
"Change of Control Offer" has the meaning provided in Section
4.14.
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"Change of Control Payment Date" has the meaning provided in
Section 4.14.
"Commodity Agreement" means any commodity futures contract,
commodity option or other similar agreement or arrangement.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Chief Executive Officer, its Vice Chairman of the Board, its President, a Vice
President or its Treasurer, and by its Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Consolidated Cash Flow" means, with respect to any Person,
for any period, the sum (without duplication) of (i) Consolidated Net Income,
(ii) to the extent Consolidated Net Income has been reduced thereby, (a) all
income taxes of such Person and its Restricted Subsidiaries accrued in
accordance with GAAP for such period (other than income taxes attributable to
extraordinary or nonrecurring gains or losses), (b) Consolidated Interest
Expense and (c) Consolidated Non-Cash Charges, all as determined on a
consolidated basis for such Person and its Restricted Subsidiaries in conformity
with GAAP and (iii) the lesser of (x) dividends or distributions paid in cash to
such Person or its Restricted Subsidiary by another Person whose results are
reflected as a minority interest in the consolidated financial statements of
such first Person and (y) such Person's equity interest in the Consolidated Cash
Flow of such other Person (but in no event less than zero).
"Consolidated Interest Expense" means, with respect to any
Person for any period, without duplication, the sum of (i) the interest expense
of such Person and its Restricted Subsidiaries for such period as determined on
a consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt issuance costs and original issue discount, (b) the net
cost under Interest Swap Agreements (including any amortization of discounts),
(c) the interest portion of any deferred payment obligation, (d) all
commissions, discounts and other fees and charges owed with respect to letters
of credit, bankers' acceptance financing or similar facilities, and (e) all
accrued interest and (ii) the interest component of Capitalized Lease
Obligations paid or accrued by such Person and its Subsidiaries during such
period as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" of any Person means, for any period,
the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, however, that there shall be excluded therefrom, without
duplication, (a) gains and losses from Asset Sales (without regard to the $1
million limitation set forth in the definition thereof) or abandonments or
reserves relating thereto and the related tax effects, (b) items classified as
extraordinary or nonrecurring gains and losses, and the related tax effects
according to GAAP, (c) the net income (or loss) of any Person acquired in a
pooling of interests transaction accrued prior to the date it becomes a
Restricted Subsidiary of such first referred to Person or is merged or
consolidated with it or any of its Restricted Subsidiaries, (d) the net income
of any Restricted Subsidiary to the extent that the declaration of dividends or
similar distributions by that Restricted Subsidiary of that income is restricted
by contract, operation of law or otherwise, (e) the net income or loss of any
Person, other than a Restricted Subsidiary, (f) the cumulative effect of a
change of accounting principles, and (g) any non-cash compensation expense in
connection with the issuance of employee or independent contractor stock
options.
"Consolidated Non-Cash Charges" means, with respect to any
Person for any period, the aggregate depreciation, amortization and other
non-cash expenses of such person and its Restricted Subsidiaries (excluding any
such charges constituting an extraordinary or nonrecurring item) reducing
Consolidated Net Income of such Person and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.
"Continuing Director" means, as of the date of determination,
any Person who (i) was a member of the board of directors of the Company on the
Issue Date, (ii) was nominated for election or elected to the board of directors
of the Company, as the case may be, with the affirmative vote of a majority of
the Continuing Directors who were members of such board of directors at the time
of such nomination or election or (iii) is a representative of a Permitted
Holder.
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"Corporate Trust Office of the Trustee" means the principal
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust Department.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means an event or condition the occurrence of which
is, or with the lapse of time or the giving of notice or both would be, an Event
of Default.
"Depository" means, with respect to the Securities issued in
the form of one or more Global Securities, The Depository Trust Company or
another Person designated as Depository by the Company, which must be a clearing
agency registered under the Exchange Act.
"Designated Senior Indebtedness" means (i) all obligations
under the Senior Credit Facility and (ii) any other Senior Indebtedness of the
Company which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $50,000,000 and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture,
written notice of which the Trustee has received in the form of an Officers'
Certificate.
"Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, or transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Capital Stock" means any Capital Stock that, by
its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures
(excluding any maturity as the result of an optional redemption by the issuer
thereof) or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the sole option of the holder thereof (except, in
each case, upon the occurrence of a Change of Control), in whole or in part, on
or prior to the final maturity date of the Securities; provided that only the
portion of Capital Stock which so matures or is mandatorily redeemable or is so
redeemable at the sole option of the holder thereof prior to such date shall be
deemed Disqualified Capital Stock.
"Equity Offering" means a private sale or public offering of
Capital Stock (other than Disqualified Capital Stock) of the Company or a
Holding Company (to the extent, in the case of a Holding Company, that the net
cash proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Company).
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 10 1/8% Series B Senior
Subordinated Notes due 2008 to be issued in exchange for the Initial Securities
pursuant to the Registration Rights Agreement.
"Final Maturity Date" means June 1, 2008.
"Financial Advisory Agreement" means the Financial Advisory
Agreement by and among the Company and Xxxxx Muse Partners, as in effect on the
Issue Date.
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"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the Consolidated Interest Expense
for such period, (ii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, (iii) the
amount of all cash dividend payments or payments in Disqualified Capital Stock
on Preferred Stock of Restricted Subsidiaries of such Person or on Disqualified
Capital Stock of such Person held by Persons other than the Company or any
Restricted Subsidiaries paid, accrued or scheduled to be paid or accrued during
such period.
"Fixed Charge Coverage Ratio" means with respect to any Person
for the four full fiscal quarters (the "Four Quarter Period") ending on or prior
to the date of determination, the ratio of the Consolidated Cash Flow of such
Person for such period to the Fixed Charges of such Person and its Restricted
Subsidiaries for such period.
For purposes of this definition, "Consolidated Cash Flow" and,
except with respect to clause (iv) below, "Fixed Charges" shall be calculated on
a pro forma basis after giving effect to (i) the Recapitalization, (ii) the
incurrence of the Indebtedness, and the issuance of Disqualified Capital Stock
and Preferred Stock, of such Person and its Restricted Subsidiaries (and the
application of the proceeds therefrom) giving rise to the need to make such
calculation and any incurrence (and the application of the proceeds therefrom)
or repayment of other Indebtedness, other than the incurrence or repayment of
Indebtedness pursuant to working capital facilities, and the issuance of other
Disqualified Capital Stock or Preferred Stock, at any time subsequent to the
beginning of the Four Quarter Period and on or prior to the date of
determination, as if such incurrence and issuance (and the application of the
proceeds thereof), or the repayment, as the case may be, occurred on the first
day of the Four Quarter Period, (iii) any Asset Sales (including those excluded
from the definition thereof by clauses (b) and (c) of the definition thereof) or
Asset Acquisitions (including, without limitation, any Asset Acquisition giving
rise to the need to make such calculation as a result of such Person or one of
its Subsidiaries (including any Person that becomes a Restricted Subsidiary as a
result of such Asset Acquisition) incurring, assuming or otherwise becoming
liable for Indebtedness or issuing Disqualified Capital Stock or Preferred
Stock) at any time on or subsequent to the first day of the Four Quarter Period
and on or prior to the date of determination, as if such Asset Sale or Asset
Acquisition (including the incurrence, assumption or liability for any such
Indebtedness or issuance of such Disqualified Capital Stock or Preferred Stock
and also including any Consolidated Cash Flow associated with such Asset
Acquisition) occurred on the first day of the Four Quarter Period and (iv) cost
savings resulting from employee termination, facilities consolidations and
closings, standardization of employee benefits and compensation practices,
consolidation of property, casualty and other insurance coverage and policies,
standardization of sales representation commissions and other contract rates,
and reductions in taxes other than income taxes (collectively, "Cost Savings
Measures"), which cost savings the Company reasonably believes in good faith
could have been achieved during the Four Quarter Period as a result of such
Asset Acquisition (regardless of whether such cost savings could then be
reflected in pro forma financial statements under GAAP, Regulation S-X
promulgated by the Commission or any other regulation or policy of the
Commission), less the amount of any additional expenses that the Company
reasonably estimates would result from anticipated replacement of any items
constituting Cost Savings Measures in connection with such Asset Acquisitions;
provided, however, that both (A) such cost savings and Cost Savings Measures
were identified and such cost savings were quantified in an officer's
certificate delivered to the Trustee at the time of the consummation of the
Asset Acquisition and (B) with respect to each Asset Acquisition completed prior
to the 90th day preceding such date of determination, actions were commenced or
initiated by the Company within 90 days of such Asset Acquisition to effect the
Cost Savings Measures identified in such officer's certificate (regardless,
however, of whether the corresponding cost savings have been achieved).
Furthermore, in calculating "Consolidated Interest Expense" for purposes of the
calculation of "Fixed Charge Coverage Ratio," (i) interest on Indebtedness
determined on a fluctuating basis as of the date of determination (including
Indebtedness actually incurred on the date of the transaction giving rise to the
need to calculate the Fixed Charge Coverage Ratio) and which will continue to be
so determined thereafter shall be deemed to have accrued at a fixed rate per
annum equal to the rate of interest on such Indebtedness as in effect on the
date of determination and (ii) notwithstanding (i) above, interest determined on
a fluctuating basis, to the extent such interest is covered by Interest Swap
Agreements, shall be deemed to accrue at the rate per annum resulting after
giving effect to the operation of such agreements.
"Funding Guarantor" has the meaning provided in Section 11.05.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of the Indenture, including
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting
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Standards Board or the Commission or in such other statements by such other
entity as approved by a significant segment of the accounting profession. All
ratios and computations based on GAAP contained in the Indenture shall be
computed in conformity with GAAP.
"Global Securities"means one or more 144A Global Securities,
Regulation S Global Securities or IAI Global Securities.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof), of all or any part of any Indebtedness.
"Guarantor" means each of the Company's direct and indirect,
existing and future, Restricted Subsidiaries, other than a Subsidiary organized
under the laws of a jurisdiction other than the United States or any State
thereof, provided that such Subsidiary's assets and principal place of business
are located outside the United States.
"Guarantor Senior Indebtedness" means, as to any Guarantor,
Senior Indebtedness of such Guarantor, it being understood that for the purpose
of this definition, all references to the Company in the definition of Senior
Indebtedness shall be deemed references to such Guarantor.
"Xxxxx Muse" means Hicks, Muse, Xxxx & Xxxxx Incorporated, a
Delaware corporation.
"Xxxxx Muse Partners" means Xxxxx, Muse & Co. Partners, L.P.,
an affiliate of Xxxxx Muse.
"Holders" means the registered holders of the Securities.
"IAI Global Security" means a permanent global security in
registered form representing the aggregate principal amount of Securities
transferred after the Issue Date to Institutional Accredited Investors.
"incur" has the meaning set forth in Section 4.04.
"Indebtedness" means with respect to any Person, without
duplication, any liability of such Person (i) for borrowed money, (ii) evidenced
by bonds, debentures, notes or other similar instruments, (iii) constituting
Capitalized Lease Obligations, (iv) incurred or assumed as the deferred purchase
price of property, or pursuant to conditional sale obligations and title
retention agreements (but excluding trade accounts payable arising in the
ordinary course of business), (v) for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (vi) for
Indebtedness of others guaranteed by such Person, (vii) for Interest Swap
Agreements, Commodity Agreements and Currency Agreements, (viii) for
Indebtedness incurred in connection with, or in contemplation of, another Person
merging with or into or becoming a Subsidiary of the former Person and (ix) for
Indebtedness of any other Person of the type referred to in clauses (i) through
(viii) which is secured by any Lien on any property or asset of such first
referred to Person, the amount of such Indebtedness being deemed to be the
lesser of the value of such property or asset or the amount of the Indebtedness
so secured. The amount of Indebtedness of any Person at any date shall be (i)
the outstanding principal amount of all unconditional obligations described
above, as such amount would be reflected on a balance sheet prepared in
accordance with GAAP, and the maximum liability at such date of such Person for
any contingent obligations described above, (ii) the accreted value thereof, in
the case of any Indebtedness issued with original issue discount and (iii) the
principal amount thereof, together with any interest thereon that is more than
30 days past due, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Initial Purchasers" means Bear, Xxxxxxx & Co. Inc., Chase
Securities Inc., Xxxxxx Xxxxxxx & Co. Incorporated, NationsBanc Xxxxxxxxxx
Securities LLC.
"Initial Securities" means the 101/8% Series A Senior
Subordinated Notes due 2008 of the Company.
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13
"Institutional Accredited Investor" means an institution that
is an "accredited investor" as that term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"interest" means, with respect to the Securities, the sum of
any cash interest and any Liquidated Damages (as defined in the Registration
Rights Agreement) on the Securities.
"Interest Payment Date" means June 1 and December 1 of each
year, commencing on December 1, 1998.
"Interest Record Date" for the interest payable on any
Interest Payment Date (except a date for payment of defaulted interest) means
May 15 or November 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Interest Swap Agreements" means any interest rate protection
agreement, interest rate future, interest rate option, interest rate swap,
interest rate cap or other interest rate hedge or arrangement.
"Investment" in any Person means any direct or indirect
advance, loan or other extension of credit (in each case, including by way of
Guarantee or similar arrangement, but excluding (i) any debt or extension of
credit represented by a bank deposit other than a time deposit and (ii) advances
to customers and independent contractors in the ordinary course of business) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. For purposes of Section 4.09, (A)
"Investment" shall include the portion (proportionate to the Company's equity
interest in a Restricted Subsidiary to be designated as an Unrestricted
Subsidiary) of the fair market value of the net assets of such Restricted
Subsidiary of the Company at the time that such Restricted Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" (if
positive) equal to (1) the Company's "Investment" in such Unrestricted
Subsidiary at the time of such redesignation less (2) the portion (proportionate
to the Company's equity interest in such Unrestricted Subsidiary) of the fair
market value of the net assets of such Unrestricted Subsidiary at the time that
such Unrestricted Subsidiary is so redesignated from an Unrestricted Subsidiary
to a Restricted Subsidiary; and (B) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer, in each case as determined in good faith by the board of
directors of the Company.
"Issue Date" means the date of original issuance of the
Securities.
"Lien" means, with respect to any asset, any lien, mortgage,
deed of trust, pledge, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement, any lease in
the nature thereof and any agreement to give any security interest).
"Monitoring and Oversight Agreement" means the Monitoring and
Oversight Agreement by and among the Company and Xxxxx Muse Partners, as in
effect on the Issue Date.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents (including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents) received by the Company or any of its Subsidiaries from such Asset
Sale net of (i) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions, recording fees, relocation costs, title
insurance premiums, appraisers fees and costs reasonably incurred in preparation
of any asset or property for sale), (ii) taxes paid or reasonably estimated to
be payable (calculated based on the combined state, federal and foreign
statutory tax rates applicable to the Company or the Restricted Subsidiary
engaged in such Asset Sale), (iii) all distributions and other payments required
to be made to any Person owning a beneficial interest in the assets subject to
sale or minority interest holders in Subsidiaries or joint ventures as a result
of such Asset Sale, (iv) any reserves established in accordance with GAAP for
adjustment in respect of the sales price of the asset or assets subject to such
Asset Sale or for any liabilities associated with such Asset Sale and (v)
repayment of Indebtedness secured by assets subject to such Asset Sale;
provided, however, that if the instrument or agreement governing such Asset Sale
requires the transferor to maintain a portion of the purchase price in escrow
(whether as a reserve for adjustment of the
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purchase price or otherwise) or to indemnify the transferee for specified
liabilities in a maximum specified amount, the portion of the cash or Cash
Equivalents that is actually placed in escrow or segregated and set aside by the
transferor for such indemnification obligation shall not be deemed to be Net
Cash Proceeds until the escrow terminates or the transferor ceases to segregate
and set aside such funds, in whole or in part, and then only to the extent of
the proceeds released from escrow to the transferor or that are no longer
segregated and set aside by the transferor.
"Obligations" means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing, or otherwise relating to,
any Indebtedness.
"Offering" means the initial offering of the Securities.
"Offering Memorandum" means the final offering memorandum
dated May 28, 1998 setting forth information concerning the Company and the
Securities.
"Officer" means the Chairman, the Chief Executive Officer, any
Vice Chairman, the President, any Vice President, the Chief Financial Officer,
the Treasurer or the Secretary of the Company or any other officer designated by
the Board of Directors serving in a similar capacity.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Participants" has the meaning provided in Section 2.15.
"Paying Agent" has the meaning provided in Section 2.03.
"Permitted Holders" has the meaning provided in the definition
of "Change of Control."
"Permitted Indebtedness" means, without duplication, (i)
Indebtedness outstanding on the Issue Date; (ii) Indebtedness of the Company and
any of its Restricted Subsidiaries (a) outstanding under the Senior Credit
Facility (including letter of credit obligations) (provided that the aggregate
principal amount at any time outstanding does not exceed $340.0 million) or (b)
incurred under the Senior Credit Facility pursuant to and in compliance with (x)
clause (v) of this definition or (y) the proviso in Section 4.04, (iii)
Indebtedness evidenced by or arising under the Securities and the Indenture;
(iv) Interest Swap Agreements, Commodity Agreements and Currency Agreements;
provided, however, that such agreements are entered into for bona fide hedging
purposes and not for speculative purposes; (v) additional Indebtedness of the
Company or any of its Restricted Subsidiaries not to exceed $50 million in
principal amount outstanding at any time (which amount may, but need not, be
incurred under the Senior Credit Facility); (vi) Refinancing Indebtedness; (vii)
Indebtedness owed by the Company to any Restricted Subsidiary of the Company or
by any Restricted Subsidiary of the Company to the Company or any Restricted
Subsidiary of the Company; (viii) guarantees by the Company or Restricted
Subsidiaries of any Indebtedness permitted to be incurred pursuant to the
Indenture; (ix) Indebtedness in respect of letters of credit to support workers
compensation obligations, performance bonds, bankers' acceptances and surety or
appeal bonds provided by the Company or any of its Restricted Subsidiaries to
their customers in the ordinary course of their business; (x) Indebtedness
arising from agreements providing for indemnification, adjustment of purchase
price or similar obligations, or from guarantees or letters of credit, surety
bonds or performance bonds securing any obligations of the Company or any of its
Restricted Subsidiaries pursuant to such agreements, in each case incurred in
connection with the disposition of any business assets or Restricted
Subsidiaries of the Company (other than guarantees of Indebtedness or other
obligations incurred by any Person acquiring all or any portion of such business
assets or Restricted Subsidiaries of the Company for the purpose of financing
such acquisition) in a principal amount not to exceed the gross proceeds
actually received by the Company or any of its Restricted Subsidiaries in
connection with such disposition; and (xi) Indebtedness represented by
Capitalized Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing all or any part
of the purchase price or cost of construction or improvement of property or
assets used in the direct selling, direct
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15
marketing or home furnishings business or incurred to refinance any such
purchase price or cost of construction or improvement, in each case incurred no
later than 365 days after the date of such acquisition or the date of completion
of such construction or improvement; provided, however, that the principal
amount of any Indebtedness incurred pursuant to this clause (xi) shall not
exceed $30 million at any time outstanding.
"Permitted Investments" means (i) Investments by the Company
or any Restricted Subsidiary of the Company to acquire the stock or assets of
any Person (or Acquired Indebtedness or Acquired Preferred Stock acquired in
connection with a transaction in which such Person becomes a Restricted
Subsidiary of the Company) engaged in the direct selling, direct marketing or
home furnishings business or businesses reasonably related thereto; provided,
however, that if any such Investment or series of related Investments involves
an Investment by the Company in excess of $5.0 million, the Company is able, at
the time of such Investment and immediately after giving effect thereto, to
incur at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.04, (ii) Investments received by the
Company or its Restricted Subsidiaries as consideration for a sale of assets
made in compliance with the other terms of the Indenture, (iii) Investments by
the Company or any Restricted Subsidiary of the Company in any Restricted
Subsidiary of the Company (whether existing on the Issue Date or created
thereafter) or any Person that after such Investments, and as a result thereof,
becomes a Restricted Subsidiary of the Company and Investments in the Company or
any Restricted Subsidiary by any Restricted Subsidiary of the Company, (iv)
Investments in cash and Cash Equivalents, (v) Investments in securities of trade
creditors, wholesalers, suppliers or customers received pursuant to any plan of
reorganization or similar arrangement, (vi) loans or advances to employees or
independent contractors of the Company or any Restricted Subsidiary thereof for
purposes of purchasing the Company's or a Holding Company's Capital Stock and
other loans and advances to employees or independent contractors made in the
ordinary course of business consistent with past practices of the Company or
such Restricted Subsidiary, and (vii) additional Investments in an aggregate
amount not to exceed $50.0 million at any time outstanding.
"Person" means an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or joint venture,
or a governmental agency or political subdivision thereof.
"Physical Securities" means one or more certificated
Securities in registered form.
"Preferred Stock" of any Person means any Capital Stock of
such Person that has preferential rights to any other Capital Stock of such
Person with respect to dividends or redemptions or upon liquidation.
"Private Placement Legend" means the legend initially set
forth on the Initial Securities in the form set forth on Exhibit A hereto.
"Productive Assets" means assets of a kind used or usable by
the Company and its Restricted Subsidiaries in the direct selling, direct
marketing or home furnishings business or businesses reasonably related,
ancillary or complementary thereto, and specifically includes assets acquired
through Asset Acquisitions (it being understood that "assets" may include
Capital Stock of a Person that owns such Productive Assets, provided that after
giving effect to such transaction, such Person would be a Restricted Subsidiary
of the Company).
"Public Equity Offering" means an underwritten public offering
of Capital Stock (other than Disqualified Capital Stock) of the Company or a
Holding Company (to the extent, in the case of a Holding Company, that the net
cash proceeds thereof are contributed to the common or non-redeemable preferred
equity capital of the Company), pursuant to an effective registration statement
filed with the Commission in accordance with the Securities Act.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Qualified Institutional Buyer" or "QIB" means a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
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16
"redemption price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed hereto as Exhibit A.
"Refinancing Indebtedness" means any refinancing by the
Company of Indebtedness of the Company or any of its Restricted Subsidiaries
incurred in accordance with Section 4.04 (other than pursuant to clause (iii) or
(iv) of the definition of Permitted Indebtedness) that does not (i) result in an
increase in the aggregate principal amount of Indebtedness (such principal
amount to include, for purposes of this definition, any premiums, penalties or
accrued interest paid with the proceeds of the Refinancing Indebtedness) of such
Person, or (ii) create Indebtedness with (A) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the Indebtedness
being refinanced or (B) a final maturity earlier than the final maturity of the
Indebtedness being refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Issue Date by and among the Company, the Guarantors
and the Initial Purchasers.
"Registration" means a registered exchange offer for the
Securities by the Company or other registration of the Securities under the
Securities Act pursuant to and in accordance with the terms of the Registration
Rights Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" means a permanent global
security in registered form representing the aggregate principal amount of
Securities sold in reliance on Regulation S under the Securities Act.
"Representative" means the indenture trustee or other trustee,
agent or representative in respect of any Senior Indebtedness; provided,
however, that if, and for so long as, any issue of Senior Indebtedness lacks
such a representative, then the Representative for such issue of Senior
Indebtedness shall at all times constitute the holders of a majority in
outstanding principal amount of such issue of Senior Indebtedness.
"Restricted Payment" means (i) the declaration or payment of
any dividend or the making of any other distribution (other than dividends or
distributions payable in Qualified Capital Stock or in options, rights or
warrants to acquire Qualified Capital Stock) on shares of the Company's Capital
Stock, (ii) the purchase, redemption, retirement or other acquisition for value
of any Capital Stock of the Company, or any warrants, rights or options to
acquire shares of Capital Stock of the Company, other than through the exchange
of such Capital Stock or any warrants, rights or options to acquire shares of
any class of such Capital Stock for Qualified Capital Stock or warrants, rights
or options to acquire Qualified Capital Stock or (iii) the making of any
Investment (other than a Permitted Investment).
"Restricted Security" means a Security that is a "restricted
security" within the meaning set forth in Rule 144(a)(3) under the Securities
Act; provided, however, that the Trustee shall be entitled to request and
conclusively rely upon an Opinion of Counsel with respect to whether any
Security is a Restricted Security.
"Restricted Subsidiary" means a Subsidiary of the Company
other than an Unrestricted Subsidiary and includes all of the Subsidiaries of
the Company existing as of the Issue Date. The board of directors of the Company
may designate any Unrestricted Subsidiary or any person that is to become a
Subsidiary as a Restricted Subsidiary if immediately after giving effect to such
action (and treating any Acquired Indebtedness as having been incurred at the
time of such action), the Company could have incurred at least $1.00 of
additional indebtedness (other than Permitted Indebtedness) pursuant to Section
4.04.
"Rule 144A" means Rule 144A under the Securities Act.
"Secured Indebtedness" means any Indebtedness of the Company
or a Restricted Subsidiary secured by a Lien.
"SEC" or "Commission" means the Securities and Exchange
Commission.
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"Securities" means, collectively, the Initial Securities and
the Unrestricted Securities treated as a single class of securities, as amended
or supplemented from time to time in accordance with the terms of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated by the SEC thereunder.
"Senior Credit Facility" means the Senior Credit Facility,
under that certain Credit Agreement dated as of June 4, 1998, among the Company,
NationsBank, N.A., as administrative agent, The Chase Manhattan Bank, as
syndication agent, National Westminster Bank, PLC, as documentation agent,
Prudential Insurance Company of America, as a co-agent, Societe Generale, as a
co-agent, Citicorp USA, Inc., as a co-agent, and the other financial
institutions from time to time party thereto, together with the related
documents thereto (including, without limitation, any guarantee agreements and
security documents), in each case as such agreements may be amended (including
any amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including by way of adding Subsidiaries of
the Company as additional borrowers or guarantors thereunder) all or any portion
of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of lenders
(or other institutions).
"Senior Indebtedness" means, whether outstanding on the Issue
Date or thereafter issued, all Indebtedness of the Company, including interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary whether or not a claim for post-filing interest is allowed in such
proceeding) and premium, if any, thereon, and other monetary amounts (including
fees, expenses, reimbursement obligations under letters of credit and
indemnities) owing in respect thereof unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that the obligations in respect of such Indebtedness ranks pari passu with the
Securities; provided, however, that Senior Indebtedness will not include (1) any
obligation of the Company to any Restricted Subsidiary, (2) any liability for
federal, state, foreign, local or other taxes owed or owing by the Company, (3)
any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness, Guarantee or obligation of
the Company that is expressly subordinate or junior in right of payment to any
other Indebtedness, Guarantee or obligation of the Company, including any Senior
Subordinated Indebtedness or (5) obligations in respect of any Capital Stock.
"Senior Subordinated Indebtedness" means the Securities and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Securities in right of payment and
is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of the Company which is not Senior Indebtedness.
"Significant Restricted Subsidiary" means, at any date of
determination, any Restricted Subsidiary that would be a "significant
subsidiary" as defined in Article I, Rule 1-03 of Regulation S-X under the Act,
as such rule is in effect on the Issue Date.
"Stated Maturity" means with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary," with respect to any Person, means (i) any
corporation of which the outstanding Capital Stock having at least a majority of
the votes entitled to be cast in the election of directors under ordinary
circumstances shall at the time be owned, directly or indirectly through one or
more intermediaries, by such Person or (ii) any other Person of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, through one or more intermediaries, owned by such
Person. Notwithstanding anything in the Indenture to the contrary, all
references to the Company and its consolidated Subsidiaries or to financial
information prepared on a consolidated basis in accordance with GAAP shall be
deemed to include the Company and its Subsidiaries as to which financial
statements are prepared on a combined basis in accordance with GAAP and to
financial information prepared on such a combined basis.
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Notwithstanding anything in the Indenture to the contrary, an Unrestricted
Subsidiary shall not be deemed to be a Restricted Subsidiary for purposes of the
Indenture.
"Subsidiary Guarantees" means the Form of Subsidiary Guarantee
of each Guarantor to be endorsed on each of the Securities in the form of
Exhibit A (in the case of an Initial Security) or Exhibit B (in the case of an
Exchange Security) hereto.
"Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
xx.xx. 77aaa-77bbbb), as amended, as in effect on the date of this Indenture
(except as provided in Section 10.03) until such time as this Indenture is
qualified under the TIA, and thereafter as in effect on the date on which this
Indenture is qualified under the TIA.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Trustee" means the party named as such in the first paragraph
of this Indenture until a successor replaces it in accordance with the
provisions of this Indenture and thereafter means such successor.
"Unrestricted Securities" means one or more Securities that do
not and are not required to bear the Private Placement Legend in the form set
forth in Exhibit A hereto, including, without limitation, the Exchange
Securities and any Securities registered under the Securities Act pursuant to
and in accordance with the Registration Rights Agreement.
"Unrestricted Subsidiary" means a Subsidiary of the Company
created after the Issue Date and so designated by a resolution adopted by the
board of directors of the Company; provided, however, that (a) neither the
Company nor any of its other Restricted Subsidiaries (1) provides any credit
support for any Indebtedness or other Obligations of such Subsidiary (including
any undertaking, agreement or instrument evidencing such Indebtedness) or (2) is
directly or indirectly liable for any Indebtedness or other Obligations of such
Subsidiary and (b) at the time of designation of such Subsidiary, such
Subsidiary has no property or assets (other than de minimis assets resulting
from the initial capitalization of such Subsidiary). The board of directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to such designation (x) the
Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) in compliance with Section 4.04 and (y) no Default or Event of
Default shall have occurred or be continuing. Any designation pursuant to this
definition by the board of directors of the Company shall be evidenced to the
Trustee by the filing with the Trustee of a certified copy of the resolution of
the Company's board of directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
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Section 1.02 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" means the Company or any other obligor on the
Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule and
not otherwise defined herein have the meanings assigned to them therein.
Section 1.03 Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles in
effect from time to time, and any other reference in this Indenture to
"generally accepted accounting principles" refers to GAAP;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words in
the plural include the singular;
(e) provisions apply to successive events and
transactions; and
(f) "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.
ARTICLE 2
THE SECURITIES
Section 2.01 Form and Dating. The Initial Securities and the Trustee's
certificate of authentication thereof shall be substantially in the form of
Exhibit A hereto, which is hereby incorporated in and expressly made a part of
this Indenture. The Exchange Securities and the Trustee's certificate of
authentication thereof shall be substantially in the form of Exhibit B hereto,
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements (including the Subsidiary
Guarantee) required by law, stock exchange rule or usage or agreements to which
the Company is subject. The Company and the Trustee shall approve the form of
the Securities and any notation, legend or endorsement (including the Subsidiary
Guarantee) on them. Each Security shall be dated the date of its issuance and
shall show the date of its authentication.
Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more Global Securities, substantially in
the form set forth in Exhibit A hereto, deposited with the Trustee, as custodian
for the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided and shall bear the legend
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set forth in Exhibit C hereto. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Section 2.02 Execution and Authentication. Two Officers or an Officer
and an Assistant Secretary shall sign, or one Officer shall sign and one Officer
and an Officer and an Assistant Secretary (each of whom shall, in each case,
have been duly authorized by all requisite corporate actions) shall attest to,
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security or a Subsidiary
Guarantee, as the case may be, was an Officer at the time of such execution but
no longer holds that office at the time the Trustee authenticates the Security
or Subsidiary Guarantee, as the case may be, the Security or Subsidiary
Guarantee, as the case may be, shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate (a) Initial Securities for
original issue in an aggregate principal amount not to exceed $200,000,000, and
(b) Unrestricted Securities from time to time only in exchange for a like
principal amount of Initial Securities upon a written order of the Company in
the form of an Officers' Certificate. Each such written order shall specify the
amount of Securities to be authenticated and the date on which the Securities
are to be authenticated, whether the Securities are to be Initial Securities or
Unrestricted Securities and whether the Securities are to be issued as Physical
Securities or Global Securities and such other information as the Trustee may
reasonably request. The aggregate principal amount of Securities outstanding at
any time may not exceed $200,000,000, except as provided in Sections 2.07 and
2.08.
Notwithstanding the foregoing, all Securities issued under
this Indenture shall vote and consent together on all matters (as to which any
of such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless otherwise provided
in the appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof.
Section 2.03 Registrar and Paying Agent. The Company shall maintain an
office or agency, which may be in the Borough of Manhattan, The City of New
York, where (a) Securities may be presented or surrendered for registration of
transfer or for exchange (the "Registrar"), (b) Securities may be presented or
surrendered for payment (the "Paying Agent") and (c) notices and demands in
respect of the Securities and this Indenture may be served. The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company, upon notice to the Trustee, may appoint one or more co-Registrars and
one or more additional Paying Agents. The term "Paying Agent" includes any
additional Paying Agent. Except as provided herein, the Company may act as
Paying Agent, Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such Agent. The Company shall notify the Trustee of the
name and address of any such Agent. If the Company fails to maintain a Registrar
or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such and shall be entitled to appropriate compensation in accordance with
Section 8.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent until such time as the Trustee has resigned or a successor has been
appointed.
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The Trustee is authorized to enter into a letter of
representation with the Depository in the form provided to the Trustee by the
Company and to act in accordance with such letter.
Section 2.04 Paying Agent To Hold Assets in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that each
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
assets held by the Paying Agent for the payment of principal of, or interest on,
the Securities, and shall notify the Trustee of any Default by the Company in
making any such payment. The Company at any time may require a Paying Agent to
distribute all assets held by it to the Trustee and account for any assets
disbursed and the Trustee may at any time during the continuance of any payment
Default, upon written request to a Paying Agent, require such Paying Agent to
distribute all assets held by it to the Trustee and to account for any assets
distributed. Upon distribution to the Trustee of all assets that shall have been
delivered by the Company to the Paying Agent (if other than the Company), the
Paying Agent shall have no further liability for such assets. If the Company or
any of their Affiliates acts as Paying Agent, it shall, on or before each due
date of the principal of or interest on the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Section 2.05 Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee before each Interest Record Date and at such other
times as the Trustee may request in writing a list as of such date and in such
form as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.
Section 2.06 Transfer and Exchange. Subject to the provisions of
Sections 2.15 and 2.16, when Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer of such Securities or to
exchange such Securities for an equal principal amount of Securities of other
authorized denominations of the same series, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested if its requirements for
such transaction are met; provided, however, that the Securities surrendered for
transfer or exchange shall be duly endorsed or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Registrar or
co-Registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing. To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's or co-Registrar's written request. No service charge shall be made
for any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other governmental charge payable upon exchanges or transfers pursuant to
Section 2.02, 2.10, 3.06, or 10.05). The Registrar or co-Registrar shall not be
required to register the transfer or exchange of any Security (a) during a
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Securities and ending at the close of business on the
day of such mailing and (b) selected for redemption in whole or in part pursuant
to Article 3 hereof, except the unredeemed portion of any Security being
redeemed in part.
Prior to the registration of any transfer by a Holder as
provided herein, the Company, the Trustee and any Agent of the Company shall
treat the person in whose name the Security is registered as the owner thereof
for all purposes whether or not the Security shall be overdue, and none of the
Company, the Trustee nor any such Agent shall be affected by notice to the
contrary. Any consent, waiver or actions of a Holder shall be binding upon any
subsequent Holders of such Security or a Security received upon transfer. Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest in a Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depository (or its agent), and that
ownership of a beneficial interest in a Global Security shall be required to be
reflected in a book entry.
Section 2.07 Replacement Securities. If a mutilated Security is
surrendered to the Trustee or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the Trustee's
requirements for replacement of Securities are met. If required by the Company
or the Trustee, such Holder must provide an indemnity bond or other indemnity,
sufficient in the judgment of the Company and the Trustee, to protect the
Company, the Trustee and any Agent from any loss which any of them may suffer if
a Security is replaced. The Company may charge such Holder for their reasonable
out-of-pocket expenses in replacing a Security, including reasonable fees and
expenses of counsel.
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Every replacement Security is an additional obligation of the
Company.
Section 2.08 Outstanding Securities. Securities outstanding at any time
are all the Securities that have been authenticated by the Trustee except those
canceled by it, those delivered to it for cancellation and those described in
this Section 2.08 as not outstanding. Subject to Section 2.09, a Security does
not cease to be outstanding because the Company or any Affiliates of the Company
holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than
a mutilated Security surrendered for replacement), it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser or protected purchaser. A mutilated Security
ceases to be outstanding upon surrender of such Security and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date or the Final Maturity Date the Paying
Agent holds money sufficient to pay all of the principal and interest due on the
Securities payable on that date, and is not prohibited from paying such money to
the Holders pursuant to the terms of this Indenture, then on and after that date
such Securities cease to be outstanding and interest on them ceases to accrue.
Section 2.09 Treasury Securities. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company, the Guarantors or any of
their respective Affiliates shall be disregarded, except that, for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities that a Trust Officer of the
Trustee actually knows are so owned shall be disregarded.
The Company shall notify the Trustee, in writing, when the
Company or any of its respective Affiliates repurchases or otherwise acquires
Securities, of the aggregate principal amount of such Securities so repurchased
or otherwise acquired.
Section 2.10 Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities upon receipt of a written order of the Company in the form
of an Officers' Certificate. The Officers' Certificate shall specify the amount
of temporary Securities to be authenticated and the date on which the temporary
Securities are to be authenticated.
Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate upon receipt of a written order
of the Company pursuant to Section 2.02 definitive Securities in exchange for
temporary Securities.
Section 2.11 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for transfer,
exchange or payment. The Trustee, or at the direction of the Trustee, the
Registrar or the Paying Agent, and no one else, shall cancel, and at the written
direction of the Company, dispose of and deliver evidence of such disposal of
all Securities surrendered for transfer, exchange, payment or cancellation.
Subject to Section 2.07, the Company may not issue new Securities to replace
Securities that they have paid or delivered to the Trustee for cancellation. If
the Company shall acquire any of the Securities, such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Securities unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.
Section 2.12 Defaulted Interest. The Company shall pay interest on
overdue principal from time to time on demand at the rate of interest then borne
by the Securities. The Company shall, to the extent lawful, pay interest on
overdue installments of interest (without regard to any applicable grace
periods) from time to time on demand at the rate of interest then borne by the
Securities.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest to the Persons who are Holders on a
subsequent special record date, which date shall be the fifteenth day preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent
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special record date, the Company shall mail to each Holder, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid
prior to the expiration of the 30-day period set forth in Section 6.01(a) shall
be paid to Holders as of the Interest Record Date for the Interest Payment Date
for which interest has not been paid.
Section 2.13 CUSIP Number. The Company in issuing the Securities will
use a "CUSIP" number and the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided, however, that any
such notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Securities, and
that reliance may be placed only on the other identification numbers printed on
the Securities. The Company shall promptly notify the Trustee of any changes in
CUSIP numbers.
Section 2.14 Deposit of Moneys. Prior to 11:00 a.m. New York City time
on each Interest Payment Date, Redemption Date, and the Final Maturity Date, the
Company shall deposit with the Paying Agent in immediately available funds money
sufficient to make cash payments, if any, due on such Interest Payment Date,
Redemption Date or Final Maturity Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Redemption Date or Final Maturity Date, as the case may be.
Section 2.15 Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in
the name of the Depository or the nominee of such Depository, (ii) be delivered
to the Trustee as custodian for such Depository and (iii) bear legends as set
forth in Exhibit C.
Members of, or participants in, the Depository
("Participants") shall have no rights under this Indenture with respect to any
Global Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of the Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and Participants, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees. Interests of beneficial owners in the Global Securities may
be transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice or (ii) an Event of Default has
occurred and is continuing and the Registrar has received a request from the
Depository to issue Physical Securities.
(c) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver or mail, to each
beneficial owner identified by the Depository in exchange for its beneficial
interest in the Global Securities, an equal aggregate principal amount of
Physical Securities of authorized denominations.
(d) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 2.15 shall, except as otherwise provided by paragraph (f) of
Section 2.16, bear the Private Placement Legend.
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(e) The Holder of any Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
Section 2.16 Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When
Physical Securities are presented to the Registrar or co-Registrar with a
request:
(i) to register the transfer of the Physical
Securities; or
(ii) to exchange such Physical Securities for an
equal principal amount of Physical Securities of other authorized
denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for registration of transfer or exchange:
(A) shall be duly endorsed or accompanied by
a written instrument of transfer in form satisfactory to the
Registrar or co-Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing; and
(B) in the case of Physical Securities the
offer and sale of which have not been registered under the
Securities Act, such Physical Securities shall be accompanied,
in the sole discretion of the Company, by the following
additional information and documents, as applicable:
(1) if such Physical Security is
being delivered to the Registrar or co-Registrar by a
Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to
that effect (substantially in the form of Exhibit D
hereto); or
(2) if such Physical Security is
being transferred to a QIB in accordance with Rule
144A, a certification to that effect (substantially
in the form of Exhibit D hereto); or
(3) if such Physical Security is
being transferred to an Institutional Accredited
Investor, delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a
transferee letter of representation (substantially in
the form of Exhibit E hereto) and, at the option of
the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act; or
(4) if such Physical Security is
being transferred in reliance on Rule 144 under the
Securities Act, delivery of a certification to that
effect (substantially in the form of Exhibit D
hereto) and, at the option of the Company, an Opinion
of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with
the Securities Act; or
(5) if such Physical Security is
being transferred in reliance on Regulation S,
delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a
transferor certificate for Regulation S transfers
(substantially in the form of Exhibit F hereto) and,
at the option of the Company, an Opinion of Counsel
reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the
Securities Act; or
(6) if such Physical Security is
being transferred in reliance on another exemption
from the registration requirements of the Securities
Act, a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of
the Company, an Opinion
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of Counsel reasonably acceptable to the Company to
the effect that such transfer is in compliance with
the Securities Act.
(b) Restrictions on Transfer of a Physical Security for a
Beneficial Interest in a Global Security. A Physical Security the offer and sale
of which has not been registered under the Securities Act may not be exchanged
for a beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of a
Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(i) certification, substantially in the form of
Exhibit D hereto, that such Physical Security is being transferred (A)
to a QIB, (B) to an Institutional Accredited Investor or (C) in an
offshore transaction in reliance on Regulation S and, with respect to
(B) or (C), at the option of the Company, an Opinion of Counsel
reasonably acceptable to the Company to the effect that such transfer
is in compliance with the Securities Act; and
(ii) written instructions directing the Registrar or
co-Registrar to make, or to direct the Depository to make, an
endorsement on the applicable Global Security to reflect an increase in
the aggregate amount of the Securities represented by the Global
Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by the applicable
Global Security to be increased accordingly. If no 144A Global Security, IAI
Global Security or Regulation S Global Security, as the case may be, is then
outstanding, the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the Trustee shall,
upon written instructions from the Company in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or co-Registrar of written instructions,
or such other instruction as is customary for the Depository, from the
Depository or its nominee, requesting the registration of transfer of an
interest in a 144A Global Security, an IAI Global Security or a Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security representing the interest
being transferred), the Registrar or co-Registrar shall reflect on its books and
records (and the applicable Global Security) the applicable increase and
decrease of the principal amount of Securities represented by such types of
Global Securities, giving effect to such transfer. If the applicable type of
Global Security required to represent the interest as requested to be obtained
is not outstanding at the time of such request, the Company shall issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate a new Global Security of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
(d) Transfer of a Beneficial Interest in a Global Security for
a Physical Security.
(i) Any Person having a beneficial interest in a
Global Security may upon request exchange such beneficial interest for
a Physical Security; provided, however, that prior to the Registration,
a transferee that is a QIB or Institutional Accredited Investor may not
exchange a beneficial interest in Global Security for a Physical
Security. Upon receipt by the Registrar or co-Registrar of written
instructions, or such other form of instructions as is customary for
the Depository, from the Depository or its nominee on behalf of any
Person having a beneficial interest in a Global Security and upon
receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the Person
designated by the Depository as having such a beneficial interest
containing registration instructions and, in the case of any such
transfer or exchange of a beneficial interest in Securities the offer
and sale of which have not been registered under the Securities Act,
the following additional information and documents:
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(A) if such beneficial interest is being
transferred in reliance on Rule 144 under the Securities Act,
delivery of a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of the
Company, an Opinion of Counsel reasonably satisfactory to the
Company to the effect that such transfer is in compliance with
the Securities Act; or
(B) if such beneficial interest is being
transferred in reliance on another exemption from the
registration requirements of the Securities Act, a
certification to that effect (substantially in the form of
Exhibit D hereto) and, at the option of the Company, an
Opinion of Counsel reasonably satisfactory to the Company to
the effect that such transfer is in compliance with the
Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository
and the Registrar or co-Registrar, the aggregate principal amount of
the applicable Global Security to be reduced and, following such
reduction, the Company will execute and, upon receipt of an
authentication order in the form of an Officers' Certificate in
accordance with Section 2.02, the Trustee will authenticate and deliver
or mail to the transferee a Physical Security in the appropriate
principal amount.
(ii) Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.16(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Registrar or co-Registrar
in writing. The Registrar or co-Registrar shall deliver or mail such
Physical Securities to the Persons in whose names such Physical
Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global
Securities. Notwithstanding any other provisions of this Indenture, a Global
Security may not be transferred as a whole except by the Depository to a nominee
of the Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver or mail Securities that do not bear the
Private Placement Legend. Upon the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar or co-Registrar
shall deliver or mail only Securities that bear the Private Placement Legend
unless, and the Trustee is hereby authorized to deliver or mail Securities
without the Private Placement Legend if, (i) there is delivered to the Trustee
an Opinion of Counsel reasonably satisfactory to the Company and the Trustee to
the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act, (ii) such Security has been sold pursuant to an effective registration
statement under the Securities Act (including pursuant to a Registration) or
(iii) the date of such transfer, exchange or replacement is two years after the
later of (x) the Issue Date and (y) the last date that the Company or any
affiliate (as defined in Rule 144 under the Securities Act) of the Company was
the owner of such Securities (or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Participants
or beneficial owners of interest in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
The Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 2.15 or this Section
2.16. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
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ARTICLE 3
REDEMPTION
Section 3.01 Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities at the applicable
redemption price set forth thereon, it shall notify the Trustee in writing of
the Redemption Date and the principal amount of Securities to be redeemed. The
Company shall give such notice to the Trustee at least 45 days before the
Redemption Date (unless a shorter notice shall be agreed to by the Trustee in
writing), together with an Officers' Certificate stating that such redemption
will comply with the conditions contained herein.
Section 3.02 Selection of Securities To Be Redeemed. If less than all
of the Securities are to be redeemed pursuant to paragraph 5 of the Securities,
the Trustee shall select the Securities to be redeemed in compliance with the
requirements of the national securities exchange, if any, on which the
Securities are listed or, in the absence of such requirements or if the
Securities are not then listed on a national securities exchange, on a pro rata
basis, by lot or in such other manner as may be required pursuant to this
Indenture or otherwise as the Trustee shall deem fair and appropriate. Selection
of the Securities to be redeemed pursuant to paragraph 5(b) of the Securities
shall be made by the Trustee only on a pro rata basis or on as nearly a pro rata
basis as is practicable (subject to the procedures of the Depository) based on
the aggregate principal amount of Securities held by each Holder. The Trustee
shall make the selection from the Securities then outstanding, subject to
redemption and not previously called for redemption.
The Trustee may select for redemption pursuant to paragraph 5
of the Securities portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities 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 a notice of redemption
by first-class mail to each Holder whose Securities are to be redeemed at such
Holder's registered address; provided, however, that notice of a redemption
pursuant to paragraph 5(b) of the Securities shall be mailed to each Holder
whose Securities are to be redeemed no later than 60 days after the date of the
closing of the relevant Equity Offering of the Company.
Each notice of redemption shall identify the Securities to be
redeemed (including the CUSIP number thereon) and shall state:
(a) the Redemption Date;
(b) the redemption price;
(c) the name and address of the Paying Agent to which the
Securities are to be surrendered for redemption;
(d) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(e) that, as long as the Company has deposited with the
Paying Agent funds in satisfaction of the applicable redemption price pursuant
to this Indenture, interest on Securities called for redemption ceases to accrue
on and after the Redemption Date and the only remaining right of the Holders is
to receive payment of the redemption price upon surrender to the Paying Agent;
(f) in the case of any redemption pursuant to paragraph
5 of the Securities, if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security or Securities
in principal amount equal to the unredeemed portion thereof will be issued;
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(g) the subparagraph of the Securities pursuant to which
such redemption is being made; and
(h) that no representation is made as to the accuracy
of the CUSIP number listed in such notice or printed on such Security.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
Section 3.04 Effect of Notice of Redemption. Once a notice of
redemption is mailed, Securities called for redemption become due and payable on
the Redemption Date and at the redemption price. Upon surrender to the Paying
Agent, such Securities shall be paid at the redemption price, plus accrued
interest thereon, if any, to the Redemption Date, but interest installments
whose maturity is on or prior to such Redemption Date shall be payable to the
Holders of record at the close of business on the relevant Interest Record Date.
Section 3.05 Deposit of Redemption Price. At least one Business Day
before the Redemption Date, the Company shall deposit with the Paying Agent (or
if the Company is its own Paying Agent, it shall, on or before the Redemption
Date, segregate and hold in trust) money sufficient to pay the redemption price
of and accrued interest, if any, on all Securities to be redeemed on that date
other than Securities or portions thereof called for redemption on that date
which have been delivered by the Company to the Trustee for cancellation.
If any Security surrendered for redemption in the manner
provided in the Securities shall not be so paid on the Redemption Date due to
the failure of the Company to deposit with the Paying Agent money sufficient to
pay the redemption price thereof, the principal and accrued and unpaid interest,
if any, thereon shall, until paid or duly provided for, bear interest as
provided in Sections 2.12 and 4.01 with respect to any payment default.
Section 3.06 Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Trustee shall authenticate for the Holder a new
Security equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
COVENANTS
Section 4.01 Payment of Securities. The Company shall pay the principal
of and interest on the Securities in the manner provided in the Securities and
the Registration Rights Agreement. An installment of principal or interest shall
be considered paid on the date due if the Trustee or Paying Agent (other than
the Company or any Affiliates of the Company) holds on that date money
designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders of the Securities pursuant to
the terms of this Indenture.
The Company shall pay cash interest on overdue principal at
the same rate per annum borne by the Securities. The Company shall pay cash
interest on overdue installments of interest at the same rate per annum borne by
the Securities, to the extent lawful, as provided in Section 2.12.
Section 4.02 Maintenance of Office or Agency. The Company shall give
prompt written notice to the Trustee of the location, and any change in the
location, of any office or agency required by Section 2.03. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.02. The Company hereby initially designates the Trustee at
its address set forth in Section 13.02 as its office or agency in The Borough of
Manhattan, The City of New York, for such purposes.
Section 4.03 Limitation on Transactions with Affiliates. The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, enter into or permit to exist any transaction (including, without
limitation, the purchase, sale, lease, contribution or exchange of any property
or the rendering of any service) with or for the benefit of any of its
Affiliates (other than transactions between the Company and a Restricted
Subsidiary of the Company or among
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Restricted Subsidiaries of the Company) (an "Affiliate Transaction"), other than
Affiliate Transactions on terms that are no less favorable than those that might
reasonably have been obtained in a comparable transaction on an arm's-length
basis from a person that is not an Affiliate; provided, however, that for a
transaction or series of related transactions involving value of $5,000,000 or
more, such determination shall be made in good faith by a majority of members of
the board of directors of the Company and by a majority of the disinterested
members of the board of directors of the Company, if any; provided, further,
that for a transaction or series of related transactions involving value of
$15,000,000 or more, the Board of Directors of the Company has received an
opinion from an independent investment banking firm of nationally recognized
standing that such Affiliate Transaction is fair, from a financial point of
view, to the Company or such Restricted Subsidiary. The foregoing restrictions
shall not apply to (a) reasonable and customary directors' fees, indemnification
and similar arrangements and payments thereunder; (b) any obligations of the
Company under any employment agreement, noncompetition or confidentiality
agreement with any officer of the Company, as in effect on the Issue Date
(provided that each amendment of any of the foregoing agreements shall be
subject to the limitations of this covenant); (c) any Restricted Payment
permitted to be made pursuant to Section 4.09; (d) any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the board of directors of the Company; (e) loans or
advances to employees in the ordinary course of business of the Company or any
of its Restricted Subsidiaries consistent with past practices; (f) payments made
in connection with the Recapitalization, including, without limitation, fees to
Xxxxx Muse, as described in the Offering Memorandum; (g) payments by the Company
to Xxxxx Muse Partners in accordance with the terms of the Financial Advisory
Agreement and the Monitoring and Oversight Agreement; (h) the existence of, or
the performance by the Company or any of its Restricted Subsidiaries of its
obligations under the terms of, any stockholders agreement (including any
registration rights agreement related thereto) to which it is a party as of the
Issue Date or any amendment thereto (so long as any such amendment, taken as a
whole, is not disadvantageous to the Holders in any material respect); (i)
transactions with suppliers or purchasers or sellers of goods or services, in
each case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture, which are fair to the Company or its Restricted
Subsidiaries, in the reasonable determination of the Board of Directors of the
Company or the management thereof, or are on terms (taken as a whole) at least
as favorable as might reasonably have been obtained at such time from an
unaffiliated party; and (j) any agreement as in effect as of the Issue Date or
any amendment thereto (so long as any such amendment, taken as a whole, is not
disadvantageous to the Holders in any material respect) or any transaction
contemplated thereby.
Section 4.04 Limitation on Incurrence of Additional Indebtedness and
Issuance of Capital Stock.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise, with respect to (collectively, "incur") any Indebtedness (other than
Permitted Indebtedness) and the Company shall not issue any Disqualified Capital
Stock and its Restricted Subsidiaries shall not issue any Preferred Stock
(except Preferred Stock issued to the Company or a Restricted Subsidiary of the
Company so long as it is so held); provided, however, that the Company and its
Restricted Subsidiaries may incur Indebtedness or issue shares of such Capital
Stock if, in either case, the Company's Fixed Charge Coverage Ratio at the time
of incurrence of such Indebtedness or the issuance of such Capital Stock, as the
case may be, after giving pro forma effect to such incurrence or issuance as of
such date and to the use of proceeds therefrom would have been at least 2.0 to
1.
(b) The Company shall not incur or suffer to exist, or permit
any of its Restricted Subsidiaries to incur or suffer to exist, any Obligations
with respect to an Unrestricted Subsidiary that would violate the provisions set
forth in the definition of Unrestricted Subsidiary.
Section 4.05 Limitation on Layering. The Company shall not incur any
Indebtedness if such Indebtedness is subordinate or junior in ranking in any
respect to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to all Senior Subordinated Indebtedness (including the Securities).
Section 4.06 Payments for Consents. Neither the Company nor any of its
Restricted Subsidiaries shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
of any Securities for or as an inducement to any consent, waiver or amendment of
any of the terms or provisions of this Indenture
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or the Securities unless such consideration is offered to be paid or is paid to
all Holders of the Securities that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
Section 4.07 Limitation on Investment Company Status. The Company and
its Subsidiaries shall not take any action, or otherwise permit to exist any
circumstance, that would require the Company to register as an "investment
company" under the Investment Company Act of 1940, as amended.
Section 4.08 Limitation on Asset Sales. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale
unless (a) the Company or the applicable Restricted Subsidiary, as the case may
be, receives consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as determined in
good faith by management of the Company or, if such Asset Sale involves
consideration in excess of $10,000,000, by the board of directors of the
Company, as evidenced by a board resolution), (b) at least 75% of the
consideration received by the Company or such Restricted Subsidiary, as the case
may be, from such Asset Sale is in the form of cash or Cash Equivalents and is
received at the time of such disposition and (c) upon the consummation of an
Asset Sale, the Company applies, or causes such Restricted Subsidiary to apply,
such Net Cash Proceeds within 180 days of receipt thereof either (i) to repay
any Senior Indebtedness of the Company or any Indebtedness of a Restricted
Subsidiary of the Company (and, to the extent such Senior Indebtedness relates
to principal under a revolving credit or similar facility, to obtain a
corresponding reduction in the commitments thereunder, except that the Company
may temporarily repay Senior Indebtedness using the Net Cash Proceeds from such
Asset Sale and thereafter use such funds to reinvest pursuant to clause (ii)
below within the period set forth therein without having to obtain a
corresponding reduction in the commitments thereunder), (ii) to reinvest, or to
be contractually committed to reinvest pursuant to a binding agreement, in
Productive Assets and, in the latter case, to have so reinvested within 360 days
of the date of receipt of such Net Cash Proceeds or (iii) to purchase the
Securities and other Senior Subordinated Indebtedness, pro rata, tendered to the
Company for purchase at a price equal to 100% of the principal amount thereof
(or the accreted value of such other Senior Subordinated Indebtedness, if such
other Senior Subordinated Indebtedness is issued at a discount) plus accrued
interest thereon, if any, to the date of purchase pursuant to an offer to
purchase made by the Company as set forth below (a "Net Proceeds Offer");
provided, however, that the Company may defer making a Net Proceeds Offer until
the aggregate Net Cash Proceeds from Asset Sales not otherwise applied in
accordance with this covenant equal or exceed $15,000,000.
Subject to the deferral right set forth in the final proviso
of the preceding paragraph, each notice of a Net Proceeds Offer shall be mailed,
by first-class mail, to Holders not more than 180 days after the relevant Asset
Sale or, in the event the Company or a Restricted Subsidiary has entered into a
binding agreement as provided in (B) above, within 180 days following the
termination of such agreement but in no event later than 360 days after the
relevant Asset Sale. Such notice shall specify, among other things, the purchase
date (which shall be no earlier than 30 days nor later than 45 days from the
date such notice is mailed, except as otherwise required by law) and shall
otherwise comply with the procedures set forth in this Indenture. Upon receiving
notice of the Net Proceeds Offer, Holders may elect to tender their Securities
in whole or in part in integral multiples of $1,000. To the extent Holders
properly tender Securities in an amount which, together with all other Senior
Subordinated Indebtedness so tendered, exceeds the Net Proceeds Offer, the
Securities and other Senior Subordinated Indebtedness of tendering Holders shall
be repurchased on a pro rata basis (based upon the aggregate principal amount
tendered, or, if applicable, the aggregate accreted value thereof). To the
extent that the aggregate principal amount of Securities tendered pursuant to
any Net Proceeds Offer, which, together with the aggregate principal amount or
aggregate accreted value, as the case may be, of all other Senior Subordinated
Indebtedness so tendered, is less than the amount of Net Cash Proceeds subject
to such Net Proceeds Offer, the Company may use any remaining portion of such
Net Cash Proceeds not required to fund the repurchase of tendered Securities and
other Senior Subordinated Indebtedness for any purposes not otherwise prohibited
by this Indenture. Upon the consummation of any Net Proceeds Offer, the amount
of Net Cash Proceeds subject to any future Net Proceeds Offer from the Asset
Sales giving rise to such Net Cash Proceeds shall be deemed to be zero.
The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act to the extent applicable in connection with the
repurchase of Securities pursuant to a Net Proceeds Offer.
Section 4.09 Limitation on Restricted Payments.
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(a) The Company shall not, and shall not cause or permit any
of its Restricted Subsidiaries, to, directly or indirectly, make any Restricted
Payment if at the time of such Restricted Payment and immediately after giving
effect thereto:
(i) a Default or Event of Default shall have
occurred and be continuing; or
(ii) the Company is not able to incur $1.00 of
additional Indebtedness (other than Permitted Indebtedness) in
compliance with Section 4.04; or
(iii) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company
and its Restricted Subsidiaries after the Issue Date (the amount
expended for such purposes, if other than in cash, being the fair
market value of such property as determined by the board of directors
of the Company in good faith), exceeds the sum of (A) 50% of the
cumulative Consolidated Net Income of the Company for the period (taken
as one accounting period) from the beginning of the first fiscal
quarter commencing after the Issue Date to the most recent date for
which internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (B) 100% of the
aggregate net proceeds, including the fair market value of property
other than cash as determined by the board of directors of the Company
in good faith, received subsequent to the Issue Date by the Company
from any Person (other than a Restricted Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date of Qualified
Capital Stock of the Company (excluding (1) any net proceeds from
issuances and sales financed directly or indirectly using funds
borrowed from the Company or any Restricted Subsidiary of the Company,
until and to the extent such borrowing is repaid, but including the
proceeds from the issuance and sale of any securities convertible into
or exchangeable for Qualified Capital Stock to the extent such
securities are so converted or exchanged and including any additional
proceeds received by the Company upon such conversion or exchange and
(2) any net proceeds received from issuances and sales that are used to
consummate a transaction described in clause (ii) of paragraph (b)
below), plus (C) without duplication of any amount included in clause
(iii)(B) above, 100% of the aggregate net proceeds, including the fair
market value of property other than cash (valued as provided in clause
(iii)(B) above), received by the Company as a capital contribution
subsequent to the Issue Date, plus (D) the amount equal to the net
reduction in Investments (other than Permitted Investments) made by the
Company or any of its Restricted Subsidiaries in any Person resulting
from, and without duplication, (1) repurchases or redemptions of such
Investments by such Person, proceeds realized upon the sale of such
Investment to an unaffiliated purchaser and repayments of loans or
advances or other transfers of assets by such Person to the Company or
any Restricted Subsidiary of the Company or (2) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each
case as provided in the definition of "Investment") not to exceed, in
the case of any Restricted Subsidiary, the amount of Investments
previously made by the Company or any of its Restricted Subsidiaries in
such Unrestricted Subsidiary, which amount was included in the
calculation of Restricted Payments; provided, however, that no amount
shall be included under this clause (D) to the extent it is already
included in Consolidated Net Income, plus (E) the aggregate net cash
proceeds received by a Person in consideration for the issuance of such
Person's Capital Stock (other than Disqualified Capital Stock) that are
held by such Person at the time such Person is merged with and into the
Company in accordance with Section 5.01 subsequent to the Issue Date;
provided, however, that concurrently with or immediately following such
merger the Company uses an amount equal to such net cash proceeds to
redeem or repurchase the Company's Capital Stock, plus (F) $20,000,000.
(b) Notwithstanding the foregoing, these provisions shall not
prohibit: (i) the payment of any dividend or the making of any distribution
within 60 days after the date of its declaration if such dividend or
distribution would have been permitted on the date of declaration; (ii) the
purchase, redemption or other acquisition or retirement of any Capital Stock of
the Company or any warrants, options or other rights to acquire shares of any
class of such Capital Stock either (x) solely in exchange for shares of
Qualified Capital Stock or other rights to acquire Qualified Capital Stock or
(y) through the application of the net proceeds of a substantially concurrent
sale for cash (other than to a Restricted Subsidiary of the Company) of shares
of Qualified Capital Stock or warrants, options or other rights to acquire
Qualified Capital Stock or (z) in the case of Disqualified Capital Stock, solely
in exchange for, or through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Restricted Subsidiary of
the Company) of, Disqualified Capital Stock; (iii) payments made pursuant to any
merger, consolidation or sale of assets effected in accordance with Section
5.01;
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provided, however, that no such payment may be made pursuant to this clause (3)
unless, after giving effect to such transaction (and the incurrence of any
Indebtedness in connection therewith and the use of the proceeds thereof), the
Company would be able to incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.04 such that after
incurring that $1.00 of additional Indebtedness, the Company shall have a Fixed
Charge Coverage Ratio of at least 2.0 to 1; (iv) payments to enable the Company
or a Holding Company (as defined) to pay dividends on its Capital Stock (other
than Disqualified Capital Stock) after the first Public Equity Offering in an
annual amount not to exceed 6.0% of the gross proceeds (before deducting
underwriting discounts and commissions and other fees and expenses of the
offering) received from shares of Capital Stock (other than Disqualified Capital
Stock) sold for the account of the issuer thereof (and not for the account of
any stockholder) in such initial Public Equity Offering; (v) payments by the
Company to fund the payment by any company as to which the Company is, directly
or indirectly, a Subsidiary (a "Holding Company") of audit, accounting, legal or
other similar expenses, to pay franchise or other similar taxes and to pay other
corporate overhead expenses, so long as such dividends are paid as and when
needed by its respective direct or indirect Holding Company and so long as the
aggregate amount of payments pursuant to this clause (v) does not exceed
$1,000,000 in any calendar year; (vi) payments by the Company to repurchase, or
to enable a Holding Company to repurchase, Capital Stock or other securities
from employees or independent contractors of the Company or a Holding Company in
an aggregate amount not to exceed $20,000,000; (vii) payments by the Company to
redeem or repurchase, or to enable a Holding Company to redeem or repurchase,
stock purchase or similar rights granted by the Company or a Holding Company
with respect to its Capital Stock in an aggregate amount not to exceed $500,000;
(viii) payments, not to exceed $200,000 in the aggregate, to enable the Company
or a Holding Company to make cash payments to holders of its Capital Stock in
lieu of the issuance of fractional shares of its Capital Stock; (ix) payments by
the Company to Xxxxx Muse Partners in accordance with the terms of the Financial
Advisory Agreement and the Monitoring and Oversight Agreement; provided,
however, that in the case of clauses (iii), (vi), (vii) and (viii), no Event of
Default shall have occurred or be continuing at the time of such payment or as a
result thereof. In determining the aggregate amount of Restricted Payments made
subsequent to the Issue Date, amounts expended pursuant to clauses (i), (iv),
(vi), (vii) and (viii) shall be included in such calculation.
Section 4.10 Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any
of its Subsidiaries is declared due and payable before its maturity because of
the occurrence of any default (or any event which, with notice or lapse of time,
or both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of the occurrence and continuation of
any Default or Event of Default, the Company shall promptly deliver an Officers'
Certificate to the Trustee specifying the Default or Event of Default.
Section 4.11 Reports. So long as any of the Securities are outstanding,
the Company shall provide to the Trustee and the Holders of Securities and file
with the Commission, to the extent such submissions are accepted for filing by
the Commission, copies of the annual reports and of the information, documents
and other reports that the Company would have been required to file with the
Commission pursuant to Sections 13 or 15(d) of the Exchange Act, regardless of
whether the Company is then obligated to file such reports.
Section 4.12 Limitations on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries. The Company shall not, and shall not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause to permit to exist or become effective, by operation of the
charter of such Restricted Subsidiary or by reason of any agreement, instrument,
judgment, decree, rule, order, statute or governmental regulation, any
encumbrance or restriction on the ability of any Restricted Subsidiary to (a)
pay dividends or make any other distributions on its Capital Stock, (b) make
loans or advances or pay any Indebtedness or other obligation owed to the
Company or any of its Restricted Subsidiaries or (c) transfer any of its
property or assets to the Company, except for such encumbrances or restrictions
existing under or by reason of: (i) applicable law; (ii) this Indenture; (iii)
customary non- assignment provisions of any lease governing a leasehold interest
of the Company or any Restricted Subsidiary; (iv) any instrument governing
Acquired Indebtedness or Acquired Preferred Stock, which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired; (v) agreements existing on the Issue
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Date (including the Senior Credit Facility) as such agreements are from time to
time in effect; provided, however, that any amendments or modifications of such
agreements that affect the encumbrances or restrictions of the types subject to
this covenant shall not result in such encumbrances or restrictions being less
favorable to the Company in any material respect, as determined in good faith by
the board of directors of the Company, than the provisions as in effect before
giving effect to the respective amendment or modification; (vi) any restriction
with respect to such 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; (vii) an agreement effecting a refinancing, replacement or
substitution of Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clause (ii), (iv) or (v) above or any other agreement
evidencing Indebtedness permitted under this Indenture; provided, however, that
the provisions relating to such encumbrance or restriction contained in any such
refinancing, replacement or substitution agreement or any such other agreement
are no less favorable to the Company in any material respect as determined in
good faith by the board of directors of the Company than the provisions relating
to such encumbrance or restriction contained in agreements referred to in such
clause (ii), (iv) or (v); (viii) restrictions on the transfer of the assets
subject to any Lien imposed by the holder of such Lien; (ix) a licensing
agreement to the extent such restrictions or encumbrances limit the transfer of
property subject to such licensing agreement; (x) restrictions relating to
Subsidiary Preferred Stock that require that due and payable dividends thereon
to be paid in full prior to dividends on such Subsidiary's common stock; or (xi)
any agreement or charter provision evidencing Indebtedness or Capital Stock
permitted under this Indenture; provided, however, that the provisions relating
to such encumbrance or restriction contained in such agreement or charter
provision are not less favorable to the Company in any material respect as
determined in good faith by the board of directors of the Company than the
provisions relating to such encumbrance or restriction contained in this
Indenture.
Section 4.13 Subsidiary Guarantees by Restricted Subsidiaries.
(a) The Company shall not create or acquire, nor cause or
permit any of its Restricted Subsidiaries, directly or indirectly, to create or
acquire, any Subsidiary other than (i) an Unrestricted Subsidiary in accordance
with the other terms of this Indenture or (ii) a Restricted Subsidiary that,
simultaneously with such creation or acquisition, (A) executes and delivers to
the Trustee a supplemental indenture to this Indenture pursuant to which it will
become a Guarantor in accordance with Article 11 hereof unless such Restricted
Subsidiary is organized under the laws of a jurisdiction other than the United
States or any State thereof and (B) delivers to the Trustee an Opinion of
Counsel that such supplemental indenture has been duly authorized, executed and
delivered by such Restricted Subsidiary and constitutes a valid, binding and
enforceable obligation of such Restricted Subsidiary (which opinion may be
subject to customary assumptions and qualifications).
(b) Any Guarantor that is designated an Unrestricted
Subsidiary shall upon such designation be released and discharged of its
Subsidiary Guarantee obligations in respect of this Indenture and the Securities
and any Unrestricted Subsidiary that is redesignated as a Restricted Subsidiary
shall upon such redesignation be required to become a Guarantor in accordance
with the requirements of Section 4.13(a)(ii).
Section 4.14 Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder
shall have the right to require that the Company purchase all or a portion of
such Holder's Securities in cash pursuant to the offer described below (the
"Change of Control Offer"), at a purchase price equal to 101% of the principal
amount thereof plus accrued and unpaid interest, if any, to the date of
purchase.
(b) Prior to the mailing of the notice referred to below, but
in any event within 30 days following the date on which the Company becomes
aware that a Change of Control has occurred, if the purchase of the Securities
would violate or constitute a default under any other Indebtedness of the
Company, then the Company shall, to the extent needed to permit such purchase of
Securities, either (i) repay all such Indebtedness and terminate all commitments
outstanding thereunder or (ii) obtain the requisite consents, if any, under such
Indebtedness to permit the purchase of the Securities as provided below. The
Company shall first comply with the covenant in the preceding sentence before it
will be required to make the Change of Control Offer or purchase the Securities
pursuant to the provisions described below.
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(c) Within 30 days following the date on which the Company
becomes aware that a Change of Control has occurred, the Company shall send, by
first-class mail postage prepaid, a notice to each Holder of Securities, which
notice shall govern the terms of the Change of Control Offer. The notice to the
Holders shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Change of Control Offer. Such
notice shall state:
(i) that the Change of Control Offer is being made
pursuant to this Section 4.14 and that all Securities validly tendered
and not withdrawn will be accepted for payment;
(ii) the purchase price (including the amount of
accrued interest, if any) and the purchase date (which shall be no
earlier than 30 days nor later than 45 days from the date such notice
is mailed, other than as may be required by law) (the "Change of
Control Payment Date");
(iii) that any Note not tendered will continue to
accrue interest;
(iv) that, unless the Company defaults in making
payment therefor, any Security accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change
of Control Payment Date;
(v) that Holders electing to have a Security
purchased pursuant to a Change of Control Offer will be required to
surrender the Security, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Security completed, to the Paying
Agent and Registrar for the Securities at the address specified in the
notice prior to the close of business on the Business Day prior to the
Change of Control Payment Date;
(vi) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than five Business
Days prior to the Change of Control Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Securities the Holder delivered for
purchase and a statement that such Holder is withdrawing his election
to have such Security purchased;
(vii) that Holders whose Securities are purchased
only in part shall be issued new Securities in a principal amount equal
to the unpurchased portion of the Securities surrendered; provided,
however, that each Security purchased and each new Security issued
shall be in a principal amount of $1,000 or integral multiples thereof;
and
(viii) the circumstances and relevant facts regarding
such Change of Control.
(d) On or before the Change of Control Payment Date, the
Company shall (i) accept for payment Securities or portions thereof (in integral
multiples of $1,000) validly tendered pursuant to the Change of Control Offer,
(ii) deposit with the Paying Agent in accordance with Section 2.14 cash in U.S.
dollars or United States Government Obligations sufficient to pay the purchase
price plus accrued and unpaid interest, if any, of all Securities so tendered
and (iii) deliver to the Trustee Securities so accepted together with an
Officers' Certificate stating the Securities or portions thereof being purchased
by the Company. Upon receipt by the Paying Agent of the monies specified in
clause (ii) above and a copy of the Officers' Certificate specified in clause
(iii) above, the Paying Agent shall promptly mail to the Holders of Securities
so accepted payment in an amount equal to the purchase price plus accrued and
unpaid interest, if any, out of the funds deposited with the Paying Agent in
accordance with the preceding sentence. The Trustee shall promptly authenticate
and mail to such Holders new Securities equal in principal amount to any
unpurchased portion of the Securities surrendered. Upon the payment of the
purchase price for the Securities accepted for purchase, the Trustee shall
return the Securities purchased to the Company for cancellation. Any monies
remaining after the purchase of Securities pursuant to a Change of Control Offer
shall be returned within three Business Days by the Trustee to the Company
except with respect to monies owed as obligations to the Trustee pursuant to
Article 7. For purposes of this Section 4.14, the Trustee shall, except with
respect to monies owed as obligations to the Trustee pursuant to Article 7, act
as the Paying Agent.
(e) The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in connection
with
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the purchase of the Securities pursuant to a Change of Control Offer. To the
extent the provisions of any such rule conflict with the provisions of this
Indenture relating to a Change of Control Offer, the Company shall comply with
the provisions of such rule and be deemed not to have breached its obligations
relating to such Change of Control Offer by virtue thereof.
(f) Paragraphs (a)-(e) notwithstanding, the Company shall not
be required to make a Change of Control Offer in the event of (i) changes in a
majority of the board of directors of the Company so long as a majority of such
board of directors continues to consist of Continuing Directors and (ii) certain
transactions with Permitted Holders (including Xxxxx Muse, its officers and
directors, and their respective Affiliates).
Section 4.15 Limitation on Liens. The Company shall not, and shall not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur or assume any Lien securing Indebtedness on any asset now owned or
hereafter acquired, or any income or profits therefrom or assign or convey any
right to receive income therefrom, unless contemporaneously therewith effective
provision is made, in the case of the Company, to secure the Securities and all
other amounts due under this Indenture, and in the case of a Restricted
Subsidiary which is a Guarantor, to secure such Restricted Subsidiary's
Subsidiary Guarantee of the Securities and all other amounts due under this
Indenture, equally and ratably with such Indebtedness (or, in the event that
such Indebtedness is subordinated in right of payment to the Securities or such
Subsidiary's Subsidiary Guarantee, prior to such Indebtedness) with a Lien on
the same properties and assets securing such Indebtedness for so long as such
Indebtedness is secured by such Lien, except for (a) Liens securing Senior
Indebtedness and Guarantor Senior Indebtedness, and (b) Liens securing
Indebtedness described in clause (xi) of the definition of "Permitted
Indebtedness"; provided that such Liens cover only the property referred to in
such definition.
Section 4.16 Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the close of each fiscal year a certificate signed
by the principal executive officer, principal financial officer or principal
accounting officer stating that a review of the activities of the Company has
been made under the supervision of the signing officer with a view to
determining whether a Default or Event of Default has occurred and whether or
not the signers know of any Default or Event of Default by the Company that
occurred during such fiscal year. If they do know of such a Default or Event of
Default, their status and the action the Company is taking or proposes to take
with respect thereto. The first certificate to be delivered by the Company
pursuant to this Section 4.16 shall be for the fiscal year ending December 31,
1998.
Section 4.17 Corporate Existence. Subject to Article 5, the Company
shall do or shall cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence and the corporate, partnership or
other existence of each Subsidiary in accordance with the respective
organizational documents of each such Subsidiary and the rights (charter and
statutory) and material franchises of the Company and the Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right or franchise, or the corporate existence of any Subsidiary, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Subsidiaries, taken as a whole; provided, further, however, that a determination
of the Board of Directors of the Company shall not be required in the event of a
merger of one or more Restricted Subsidiaries of the Company with or into
another Restricted Subsidiary of the Company or another Person, if the surviving
Person is a Restricted Subsidiary of the Company organized under the laws of the
United States or a State thereof or of the District of Columbia. This Section
4.17 shall not prohibit the Company from taking any other action otherwise
permitted by, and made in accordance with, the provisions of this Indenture.
Section 4.18 Maintenance of Properties and Insurance.
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its material properties in normal condition (subject
to ordinary wear and tear) and make all reasonably necessary repairs, renewals
or replacements thereto as in the judgment of the Company may be reasonably
necessary to the conduct of the business of the Company and its Restricted
Subsidiaries; provided, however, that nothing in this Section 4.18 shall prevent
the Company or any of its Restricted Subsidiaries from discontinuing the
operation and maintenance of any of its properties, if such properties are, in
the reasonable and good faith judgment of the Board of Directors of the Company
or the Restricted Subsidiary, as the case may be, no longer reasonably necessary
in the conduct of their respective businesses.
(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,
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good faith opinion of the Company, are reasonably adequate and appropriate for
the conduct of the business of the Company and such Restricted Subsidiaries.
Section 4.19 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, (a) all material taxes, assessments and governmental charges
(including withholding taxes and any penalties, interest and 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 (b) all material lawful claims for
labor, materials, supplies and services that, if unpaid, might by law become a
Lien upon the property of it or any of its Restricted Subsidiaries; provided,
however, that there shall not be required to be paid or discharged any such tax,
assessment or charge, the amount, applicability or validity of which is being
contested in good faith by appropriate proceedings and for which adequate
provision has been made or where the failure to effect such payment or discharge
is not adverse in any material respect to the Holders.
Section 4.20 Waiver of Stay, Extension or Usury Laws. The Company
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 the Company from paying all or any portion of the
principal of, premium or interest on the Securities as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
obligations 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 covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE 5
MERGERS; SUCCESSOR CORPORATION
Section 5.01 Merger, Consolidation and Sale of Assets. The Company
shall not, in a single transaction or a series of related transactions,
consolidate with or merge with or into, or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of the Company's or any
Guarantor's assets determined on a consolidated basis for the Company to another
Person or adopt a plan of liquidation unless (a) either (i) the Company is the
Surviving Person or (2) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person that acquires by
conveyance, transfer or lease the properties and assets of the Company or such
Guarantor substantially as an entirety or in the case of a plan of liquidation,
the Person to which assets of the Company have been transferred, shall be a
corporation, partnership, limited liability company or trust organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; (b) such Surviving Person shall assume all of the
obligations of the Company or such Guarantor under the Securities and this
Indenture pursuant to a supplemental indenture in a form and substance
reasonably satisfactory to the Trustee; (c) immediately after giving effect to
such transaction and the use of the proceeds therefrom (on a pro forma basis,
including giving effect to any Indebtedness incurred or anticipated to be
incurred in connection with such transaction), (x) no Default or Event of
Default shall have occurred and be continuing and (y) the Company (in the case
of clause (i) of the foregoing clause (a)) or such Person (in the case of clause
(ii) of the foregoing clause (a)) shall be able to incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with Section
4.04; and (d) the Company has delivered to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer complies with this
Indenture and that all conditions precedent in this Indenture relating to such
transaction have been satisfied. For purposes of the foregoing, the transfer (by
lease, assignment, sale or otherwise, in a single transaction or series of
related transactions) of all or substantially all of the properties and assets
of one or more Restricted Subsidiaries, the Capital Stock of which constitutes
all or substantially all of the properties or assets of the Company, shall be
deemed to be the transfer of all or substantially all of the properties and
assets of the Company. Notwithstanding the foregoing clauses (b) and (c), (A)
any Restricted Subsidiary of the Company may consolidate with, merge into or
transfer all or part of its properties and assets to the Company and (B) the
Company may merge with an Affiliate thereof organized solely for the purpose of
reorganizing the Company in another jurisdiction in the U.S. to realize tax or
other benefits. Notwithstanding the foregoing, clauses (b), (c) and (d) shall
not apply to the Recapitalization.
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Section 5.02 Successor Corporation Substituted. In the event of any
transaction (other than a lease) described in and complying with the conditions
listed in Section 5.01 in which the Company is not the surviving person and the
surviving person is to assume all the Obligations of the Company under the
Securities, this Indenture and the Registration Rights Agreement pursuant to a
supplemental indenture, such surviving person shall succeed to, and be
substituted for, and may exercise every right and power of the Company, and the
Company shall be discharged from its Obligations under this Indenture, the
Securities and the Registration Rights Agreement.
ARTICLE 6
DEFAULT AND REMEDIES
Section 6.01 Events of Default. Each of the following shall be an
"Event of Default" for purposes of this Indenture:
(a) the failure to pay interest on any Security when the same
becomes due and payable and the Default continues for a period of 30 days
(whether or not such payment is prohibited by Article 7);
(b) the failure to pay principal of or premium, if any, on any
Security when such principal or premium, if any, becomes due and payable, at
maturity, upon redemption or otherwise (whether or not such payment is
prohibited by Article 7);
(c) a default in the observance or performance of any other
covenant or agreement contained in the Securities or this Indenture, which
default continues for a period of 30 days after the Company receives written
notice thereof specifying the default from the Trustee or Holders of at least
25% in aggregate principal amount of outstanding Securities;
(d) the failure to pay at the final stated maturity (giving
effect to any extensions thereof) the principal amount of any Indebtedness of
the Company or any Restricted Subsidiary of the Company, or the acceleration of
the final stated maturity of any such Indebtedness, if the aggregate principal
amount of such Indebtedness, together with the aggregate principal amount of any
other such Indebtedness in default for failure to pay principal at the final
stated maturity (giving effect to any extensions thereof) or which has been
accelerated, aggregates $10,000,000 or more at any time in each case after a
10-day period during which such default shall not have been cured or such
acceleration rescinded;
(e) one or more judgments in an aggregate amount in excess of
$15,000,000 (which are not covered by insurance as to which the insurer has not
disclaimed coverage) being rendered against the Company or any of its
Significant Restricted Subsidiaries and such judgment or judgments remain
undischarged or unstayed for a period of 60 days after such judgment or
judgments become final and nonappealable;
(f) the Company or any of its Significant Restricted
Subsidiaries (or one or more Restricted Subsidiaries that, taken together would
constitute a Significant Restricted Subsidiary) pursuant to or within the
meaning of any Bankruptcy Law: (i) admits in writing its inability to pay its
debts generally as they become due; (ii) commences a voluntary case or
proceeding; (iii) consents to the entry of an order for relief against it in an
involuntary case or proceeding; (iv) consents or acquiesces in the institution
of a bankruptcy or insolvency proceeding against it; (v) consents to the
appointment of a Custodian of it or for all or substantially all of its
property; or (vi) makes a general assignment for the benefit of its creditors,
or any of them takes any action to authorize or effect any of the foregoing;
(g) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that: (i) is for relief against the Company or
any Significant Restricted Subsidiary (or one or more Restricted Subsidiaries
that, taken together would constitute a Significant Restricted Subsidiary) of
the Company in an involuntary case or proceeding; (ii) appoints a Custodian of
the Company or any Significant Restricted Subsidiary (or one or more Restricted
Subsidiaries that, taken together would constitute a Significant Restricted
Subsidiary) of the Company for all or substantially all of its property; or
(iii) orders the liquidation of the Company or any Significant Restricted
Subsidiary (or one or more Restricted Subsidiaries that, taken together would
constitute a Significant Restricted Subsidiary) of the Company; and in each case
the order or decree remains unstayed and in effect for 60 days; provided,
however, that if the entry of such order or decree is
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appealed and dismissed on appeal, then the Event of Default hereunder by reason
of the entry of such order or decree shall be deemed to have been cured; or
(h) except as permitted by this Indenture, any Subsidiary
Guarantee shall be held in a judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any Guarantor,
or any Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee.
Section 6.02 Acceleration. If an Event of Default with respect to the
Securities (other than an Event of Default specified in clause (f) or (g) of
Section 6.01) occurs and is continuing, the Trustee may, or the Trustee upon the
request of Holders of 25% in principal amount of the outstanding Securities
shall, or the Holders of at least 25% in aggregate principal amount of the
outstanding Securities may declare the principal of all the Securities, together
with all accrued and unpaid interest and premium, if any, to be due and payable
by notice in writing to the Company and the Trustee specifying the respective
Event of Default and that it is a "notice of acceleration" (the "Acceleration
Notice"), and the same (i) shall become immediately due and payable or (ii) if
there are any amounts outstanding under the Senior Credit Facilities, will
become due and payable upon the first to occur of an acceleration under the
Senior Credit Facilities or five Business Days after receipt by the Company and
the agent under the Senior Credit Facilities of such Acceleration Notice (unless
all Events of Default specified in such Acceleration Notice have been cured or
waived).
If an Event of Default specified in clause (f) or (g) of
Section 6.01 occurs, all unpaid principal of and accrued interest on all
outstanding Securities shall ipso facto become immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
At any time after such declaration with respect to the
Securities, the Holders of a majority in principal amount of Securities then
outstanding (by notice to the Trustee) may rescind and cancel such declaration
and its consequences if (i) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction, (ii) all existing Defaults and
Events of Default have been cured or waived except nonpayment of principal of or
interest on the Securities that has become due solely by such declaration of
acceleration, (iii) to the extent the payment of such interest is lawful,
interest (at the same rate specified in the Securities) on overdue installments
of interest and overdue payments of principal, which has become due otherwise
than by such declaration of acceleration has been paid, (iv) the Company has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
reasonable expenses, disbursements and advances and (v) in the event of the cure
or waiver of a Default or Event of Default of the type described in clause (f)
or (g) of Section 6.01, the Trustee has received an Officers' Certificate and
Opinion of Counsel that such Default or Event of Default has been cured or
waived. The Holders of a majority in principal amount of the Securities may
waive any existing Default or Event of Default under this Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any Securities. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
Section 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of or interest on the Securities
or to enforce the performance of any provision of the Securities or this
Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Holder in exercising any right or
remedy maturing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
Section 6.04 Waiver of Past Default. Subject to Sections 2.09, 6.07 and
10.02, prior to the declaration of acceleration of the Securities, the Holders
of not less than a majority in aggregate principal amount of the outstanding
Securities by written notice to the Trustee may waive an existing Default or
Event of Default and its consequences, except a Default in the payment of
principal of or interest on any Security as specified in clauses (a), (b), (c)
and (d) of Section 6.01 or a Default in respect of any term or provision of this
Indenture that may not be amended or modified without the consent of each Holder
affected as provided in Section 10.02. The Company shall deliver to the Trustee
an Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder
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and under the Securities, respectively. This paragraph of this Section 6.04
shall be in lieu of ss. 316(a)(1)(B) of the TIA and such ss. 316(a)(1)(B) of the
TIA is hereby expressly excluded from this Indenture and the Securities, as
permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
Section 6.05 Control by Majority. Subject to Section 2.09, the Holders
of a majority in principal amount of the outstanding Securities may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture that the Trustee determines may be unduly prejudicial to the rights of
another Holder, it being understood that the Trustee shall have no duty (subject
to Section 8.01) to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders, or that may involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against any loss or expense caused by taking such action
or following such direction. This Section 6.05 shall be in lieu of ss.
316(a)(1)(A) of the TIA, and such ss. 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
Section 6.06 Limitation on Suits. A Holder may not pursue any remedy
with respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in aggregate principal amount
of the outstanding Securities make a written request to the Trustee to pursue a
remedy;
(c) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities do not give the Trustee a
direction which, in the opinion of the Trustee, is inconsistent with the
request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
Section 6.07 Rights of Holders To Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of or interest on a Security, on or after the respective due dates
expressed in the Security, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
Section 6.08 Collection Suit by Trustee. If an Event of Default in
payment of principal or interest specified in Section 6.01(a), (b), (c) or (d)
occurs and is continuing, the Trustee may recover judgment in its own name and
as trustee of an express trust against the Company or any other obligor on the
Securities for the whole amount of principal and accrued interest remaining
unpaid, together with interest overdue on principal and to the extent that
payment of such interest is lawful, interest on overdue installments of
interest, in each case at the rate per annum borne by the Securities and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the
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reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and the Holders allowed in any judicial proceedings
relative to the Company (or any other obligor upon the Securities), its
creditors or its property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 8.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditors'
committee.
Section 6.10 Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
First: to the Trustee for amounts due under Section 8.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or priority
of any kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
Section 6.11 Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 shall not apply
to a suit by the Trustee, a suit by a Holder or group of Holders of more than
10% in aggregate principal amount of the outstanding Securities, or to any suit
instituted by any Holder for the enforcement or the payment of the principal or
interest on any Securities on or after the respective due dates expressed in the
Security.
ARTICLE 7
SUBORDINATION OF SECURITIES
Section 7.01 Agreement To Subordinate. The Company agrees, and each
Holder by accepting any Security agrees, that the Indebtedness evidenced by the
Securities is subordinated in right of payment, to the extent and in the manner
provided in this Article 7, to the payment when due of all Senior Indebtedness
of the Company and that such subordination is for the benefit of and enforceable
by the holders of Senior Indebtedness. The Securities shall in all respects rank
pari passu with all other Senior Subordinated Indebtedness of the Company, and
only Indebtedness of the Company which is Senior Indebtedness will rank senior
to the Securities in accordance with the provisions set forth herein. Unsecured
Indebtedness is not deemed to be subordinate or junior to Secured Indebtedness
merely because it is unsecured, nor is any Indebtedness deemed to be subordinate
or junior to other Indebtedness merely because it matures after such other
Indebtedness. Secured Indebtedness is not deemed to be Senior Indebtedness
merely because it is secured. All provisions of this Article 7 shall be subject
to Section 7.12.
Section 7.02 Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company upon a total or partial liquidation or
dissolution or reorganization or bankruptcy of or similar proceeding relating to
the Company or its property:
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(a) holders of Senior Indebtedness of the Company shall be
entitled to receive payment in full in cash or Cash Equivalents of all Senior
Indebtedness of the Company before holders of Securities shall be entitled to
receive any payment of principal of or interest on or other amounts with respect
to the Securities from the Company; and
(b) until the Senior Indebtedness of the Company is paid in
full, in cash or Cash Equivalents, any payment or distribution to which Holders
would be entitled but for the provisions of this Article 7 shall be made to
holders of Senior Indebtedness as their interests may appear.
Section 7.03 Default on Senior Indebtedness. The Company may not pay
the principal of, premium (if any), or interest on, and other obligations with
respect to, the Securities or make any deposit pursuant to Section 9.03 or
repurchase, redeem or otherwise retire any Securities (collectively, "pay the
Securities") if (a) any Senior Indebtedness is not paid when due or (b) any
other default on Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either case,
(i) the default has been cured or waived or is no longer continuing and/or any
such acceleration has been rescinded or (ii) such Senior Indebtedness has been
paid in full; provided, however, that the Company may pay the Securities,
subject to the provisions of Section 7.02, without regard to the foregoing if
the Company and the Trustee receive written notice approving such payment from
the Representatives of the Senior Indebtedness with respect to which either of
the events set forth in clause (a) or (b) of this sentence has occurred or is
continuing. During the continuance of any default (other than a default
described in clause (a) or (b) of the preceding sentence) with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities (except (A) in Qualified Capital
Stock issued by the Company to pay interest on the Securities or issued in
exchange for the Securities, (B) in securities substantially identical to the
Securities issued by the Company in payment of interest accrued thereon or (C)
in securities issued by the Company which are subordinated to the Senior
Indebtedness at least to the same extent as the Securities and having a Weighted
Average Life to Maturity at least equal to the remaining Weighted Average Life
to Maturity of the Securities) for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representative of
the holders of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (1) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (2)
because the default giving rise to such Blockage Notice has been cured, waived
or is no longer continuing or (3) because such Designated Senior Indebtedness
has been repaid in full). Notwithstanding the provisions of the immediately
preceding sentence, but subject to the provisions of the first sentence of this
Section 7.03 and the provisions of Section 7.02, the Company may resume payments
on the Securities after the end of such Payment Blockage Period. Not more than
one Blockage Notice may be given, and not more than one Payment Blockage Period
may occur, in any consecutive 360-day period, irrespective of the number of
defaults with respect to Designated Senior Indebtedness during such period.
However, if any Blockage Notice within such 360-day period is given by or on
behalf of any holders of Designated Senior Indebtedness (other than the agent
under the Senior Credit Facilities), the agent under the Senior Credit
Facilities may give another Blockage Notice within such period. In no event,
however, may the total number of days during which any Payment Blockage Period
or Payment Blockage Periods are in effect exceed 179 days in the aggregate
during any 360 consecutive day period. No nonpayment default that existed or was
continuing on the date of delivery of any Blockage Notice to the Trustee shall
be, or be made, the basis for a subsequent Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90 consecutive
days.
Section 7.04 Acceleration of Payment of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of Designated Senior Indebtedness or
the Representative (if any) of any issue of Designated Senior Indebtedness which
is then outstanding; provided, however, that the Company and the Trustee shall
be obligated to notify such a Representative (other than with respect to the
Senior Credit Facilities) only if such Representative has delivered or caused to
be delivered an address for the service of such a notice to the Company and the
Trustee (and the Company and the Trustee shall be obligated only to deliver the
notice to the address so specified). If a notice is required pursuant to the
immediately preceding sentence, the Company may not pay the Securities (except
payment (a) in Qualified Capital Stock issued by the Company to pay interest on
the Securities or issued in exchange for the Securities, (b) in securities
substantially identical to the Securities issued by the Company in payment of
interest accrued thereon or (c) securities issued by the Company which are
subordinated to the Senior Indebtedness at least to the same extent as the
Securities and have a Weighted Average Life to Maturity at least equal to the
remaining Weighted Average Life to Maturity of the Securities), until five
Business Days after the respective Representative of the Designated
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Senior Indebtedness receives notice (at the address specified in the preceding
sentence) of such acceleration and thereafter may pay the Securities only if the
provisions of this Article 7 otherwise permit payment at that time.
Section 7.05 When Distribution Must Be Paid Over. If a distribution is
made to the Trustee or to Holders that because of this Article 7 should not have
been made to them, the Trustee or the Holders who receive such distribution
shall hold it for holders of Senior Indebtedness and promptly pay it over to
them as their respective interests may appear; provided, however, that the
liabilities of the Trustee under this Section 7.05 are limited by Section 7.15.
Section 7.06 Subrogation. After all Senior Indebtedness is paid in full
and until the Securities are paid in full, Holders shall be subrogated to the
rights of holders of Senior Indebtedness to receive distributions applicable to
Senior Indebtedness. A distribution made under this Article 7 to holders of
Senior Indebtedness which otherwise would have been made to Holders is not, as
between the Company and the Holders, a payment by the Company of Senior
Indebtedness.
Section 7.07 Relative Rights. This Article 7 defines the relative
rights of Holders of the Securities on the one hand and holders of Senior
Indebtedness on the other hand. Nothing in this Indenture shall:
(a) impair, as between the Company and the Holders, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Securities in accordance with their terms; or
(b) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Senior Indebtedness to receive distributions otherwise payable to
Holders.
Section 7.08 Subordination May Not Be Impaired by Company. No right of
any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by the failure of the Company to comply with this
Indenture.
Section 7.09 Rights of Trustee and Paying Agent. Notwithstanding
Section 7.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than 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 7. The Company, the Registrar or co-Registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-Registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 7 with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 7 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.07.
Section 7.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
Section 7.11 Article 7 Not To Prevent Events of Default or Limit Right
To Accelerate. The failure to make a payment in respect of the Securities by
reason of any provision in this Article 7 shall not be construed as preventing
the occurrence of a Default or Event of Default. Nothing in this Article 7 shall
have any effect on the right of the Holders or the Trustee to accelerate the
maturity of the Securities.
Section 7.12 Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article 9 by the Trustee for the
payment of principal of and interest on the Securities shall not be subordinated
to the prior payment of any Senior Indebtedness or subject to the restrictions
set forth in this Article 7, and none of the Holders shall be obligated to pay
over any such amount to the Company, any holder of Senior Indebtedness of the
Company, or any other creditor of the Company.
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Section 7.13 Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article 7, the Trustee and the Holders shall be entitled to
rely (a) upon any order or decree of a court of competent jurisdiction in which
any proceedings of the nature referred to in Section 7.02 are pending, (b) 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 (c) upon the
Representatives for the holders of Senior Indebtedness for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 7.
In the event that the Trustee determines, in good faith, that evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 7, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article 7, 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 Trustee shall have the right
to seek a declaratory judgment as to any right of such Person to receive such
payment. The provisions of Sections 8.01 and 8.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 7.
Section 7.14 Trustee To Effectuate Subordination. Each Holder by
accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Holder and the holders of Senior Indebtedness as
provided in this Article 7 and appoints the Trustee as attorney-in-fact for any
and all such purposes.
Section 7.15 Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders or the Company, or any other
Person, money or assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article 7 or otherwise.
Section 7.16 Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Security acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness,
whether such Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness and such holder of Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE 8
TRUSTEE
Section 8.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth herein and no
covenants or obligations shall be implied under this Indenture against
the Trustee; and
(ii) In the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture; provided,
however, that in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine such certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need
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not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein or otherwise verify the contents thereof).
(c) The Trustee shall not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) This paragraph does not limit the effect of
paragraph (b) of this Section 8.01;
(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; and
(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 Sections 6.02, 6.04 and 6.05.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of such
funds is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
8.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 8.02 Rights of Trustee. Subject to Section 8.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate and/or an Opinion of Counsel, which shall
conform to the provisions of Section 13.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence of any
agent or attorney (other than an agent who is an employee of the Trustee)
appointed with due care and appointed with the consent of the Company.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may
consult with counsel and the advice or opinion of such counsel as to matters of
law shall be full and complete authorization and protection from liability in
respect of any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have
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offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be entitled to
examine the books, records and premises of the Company, personally or by agent
or attorney.
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the Securities
and this Indenture.
(j) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.
(k) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its gross negligence or willful
misconduct.
Section 8.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or their Affiliates with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee is subject to Sections 8.10 and 8.11.
Section 8.04 Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company or any Guarantor in this Indenture or any document issued in
connection with the sale of Securities or any statement in the Securities other
than the Trustee's certificate of authentication.
Section 8.05 Notice of Defaults. If a Default or an Event of Default
occurs and is continuing and the Trustee has actual knowledge of such Defaults
or Events of Default, the Trustee shall mail to each Holder notice of the
Default or Event of Default within 30 days after the occurrence thereof. Except
in the case of a Default or an Event of Default in payment of principal of or
interest on any Security or a Default or Event of Default in complying with
Section 5.01, the Trustee may withhold the notice if and so long as a committee
of its Trust Officers in good faith determines that withholding the notice is in
the interest of the Holders. This Section 8.05 shall be in lieu of the proviso
to ss. 315(b) of the TIA and such proviso to ss. 315(b) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
Section 8.06 Reports by Trustee to Holders. If required by TIA ss.
313(a), within 60 days after each June 1 beginning with June 1, 1999, the
Trustee shall mail to each Holder a report dated as of such June 1 that complies
with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b), (c) and
(d).
A copy of each such report at the time of its mailing to
Holders shall be filed with the Commission and each stock exchange, if any, on
which the Securities are listed.
The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or of any delisting thereof.
Section 8.07 Compensation and Indemnity. The Company and the Guarantors
shall pay to the Trustee and the Agents from time to time, and the Trustee and
the Agents shall be entitled to, such compensation as the Company and the
Trustee and the Agents shall from time to time agree in writing for their
respective 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 Guarantors
shall reimburse the Trustee and the Agents upon request for all reasonable
disbursements, expenses and advances, including all costs and expenses of
collection and reasonable fees, disbursements and expenses of its agents and
outside counsel incurred
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or made by any of them in addition to the compensation for their respective
services except any such disbursements, expenses and advances as may be
attributable to negligence or willful misconduct of the party to be reimbursed.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents, accountants, experts and outside counsel and
any taxes or other expenses incurred by a trust created pursuant to Section 9.01
hereof.
The Company and the Guarantors shall indemnify the Trustee and
the Agents for, and hold them harmless against any and all loss, damage, claims,
liability or expense, including taxes (other than franchise taxes imposed on the
indemnified party and taxes based upon, measured by or determined by the income
of the indemnified party), arising out of or in connection with the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of enforcing this Indenture against the Company and the Guarantors
(including this Section 8.07) and the costs and expenses of defending themselves
against or investigating any claim (whether asserted by the Company, any Holder
or any other Person) or liability in connection with the exercise or performance
of any of their powers or duties hereunder, except to the extent that such loss,
damage, claim, liability or expense is due to negligence or willful misconduct
of the indemnified party. The indemnified party shall notify the Company
promptly of any claim asserted against the indemnified party for which it may
seek indemnity. However, the failure by the indemnified party to so notify the
Company shall not relieve the Company and the Guarantors of their obligations
hereunder unless the Company and the Guarantors have been prejudiced thereby.
The Company and the Guarantors shall defend the claim and the indemnified party
shall cooperate in the defense at the expense of the Company and the Guarantors;
provided that the Company and the Guarantors shall not be liable in any action
or for which they have assumed the defense for the expenses of separate counsel
to the indemnified party unless (1) the employment of separate counsel has been
authorized by the Company and the Guarantors, (2) the indemnified party has
reasonably concluded (based upon advice of counsel to the indemnified party)
that there may be legal defenses available to the indemnified party that are
different from or in addition to those available to the Company and the
Guarantors or (3) a conflict or potential conflict exists (based upon advice of
counsel to the indemnified party) between the indemnified party, the Company and
the Guarantors; provided further, however, that in any such event the
reimbursement obligation of the Company and the Guarantors with respect to
separate counsel of the indemnified party will be limited to the reasonable fees
and expenses of such counsel.
The Company and the Guarantors need not pay for any settlement
made without their written consent, which consent shall not be unreasonably
withheld or delayed. The Company and the Guarantors need not reimburse any
expense or indemnify against any loss or liability incurred by the Trustee or an
Agent as a result of its own negligence or willful misconduct.
The Trustee's rights to receive payment of any amount due
under this Section 8.07 shall not be subordinated to any other liability or
indebtedness of the Company or the Guarantors (even though the Securities may be
so subordinated). To secure the payment obligations of the Company and the
Guarantors in this Section 8.07, the Trustee shall have a Lien prior to the
Securities against all money or property held or collected by the Trustee, in
its capacity as Trustee, except money or property held in trust to pay principal
of or interest on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(f) or (g) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law.
Section 8.08 Replacement of Trustee. The Trustee may resign at any time
by so notifying the Company in writing. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by so notifying the
Trustee and the Company in writing and may appoint a successor Trustee with the
Company's consent. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 8.10;
(b) the Trustee is adjudged bankrupt or insolvent or an order
for relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or other public officer takes charge of the
Trustee or its property; or
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(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 8.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 8.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the outstanding
Securities may petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 8.08, the Company's obligations under Section 8.07 shall continue for
the benefit of the retiring Trustee.
Section 8.09 Successor Trustee by Merger, etc. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or banking
corporation, the resulting, surviving or transferee corporation or banking
corporation without any further act shall be the successor Trustee; provided,
however, that such corporation shall be otherwise qualified and eligible under
this Article 8.
Section 8.10 Eligibility; Disqualification. This Indenture shall always
have a Trustee which shall be eligible to act as Trustee under TIA xx.xx.
310(a)(1) and 310(a)(2). The Trustee shall have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition. If the Trustee has or shall acquire any "conflicting interest"
within the meaning of TIA ss. 310(b), the Trustee and the Company shall comply
with the provisions of TIA ss. 310(b); provided, however, that there shall be
excluded from the operation of TIA ss. 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 ss. 310(b)(1) are met. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
8.10, the Trustee shall resign immediately in the manner and with the effect
hereinbefore specified in this Article 8. The provisions of TIA ss. 310 shall
apply to the Company and any other obligor of the Securities.
Section 8.11 Preferential Collection of Claims Against the Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
Section 9.01 Termination of the Company's Obligations. The Company may
terminate its obligations under the Securities and this Indenture as well as the
obligations of the Guarantors under their respective Subsidiary Guarantees,
except those obligations referred to in the penultimate paragraph of this
Section 9.01, if:
(a) either (i) all the Securities theretofore authenticated
and delivered (except lost, stolen or destroyed Securities which have been
replaced or paid and Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from
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such trust) have been delivered to the Trustee for cancellation or (ii) all
Securities not theretofore delivered to the Trustee for cancellation have become
due and payable or have been called for redemption and the Company has
irrevocably deposited or caused to be deposited with the Trustee funds in an
amount sufficient to pay and discharge the entire Indebtedness on the Securities
not theretofore delivered to the Trustee for cancellation, for principal of,
premium, if any, and interest on the Securities to the date of deposit together
with irrevocable instructions from the Company directing the Trustee to apply
such funds to the payment thereof at maturity or redemption, as the case may be;
(b) the Company has paid all other sums payable under this
Indenture by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions precedent
under this Indenture relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the first paragraph of this Section 9.01, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 8.07, 8.08, 9.05
and 9.06 shall survive until the Securities are no longer outstanding pursuant
to Section 2.08. After the Securities are no longer outstanding, the Company's
obligations in Sections 8.07, 8.08, 9.05 and 9.06 shall survive.
After such delivery or irrevocable deposit, the Trustee upon
request shall acknowledge in writing the discharge of the Company's and
Guarantors' obligations under the Securities, the Subsidiary Guarantees and this
Indenture except for those surviving obligations specified above.
Section 9.02 Legal Defeasance and Covenant Defeasance.
(a) The Company may terminate its obligations in respect of
the Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, the
Company may, at its option, at any time elect to have either paragraph (b) or
(c) below be applied to all outstanding Securities, subject in either case to
compliance with the conditions set forth in Section 9.03.
(b) Upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (b), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be deemed to have paid
and discharged the entire indebtedness represented by the outstanding
Securities, except for (i) the rights of Holders to receive payments in respect
of the principal of, premium, if any, and interest on the Securities when such
payments are due, (ii) the Company's obligations with respect to the Securities
under Sections 2.03 through 2.07, inclusive, and 4.02, (iii) the rights, powers,
trust, duties and immunities of the Trustee under this Indenture and the
Company's obligations in connection therewith and (iv) Article 9 of this
Indenture (hereinafter, "Legal Defeasance"). Subject to compliance with this
Article 9, the Company may exercise its option under this paragraph (b)
notwithstanding the prior exercise of its option under paragraph (c) hereof.
(c) Upon the Company's exercise under paragraph (a) hereof of
the option applicable to this paragraph (c), the Company shall, subject to the
satisfaction of the conditions set forth in Section 9.03, be released from its
obligations under Sections 4.03 through 4.15, inclusive, 4.18 and Article 5 with
respect to the outstanding Securities (hereinafter, "Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or an Event of Default with respect to the Securities.
Section 9.03 Conditions to Legal Defeasance or Covenant Defeasance. In
order to exercise either Legal Defeasance pursuant to Section 9.02(b) or
Covenant Defeasance pursuant to Section 9.02(c):
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in U.S. dollars or United States
Government Obligations, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of, premium, if any, and interest on the
Securities on the stated date for payment thereof or on the applicable
redemption date, as the case may be;
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(b) in the case of an election under Section 9.02(b), the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming 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 Holders of the
Securities will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal 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 Legal Defeasance had not occurred;
(c) in the case of an election under Section 9.02(c), the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
Securities 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit) or insofar
as Sections 6.01(f) and 6.01(g) are concerned, at any time in the period ending
on the 91st day after the date of such deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of or constitute a Default under this Indenture
or any other material agreement or instrument to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound;
(f) the Company shall have delivered 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 or others;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with; and
(h) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that assuming no intervening bankruptcy or insolvency
of the Company between the date of deposit and the 91st day following the
deposit and that no Holder is an insider of the Company, after the 91st day
following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar law affecting
creditors' rights generally.
Notwithstanding the foregoing, the Opinion of Counsel required
by clause (b) above need not be delivered if all Securities not theretofore
delivered to the Trustee for cancellation (x) have become due and payable, (y)
will become due and payable on the Final Maturity Date within one year or (z)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
Section 9.04 Application of Trust Money; Trustee Acknowledgment and
Indemnity. The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.03, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of, premium,
if any, and interest on the Securities.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities and this Indenture except for those surviving obligations specified
above.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the United States
Government Obligations deposited pursuant to Section 9.03 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
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Section 9.05 Repayment to Company. Subject to Sections 8.07 and 9.04,
the Trustee shall promptly pay to the Company upon written request any excess
money held by it at any time. The Trustee shall pay to the Company upon written
request any money held by it for the payment of principal or interest that
remains unclaimed for two years; provided, however, that the Trustee before
being required to make any payment may at the expense of the Company cause to be
published once in a newspaper of general circulation in The City of New York or
mail to each Holder entitled to such money notice that such money remains
unclaimed and that, after a date specified therein which shall be at least 30
days from the date of such publication or mailing, any unclaimed balance of such
money then remaining shall be repaid to the Company. After payment to the
Company, Holders entitled to money must look solely to the Company for payment
as general creditors unless an applicable abandoned property law designates
another person and all liability of the Trustee or Paying Agent with respect to
such money shall thereupon cease.
Section 9.06 Reinstatement. If the Trustee is unable to apply any money
or United States Government Obligations in accordance with Section 9.02 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.02 until such time as the Trustee is permitted to apply
all such money or United States Government Obligations in accordance with
Section 9.02; provided, however, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.
ARTICLE 10
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 10.01 Without Consent of Holders. The Company and the
Guarantors, when authorized by a resolution of the Board of Directors, and the
Trustee may amend or supplement this Indenture or the Securities without notice
to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the rights
of any Holder in any material respect;
(b) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in connection
with any transaction complying with Article 5 of this Indenture;
(c) to provide for uncertificated Securities in addition to or
in place of certificated Securities;
(d) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional
benefit or rights to the Holders;
(f) to make any other change that does not adversely affect
the rights of any Holder under this Indenture;
(g) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon the
Company;
(h) to reflect the release of a Guarantor from its obligations
with respect to its Guarantee in accordance with the provisions of Section 11.03
and to add a Guarantor pursuant to the requirements of Section 4.13; or
(i) to secure the Securities pursuant to the requirements of
Section 4.15 or otherwise;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
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Section 10.02 With Consent of Holders. Subject to Section 6.07, the
Company and the Guarantors, when authorized by a Board Resolution, and the
Trustee may modify, amend or supplement, or waive compliance by the Company with
any provision of, this Indenture or the Securities with the written consent of
the Holders of at least a majority in principal amount of the outstanding
Securities. However, without the consent of each Holder affected, no such
modification, amendment, supplement or waiver, including a waiver pursuant to
Section 6.04, may:
(a) [reserved];
(b) reduce the principal amount of or change the Stated
Maturity of any Security or alter the provisions with respect to the repurchase
or redemption of the Securities (other than provisions relating to Section 4.08
or 4.14);
(c) reduce the rate of or change the time for payment of
interest on any Security;
(d) make any Security payable in money other than that stated
in the Securities;
(e) make any change in the provisions of this Indenture
relating to the rights of Holders of Securities to receive payments of principal
of or premium, if any, or interest on the Securities;
(f) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07 or this
Section 10.02 (other than to add sections of this Indenture or the Securities
which may not be modified, amended, supplemented or waived without the consent
of each Holder affected);
(g) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of compliance with
any provision of this Indenture or the Securities or for waiver of any Default
in respect thereof;
(h) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Securities (except a
rescission of acceleration of the Securities by the Holders thereof as provided
in Section 6.02 and a waiver of the payment default that resulted from such
acceleration);
(i) waive a mandatory repurchase or redemption payment with
respect to any Security required by Section 4.08 or 4.14; or
(j) modify the ranking or priority of any Security or the
Subsidiary Guarantee in respect thereof of any Guarantor in any manner adverse
to the Holders of the Securities.
It shall not be necessary for the consent of the Holders under
this Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
10.02 becomes effective, the Company shall mail to the Holders affected thereby
a notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
Section 10.03 Compliance with Trust Indenture Act. Every amendment to
or supplement of this Indenture or the Securities shall comply with the TIA as
then in effect.
Section 10.04 Record Date for Consents and Effect of Consents. The
Company may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders of Securities entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then those persons who were
Holders of Securities at such record date (or their duly designated proxies),
and only those persons, shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given, whether or not
such persons continue to be Holders of such Securities after such
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record date. No such consent shall be valid or effective for more than 90 days
after such record date. The Trustee is entitled to rely upon any electronic
instruction from beneficial owners to the Holders of any Global Security.
After an amendment, supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of clauses
(a) through (j) of Section 10.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
Section 10.05 Notation on or Exchange of Securities. If an amendment,
supplement or waiver changes the terms of a Security, the Trustee may require
the Holder of the Security to deliver it to the Trustee. The Trustee may place
an appropriate notation on the Security about the changed terms and return it to
the Holder. Alternatively, if the Company or the Trustee so determine, the
Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure to make the
appropriate notation or issue a new Security shall not affect the validity and
effect of such amendment, supplement or waiver.
Section 10.06 Trustee To Sign Amendments, etc. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article 10 is authorized or permitted by this
Indenture, complies with Section 10.03 and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms (subject to customary exceptions). The
Trustee may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.01 Unconditional Guarantee. Each Guarantor hereby
unconditionally, jointly and severally, guarantees (each, a "Subsidiary
Guarantee") to each Holder of a Security authenticated by the Trustee and to the
Trustee and its successors and assigns that: the principal of and interest on
the Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, and interest on
the overdue principal and interest on any overdue interest on the Securities and
all other obligations of the Company to the Holders or the Trustee hereunder or
under the Securities will be promptly paid in full or performed, all in
accordance with the terms hereof and thereof; subject, however, to the
limitations set forth in Section 11.04. Each Guarantor hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Securities or this Indenture, the absence of
any action to enforce the same, any waiver or consent by any Holder of the
Securities with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Guarantor. Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that the
Subsidiary Guarantee will not be discharged except by complete performance of
the obligations contained in the Securities, this Indenture and this Subsidiary
Guarantee. If any Holder or the Trustee is required by any court or otherwise to
return to the Company, any Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or any Guarantor, any
amount paid by the Company or any Guarantor to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(a) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article 6 for the purpose of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (b) in the
event of any acceleration of such obligations as provided in Article 6, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Guarantor for the purpose of this Subsidiary Guarantee.
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Section 11.02 Severability. In case any provision of this Subsidiary
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 11.03 Release of a Guarantor.
(a) If the Securities are defeased in accordance with the
terms of this Indenture, or if Section 5.01(b) is complied with, or if, subject
to the requirements of Section 5.01(a), all or substantially all of the assets
of any Guarantor or all of the equity interest in any Guarantor are sold
(including through merger, consolidation, by issuance or otherwise) by the
Company in a transaction constituting an Asset Sale, and if (i) the Net Cash
Proceeds from such Asset Sale are used in accordance with Section 4.08 or (ii)
the Company delivers to the Trustee an Officers' Certificate to the effect that
the Net Cash Proceeds from such Asset Sale shall be used in accordance with
Section 4.08 and within the time limits specified by Section 4.08, then each
Guarantor (in the case of defeasance) or such Guarantor (in the case of
compliance with Section 5.01(b) or in the event of a sale or other disposition
of all of the equity interests of such Guarantor) or the Person acquiring such
assets (in the event of a sale or other disposition of all or substantially all
of the assets of such Guarantor) shall be released and discharged from all
obligations under this Article 11 without any further action required on the
part of the Trustee or any Holder. The Trustee shall, at the sole cost and
expense of the Company and upon receipt at the reasonable request of the Trustee
of an Opinion of Counsel that the provisions of this Section 11.03 have been
complied with, deliver an appropriate instrument evidencing such release upon
receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 11.03. Any Guarantor not so
released remains liable for the full amount of principal of and interest on the
Securities and the other obligations of the Company hereunder as provided in
this Article 11.
(b) Any Guarantor that is designated an Unrestricted
Subsidiary shall upon such designation be released and discharged of all
obligations under this Article 11 without any further action required on the
part of the Trustee or any Holder.
Section 11.04 Limitation of Guarantor's Liability. Each Guarantor, and
by its acceptance hereof each Holder and the Trustee, hereby confirms that it is
the intention of all such parties that the Guarantee by such Guarantor pursuant
to its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance
for purposes of title 11 of the United States Code, as amended, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
U.S. Federal or state or other applicable law. To effectuate the foregoing
intention, the Holders and each Guarantor hereby irrevocably agree that the
obligations of each Guarantor under its Subsidiary Guarantee shall be limited to
the maximum amount as will, after giving effect to all other contingent and
fixed liabilities of such Guarantor and after giving effect to any collections
from or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under its Subsidiary Guarantee or pursuant
to Section 11.05, result in the obligations of such Guarantor under its
Subsidiary Guarantee not constituting such a fraudulent transfer or conveyance.
Section 11.05 Contribution. In order to provide for just and equitable
contribution among the Guarantors, the Guarantors agree, inter se, that in the
event any payment or distribution is made by any Guarantor (a "Funding
Guarantor") under the Subsidiary Guarantee, such Funding Guarantor shall be
entitled to a contribution from all other Guarantors in a pro rata amount, based
on the net assets of each Guarantor (including the Funding Guarantor),
determined in accordance with GAAP, subject to Section 11.04, for all payments,
damages and expenses incurred by such Funding Guarantor in discharging the
Company's obligations with respect to the Securities or any other Guarantor's
obligations with respect to the Subsidiary Guarantee.
Section 11.06 Execution of Subsidiary Guarantee. To further evidence
their Guarantee to the Holders, each of the Guarantors hereby agree to execute a
Subsidiary Guarantee to be endorsed on each Security ordered to be authenticated
and delivered by the Trustee. Each Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Security a Subsidiary Guarantee.
Each such Subsidiary Guarantee shall be signed on behalf of each Guarantor by
its Chairman of the Board, its President or one of its Vice Presidents prior to
the authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Subsidiary Guarantee on behalf of such
Guarantor. Such signature upon the Subsidiary Guarantee may be manual or
facsimile signature of such
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officer and may be imprinted or otherwise reproduced on the Subsidiary
Guarantee, and in case such officer who shall have signed the Subsidiary
Guarantee shall cease to be such officer before the Security on which such
Subsidiary Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Security nevertheless may be
authenticated and delivered or disposed of as though the Person who signed the
Subsidiary Guarantee had not ceased to be such officer of such Guarantor.
Section 11.07 Subordination of Subrogation and Other Rights. Each
Guarantor hereby agrees that any claim against the Company that arises from the
payment, performance or enforcement of such Guarantor's obligations under its
Subsidiary Guarantee or this Indenture, including, without limitation, any right
of subrogation, shall be subject and subordinate to, and no payment with respect
to any such claim of such Guarantor shall be made before, the payment in full in
cash of all outstanding Securities in accordance with the provisions provided
therefor in this Indenture.
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTEE
Section 12.01 Agreement To Subordinate. Each Guarantor agrees, and each
Holder by accepting a Subsidiary Guarantee agrees, that the Indebtedness of such
Guarantor evidenced by the Subsidiary Guarantee is subordinated in right of
payment, to the extent and in the manner provided in this Article 12, to the
payment when due of all Guarantor Senior Indebtedness of such Guarantor and that
such subordination is for the benefit of and enforceable by the holders of
Guarantor Senior Indebtedness. The Subsidiary Guarantee shall in all respects
rank pari passu with all other Guarantor Senior Subordinated Indebtedness of a
Guarantor, and only Indebtedness of a Guarantor which is Guarantor Senior
Indebtedness will rank senior to the Subsidiary Guarantee in accordance with the
provisions set forth herein. Unsecured Indebtedness is not deemed to be
subordinate or junior to Secured Indebtedness merely because it is unsecured,
nor is any Indebtedness deemed to be subordinate or junior to other Indebtedness
merely because it matures after such other Indebtedness. Secured Indebtedness is
not deemed to be Senior Indebtedness merely because it is secured. All
provisions of this Article 12 shall be subject to Section 12.12.
Section 12.02 Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of a Guarantor upon a total or partial liquidation or
dissolution or reorganization or bankruptcy of or similar proceeding relating to
a Guarantor or its property:
(a) holders of Guarantor Senior Indebtedness of such Guarantor
shall be entitled to receive payment in full in cash or Cash Equivalents of all
Guarantor Senior Indebtedness of such Guarantor before Holders shall be entitled
to receive any payment of principal of or interest on or other amounts with
respect to the Securities from such Guarantor; and
(b) until the Guarantor Senior Indebtedness of such Guarantor
is paid in full, any payment or distribution to which Holders would be entitled
but for the provisions of this Article 12 shall be made to holders of Guarantor
Senior Indebtedness as their interests may appear.
Section 12.03 Default on Guarantor Senior Indebtedness. No Guarantor
may pay the principal of, premium (if any), or interest on, and other
obligations with respect to, the Securities or make any deposit pursuant to
Section 9.03 or repurchase, redeem or otherwise retire any Securities
(collectively, "pay the Securities") if (a) any Guarantor Senior Indebtedness is
not paid in cash or Cash Equivalents when due or (b) any other default on
Guarantor Senior Indebtedness occurs and the maturity of such Guarantor Senior
Indebtedness is accelerated in accordance with its terms unless, in either case,
(i) the default has been cured or waived or is no longer continuing and/or any
such acceleration has been rescinded or (ii) such Guarantor Senior Indebtedness
has been paid in full; provided, however, that the Guarantor may pay the
Securities subject to the provisions of Section 12.02, without regard to the
foregoing if the Guarantor and the Trustee receive written notice approving such
payment from the Representatives of the Senior Indebtedness with respect to
which either of the events set forth in clause (a) or (b) of this sentence has
occurred or is continuing. During the continuance of any default (other than a
default described in clause (a) or (b) of the preceding sentence) with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, a Guarantor may not
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pay the Securities (except (A) in Qualified Capital Stock issued by such
Guarantor to pay interest on the Securities or issued in exchange for the
Securities, (B) in securities substantially identical to the Securities issued
by such Guarantor in payment of interest accrued thereon or (C) in securities
issued by such Guarantor which are subordinated to the Guarantor Senior
Indebtedness at least to the same extent as the Securities and having a Weighted
Average Life to Maturity at least equal to the remaining Weighted Average Life
to Maturity of the Securities) for a period (a "Guarantor Payment Blockage
Period") commencing upon the receipt by the Trustee (with a copy to the
Guarantor) of written notice (a "Guarantor Blockage Notice") of such default
from the Representative of the holders of such Designated Senior Indebtedness
specifying an election to effect a Guarantor Payment Blockage Period and ending
179 days thereafter (or earlier if such Guarantor Payment Blockage Period is
terminated (1) by written notice to the Trustee and the Guarantor from the
Person or Persons who gave such Guarantor Blockage Notice, (2) because the
default giving rise to such Guarantor Blockage Notice is no longer continuing)
or (3) because such Designated Senior Indebtedness has been repaid in full.
Notwithstanding the provisions of the immediately preceding sentence, but
subject to the provisions of the first sentence of this Section 12.03 and the
provisions of Section 12.02, the Guarantor may resume payments on the Securities
after the end of such Payment Blockage Period. Not more than one Blockage Notice
may be given, and not more than one Payment Blockage Period may occur, in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness during such period. However, if any Blockage
Notice within such 360-day period is given by or on behalf of any holders of
Designated Senior Indebtedness (other than the agent under the Senior Credit
Facilities), the agent under the Senior Credit Facilities may give another
Blockage Notice within such period. In no event, however, may the total number
of days during which any Payment Blockage Period or Payment Blockage Periods are
in effect exceed 179 days in the aggregate during any 360 consecutive day
period. No nonpayment default that existed or was continuing on the date of
delivery of any Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Blockage Notice unless such default shall have been cured or
waived for a period of not less than 90 consecutive days.
Section 12.04 Acceleration of Payment of Securities. If a notice is
required pursuant to the first sentence of Section 7.04, no Guarantor may pay
the Securities (except payment (a) in Qualified Capital Stock issued by the
Guarantor to pay interest on the Securities or issued in exchange for the
Securities, (b) in securities substantially identical to the Securities issued
by the Guarantor in payment of interest accrued thereon or (c) securities issued
by the Guarantor which are subordinated to the Guarantor Senior Indebtedness at
least to the same extent as the Securities and have a Weighted Average Life to
Maturity at least equal to the remaining Weighted Average Life to Maturity of
the Securities), until five Business Days after the respective Representative of
the Designated Senior Indebtedness receives notice (at the address specified in
the preceding sentence) of such acceleration and thereafter, may pay the
Securities only if the provisions of this Article 12 otherwise permit payment at
that time.
Section 12.05 When Distribution Must Be Paid Over. If a distribution is
made to the Trustee or to Holders that because of this Article 12 should not
have been made to them, the Trustee or the Holders who receive such distribution
shall hold it for holders of Guarantor Senior Indebtedness and promptly pay it
over to them as their respective interests may appear; provided, however, that
the liabilities of the Trustee under this Section 12.05 are limited by Section
12.15.
Section 12.06 Subrogation. After all Guarantor Senior Indebtedness is
paid in full and until the Securities are paid in full, Holders shall be
subrogated to the rights of holders of Guarantor Senior Indebtedness to receive
distributions applicable to Guarantor Senior Indebtedness. A distribution made
under this Article 12 to holders of Guarantor Senior Indebtedness which
otherwise would have been made to Holders is not, as between the Guarantor and
the Holders, a payment by any Guarantor of Guarantor Senior Indebtedness.
Section 12.07 Relative Rights. This Article 12 defines the relative
rights of Holders of the Securities on the one hand and holders of Guarantor
Senior Indebtedness on the other hand. Nothing in this Indenture shall:
(a) impair, as between the Guarantor and the Holders, the
obligations of any Guarantor, which are absolute and unconditional, in respect
of its Subsidiary Guarantee; or
(b) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders of Guarantor Senior Indebtedness to receive distributions otherwise
payable to Holders.
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Section 12.08 Subordination May Not Be Impaired by Guarantor. No right
of any holder of Guarantor Senior Indebtedness to enforce the subordination of
the obligations under any Subsidiary Guarantee evidenced by the Securities shall
be impaired by any act or failure to act by any Guarantor or by the failure of
any Guarantor to comply with this Indenture.
Section 12.09 Rights of Trustee and Paying Agent. Notwithstanding
Section 12.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than 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 12. A Guarantor, the Registrar or co-Registrar, the Paying Agent, a
Representative or a holder of Guarantor Senior Indebtedness may give the notice;
provided, however, that if an issue of Guarantor Senior Indebtedness has a
Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold
Guarantor Senior Indebtedness with the same rights it would have if it were not
Trustee. The Registrar and co-Registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 12 with respect to any Guarantor Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Guarantor
Senior Indebtedness; and nothing in Article 12 shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article 12 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 8.07.
Section 12.10 Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Guarantor Senior
Indebtedness, the distribution may be made and the notice given to their
Representative, if any.
Section 12.11 Article 12 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment in respect of the Securities
by reason of any provision in this Article 12 shall not be construed as
preventing the occurrence of a Default or Event of Default. Nothing in this
Article 12 shall have any effect on the right of the Holders or the Trustee to
enforce any Subsidiary Guarantee or to accelerate the maturity of the
Securities.
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 8 by the Trustee for payment
in respect of the Subsidiary Guarantees shall not be subordinated to the prior
payment of any Guarantor Senior Indebtedness or subject to the restrictions set
forth in this Article 12, and none of the Holders shall be obligated to pay over
any such amount to such Guarantor, any holder of Guarantor Senior Indebtedness
of such Guarantor, or any other creditor of such Guarantor.
Section 12.13 Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 12, the Trustee and the Holders shall be
entitled to rely (a) 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, (b) 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
(c) upon the Representatives for the holders of Guarantor Senior Indebtedness
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of Guarantor Senior Indebtedness and other
Indebtedness of any Guarantor, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 12. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 12, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article 12, 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 Trustee shall have the right to seek a declaratory judgment as to
any right of such Person to receive such payment. The provisions of Sections
8.01 and 8.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 12.
Section 12.14 Trustee To Effectuate Subordination. Each Holder by
accepting a Subsidiary Guarantee authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
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effectuate the subordination between the Holder and the holders of Guarantor
Senior Indebtedness as provided in this Article 12 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 12.15 Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Guarantor Senior Indebtedness and shall not be liable to any such
holders if it shall mistakenly pay over or distribute to Holders or the
Guarantor, or any other Person, money or assets to which any holders of
Guarantor Senior Indebtedness shall be entitled by virtue of this Article 12 or
otherwise.
Section 12.16 Reliance by Holders of Guarantor Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Subsidiary Guarantee
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any
Guarantor Senior Indebtedness, whether such Guarantor Senior Indebtedness was
created or acquired before or after the issuance of the Subsidiary Guarantee, to
acquire and continue to hold, or to continue to hold, such Guarantor Senior
Indebtedness and such holder of Guarantor Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Guarantor Senior
Indebtedness.
ARTICLE 13
MISCELLANEOUS
Section 13.01 Trust Indenture Act Controls. This Indenture is subject
to the provisions of the TIA that are required to be a part of this Indenture,
and shall, to the extent applicable, be governed by such provisions. If any
provision of this Indenture modifies any TIA provision that may be so modified,
such TIA provision shall be deemed to apply to this Indenture as so modified. If
any provision of this Indenture excludes any TIA provision that may be so
excluded, such TIA provision shall be excluded from this Indenture.
The provisions of TIA xx.xx. 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
Section 13.02 Notices. Any notice or communication shall be
sufficiently given if in writing and delivered in person, by facsimile and
confirmed by overnight courier, or mailed by first-class mail addressed as
follows:
if to the Company:
Home Interiors & Gifts, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
Copy to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx X. Xxxxxx, Xx.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
if to the Trustee:
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(a) for payment, registration, transfer, exchange and tender
of the Securities:
By Hand:
United States Trust Company of New York
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Window Lower Level
By Mail:
United States Trust Company of New York
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Services
Telephone No.: (000) 000-0000
(b) for all other communications relating to the Securities:
United States Trust Company of New York
Attention: Corporate Trust Administration - Home Interiors
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed, first-class, postage
prepaid, to a Holder including any notice delivered in connection with TIA ss.
310(b), TIA ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be mailed to
him at his address as set forth on the Security register and shall be
sufficiently given to him if so mailed within the time prescribed. To the extent
required by the TIA, any notice or communication shall also be mailed to any
Person described in TIA ss. 313(c).
Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other Holders.
Except for a notice to the Trustee, which is deemed given only when received, if
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 13.03 Communications by Holders with Other Holders. Holders may
communicate pursuant to TIA ss. 312(b) with other Holders with respect to their
rights under this Indenture or the Securities. The Company, the Trustee, the
Registrar and any other person shall have the protection of TIA ss. 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the Trustee
at the request of the Trustee:
(a) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the signers, all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with; and
(b) an Opinion of Counsel in form and substance satisfactory
to the Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate or
certificates of public officials.
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Section 13.05 Statements Required in Certificate. Each certificate with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:
(a) a statement that the person making such certificate has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements contained in such
certificate are based;
(c) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 13.06 Rules by Trustee, Paying Agent, Registrar. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.
Section 13.07 Governing Law. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE, THE SECURITIES AND THE SUBSIDIARY GUARANTEES WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
Section 13.08 No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Securities or the Subsidiary Guarantees, as the case may be, or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Security and the
Subsidiary Guarantees waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and the
Subsidiary Guarantees.
Section 13.09 Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successor. All agreements of each
Guarantor in this Indenture shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 13.10 Counterpart Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
Section 13.11 Severability. In case any provision in this Indenture, in
the Securities or in the Subsidiary Guarantees shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby, and a Holder
shall have no claim therefor against any party hereto.
Section 13.12 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or a Subsidiary of the Company. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 13.13 Legal Holidays. If a payment date is not a Business Day
at a place of payment, payment may be made at that place on the next succeeding
Business Day.
[Remainder of page intentionally left blank]
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the date first written above.
HOME INTERIORS & GIFTS, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
Chief Executive Officer
GUARANTORS:
DALLAS WOODCRAFT, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
Executive Vice President
GIA, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
Executive Vice President
HOMCO, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
Executive Vice President
HOMCO PUERTO RICO, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
President
SPRING VALLEY SCENTS, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxx, Xx.
President
Signature Page 1 of 2
61
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Signature Page 2 of 2
62
EXHIBIT A
[FORM OF SERIES A SECURITY]
THIS SECURITY AND THE GUARANTEES HEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO (A)
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY (1) TO THE COMPANY, (2)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS
THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 904 UNDER THE SECURITIES ACT, (5) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, OR (6) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT IN EACH OF THE
FOREGOING CASES TO APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THAT IT WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
A-1
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HOME INTERIORS & GIFTS, INC.
10 1/8% Series A Senior Subordinated Note due 2008
CUSIP No.:[ ]
No. [ ] $[ ]
HOME INTERIORS & GIFTS, INC., a Texas corporation (the "Company," which
term includes any successor corporation), for value received, promise to pay to
[ ] or registered assigns the principal sum of [ ] Dollars, on June 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on December
1, 1998.
Interest Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
HOME INTERIORS & GIFTS, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Dated: June 4, 1998
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 1/8% Series A Senior Subordinated Notes due 2008
described in the within-mentioned Indenture.
Dated: June 4, 0000
XXXXXX XXXXXX TRUST COMPANY OF
NEW YORK, as Trustee
By:
----------------------------------
Authorized Signatory
A-2
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(REVERSE OF SECURITY)
HOME INTERIORS & GIFTS, INC.
10 1/8% Series A Senior Subordinated Note due 2008
1. Interest.
HOME INTERIORS & GIFTS, INC. promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from June 4, 1998. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
December 1, 1998. 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 from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities 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 wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by 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, United States Trust Company of New York (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company may, subject to certain
exceptions, act as Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of June
4, 1998 (the "Indenture"), by and among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 10 1/8% Series A
Senior Subordinated Notes due 2008 (the "Initial Securities"), limited in
aggregate principal amount to $200,000,000, which may be issued under the
Indenture. The Securities include the Initial Securities and the Unrestricted
Securities (as defined in the Indenture). All Securities issued under the
Indenture are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
sections 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture
(except as otherwise indicated in the Indenture) until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of them. The Securities
are general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company to the extent and in the manner provided in the Indenture. Each
Holder of a Security, by accepting a Security, agrees to such subordination,
authorizes the Trustee to give effect to such subordination and appoints the
Trustee as attorney-in-fact for such purpose.
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5. Optional Redemption.
(a) The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after June 1, 2003, at the redemption prices
(expressed as a percentage of principal amount) set forth below, plus accrued
and unpaid interest thereon, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date) if redeemed during the
12-month period commencing on June 1 of the years indicated below:
Year Percentage
---- ----------
2003 105.063%
2004 103.375%
2005 101.688%
2006 and thereafter 100.000%
(b) Prior to June 1, 2001, the Company may, at its option, use the net
cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Securities at a redemption price equal to 110.125% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
redemption date; provided, however, that after any such redemption, at least 65%
of the aggregate principal amount of the Securities originally issued would
remain outstanding immediately after giving effect to such redemption. Any such
redemption will be required to occur on or prior to the date that is one year
after the receipt by the Company of the proceeds of each such Equity Offering.
The Company shall effect such redemption on a pro rata basis.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
7. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, be required to offer to purchase all
Securities then outstanding at a purchase price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of such purchase (subject to the right of Holders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date).
8. Limitation on Disposition of Assets.
The Company is, subject to certain conditions and certain exceptions,
obligated to offer to purchase the Securities at a purchase price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of such purchase (subject to the right of Holders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Record Date) with the proceeds of certain asset dispositions.
9. Denominations; Transfer; Exchange.
A-4
66
The Securities 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 Securities in accordance with 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 any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at their written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their obligations
under the Indenture, the Securities and the Subsidiary Guarantees, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Subsidiary Guarantees, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities
(including the Subsidiary Guarantees) may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Securities and the Subsidiary Guarantees
to, among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to sell assets, to permit
restrictions on dividends and other payments by Subsidiaries to the Company, to
consolidate, merge or sell all or substantially all of its assets and to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions.
The Company must report annually to the Trustee on compliance with such
limitations.
15. 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 Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Subsidiary Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Subsidiary Guarantees unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
X-0
00
00. Trustee Dealings with Company and Guarantors.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and the
Subsidiary Guarantees.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
21. Registration Rights.
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors will be obligated to consummate an exchange offer pursuant to which
the Holder of this Security shall have the right to exchange this Security for a
101/8% Series B Senior Subordinated Note due 2008 of the Company which has been
registered under the Securities Act, in like principal amount and having terms
identical in all material respects to the Initial Securities. The Holders shall
be entitled to receive certain liquidated damages payments in the event 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.
22. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee hereof without regard to principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
A-6
68
[FORM OF SUBSIDIARY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Each undersigned Guarantor (as defined in the Indenture referred to in
the Security upon which this notation is endorsed) hereby unconditionally
guarantees on a senior subordinated basis (such guaranty by such Guarantor being
referred to herein as the "Subsidiary Guarantee"), jointly and severally, the
due and punctual payment of the principal of, premium, if any, and interest on
the Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal, premium and interest on
the Securities, 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 11 of the Indenture.
The obligations of each undersigned Guarantor to the Holders of
Securities and to the Trustee pursuant to its Guarantee and the Indenture are
expressly set forth in, and are expressly subordinated and subject in right of
payment to, the prior payment in full of all Guarantor Senior Indebtedness (as
defined in the Indenture) of such Guarantor, to the extent and in the manner
provided in Article 11 and Article 12 of the Indenture, and reference is hereby
made to such Indenture for the precise terms of such Guarantee therein made.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Subsidiary Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Subsidiary Guarantee is subject to release upon the terms set
forth in the Indenture.
DALLAS WOODCRAFT, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, Xx.
Executive Vice President
GIA, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, Xx.
Executive Vice President
HOMCO, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, Xx.
Executive Vice President
A-7
69
HOMCO PUERTO RICO, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, Xx.
President
SPRING VALLEY SCENTS, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, Xx.
President
A-8
70
ASSIGNMENT FORM
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
-------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
-------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
---------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
A-9
71
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08 or Section 4.14 of the Indenture, check the appropriate
box:
Section 4.08 [ ] Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated: Your Signature:
-------------------- ----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
---------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
A-10
72
EXHIBIT B
[FORM OF SERIES B SECURITY]
HOME INTERIORS & GIFTS, INC.
10 1/8% SERIES B SENIOR SUBORDINATED NOTE DUE 2008
CUSIP No.:[ ]
No. [ ] $[ ]
HOME INTERIORS & GIFTS, INC., a Texas corporation (the "Company," which
term includes any successor corporation), for value received, promise to pay to
[ ] or registered assigns the principal sum of [ ] Dollars, on June 1, 2008.
Interest Payment Dates: June 1 and December 1, commencing on December
1, 1998.
Interest Record Dates: May 15 and November 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
HOME INTERIORS & GIFTS, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Dated:
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 10 1/8% Series B Senior Subordinated Notes due 2008
described in the within-mentioned Indenture.
Dated:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:
------------------------------------
Authorized Signatory
B-1
73
(REVERSE OF SECURITY)
HOME INTERIORS & GIFTS, INC.
10 1/8% SERIES B SENIOR SUBORDINATED NOTE DUE 2008
1. Interest.
HOME INTERIORS & GIFTS, INC. promises to pay interest on the principal
amount of this Security at the rate per annum shown above. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from June 4, 1998. The Company will pay
interest semi-annually in arrears on each Interest Payment Date, commencing on
December 1, 1998. 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 from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities 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 wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by 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, United States Trust Company of New York (the "Trustee") will
act as Paying Agent and Registrar. The Company may change any Paying Agent or
Registrar without notice to the Holders. The Company may, subject to certain
exceptions, act as Registrar.
4. Indenture.
The Company issued the Securities under an Indenture, dated as of June
4, 1998 (the "Indenture"), by and among the Company, the Guarantors named
therein and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. This Security is one of a duly
authorized issue of Securities of the Company designated as its 101/8% Series B
Senior Subordinated Notes due 2008 limited in aggregate principal amount to
$200,000,000, which may be issued under the Indenture. The Securities include
the Initial Securities (as defined in the Indenture) and the Unrestricted
Securities (as defined in the Indenture). All Securities issued under the
Indenture are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
xx.xx. 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture
(except as otherwise indicated in the Indenture) until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of them. The Securities
are general unsecured obligations of the Company. The Securities are
subordinated in right of payment to all existing and future Senior Indebtedness
of the Company to the extent and in the manner provided in the Indenture. Each
Holder, by accepting a Security, agrees to such subordination, authorizes the
Trustee to give effect to such subordination and appoints the Trustee as
attorney-in-fact for such purpose.
B-2
74
5. Optional Redemption.
(a) The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after June 1, 2003, at the redemption prices
(expressed as a percentage of principal amount) set forth below, plus accrued
and unpaid interest thereon, if any, to the Redemption Date (subject to the
right of Holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date) if redeemed during the
12-month period commencing on June 1 of the years indicated below:
Year Percentage
---- ----------
2003 105.063%
2004 103.375%
2005 101.688%
2006 and thereafter 100.000%
(b) Prior to June 1, 2001, the Company may, at its option, use the net
cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Securities at a redemption price equal to 110.125% of
the principal amount thereof plus accrued and unpaid interest, if any, to the
redemption date; provided, however, that after any such redemption, at least 65%
of the aggregate principal amount of the Securities originally issued would
remain outstanding immediately after giving effect to such redemption. Any such
redemption will be required to occur on or prior to the date that is one year
after the receipt by the Company of the proceeds of each such Equity Offering.
The Company shall effect such redemption on a pro rata basis.
6. Notice of Redemption.
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
7. Change of Control Offer.
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 30
days after the Change of Control Date, offer to purchase all Securities then
outstanding at a purchase price in cash equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the date of
such purchase (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
8. Limitation on Disposition of Assets.
The Company is, subject to certain conditions and certain exceptions,
obligated to offer to purchase the Securities at a purchase price equal to 100%
of the principal amount thereof, plus accrued and unpaid interest thereon, if
any, to the date of such purchase (subject to the right of Holders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date) with the proceeds of certain asset dispositions.
9. Denominations; Transfer; Exchange.
B-3
75
The Securities 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 Securities in accordance with 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 any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
10. Persons Deemed Owners.
The registered Holder of a Security shall be treated as the owner of it
for all purposes.
11. Unclaimed Funds.
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at their written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
12. Legal Defeasance and Covenant Defeasance.
The Company and the Guarantors may be discharged from their obligations
under the Indenture, the Securities and the Subsidiary Guarantees, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Subsidiary Guarantees, in each case upon satisfaction of certain conditions
specified in the Indenture.
13. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture and the Securities
(including the Subsidiary Guarantees) may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Securities then outstanding, and any existing Default or Event of
Default or compliance with any provision may be waived with the consent of the
Holders of a majority in aggregate principal amount of the Securities then
outstanding. Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Securities and the Subsidiary Guarantees
to, among other things, cure any ambiguity, defect or inconsistency, provide for
uncertificated Securities in addition to or in place of certificated Securities
or comply with any requirements of the SEC in connection with the qualification
of the Indenture under the TIA, or make any other change that does not
materially adversely affect the rights of any Holder.
14. Restrictive Covenants.
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to sell assets, to permit
restrictions on dividends and other payments by Subsidiaries to the Company, to
consolidate, merge or sell all or substantially all of its assets and to engage
in transactions with affiliates. The limitations are subject to a number of
important qualifications and exceptions. The Company must report annually to the
Trustee on compliance with such limitations.
15. 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 Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Subsidiary Guarantees
except as provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Subsidiary Guarantees unless it has received
indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Securities then outstanding to direct the Trustee in its exercise
of any trust or power. The Trustee may withhold from Holders of Securities
notice of certain continuing Defaults or Events of Default if it determines that
withholding notice is in their interest.
X-0
00
00. Trustee Dealings with Company and Guarantors.
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, the Guarantors, their respective Subsidiaries or their
respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, shall have any liability for any obligations
of the Company or any Guarantor under the Securities or the Subsidiary
Guarantees, as the case may be, or the Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities and the
Subsidiary Guarantees.
18. Authentication.
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
19. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of a
Security 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).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
21. Governing Law.
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee hereof without regard to principles of conflicts of
laws to the extent that the application of the laws of another jurisdiction
would be required thereby.
B-5
77
[FORM OF SUBSIDIARY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Each undersigned Guarantor (as defined in the Indenture referred to in
the Security upon which this notation is endorsed) hereby unconditionally
guarantees on a senior subordinated basis (such guaranty by such Guarantor being
referred to herein as the "Subsidiary Guarantee"), jointly and severally, the
due and punctual payment of the principal of, premium, if any, and interest on
the Securities, whether at maturity, by acceleration or otherwise, the due and
punctual payment of interest on the overdue principal, premium and interest on
the Securities, 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 11 of the Indenture.
The obligations of each undersigned Guarantor to the Holders of
Securities and to the Trustee pursuant to its Guarantee and the Indenture are
expressly set forth in, and are expressly subordinated and subject in right of
payment to, the prior payment in full of all Guarantor Senior Indebtedness (as
defined in the Indenture) of such Guarantor, to the extent and in the manner
provided in Article 11 and Article 12 of the Indenture, and reference is hereby
made to such Indenture for the precise terms of such Guarantee therein made.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Subsidiary Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Subsidiary Guarantee is subject to release upon the terms set
forth in the Indenture.
DALLAS WOODCRAFT, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
GIA, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
HOMCO, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
X-0
00
XXXXX XXXXXX XXXX, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
SPRING VALLEY SCENTS, INC.
By:
-------------------------------------
Name:
---------------------------------
Title:
---------------------------------
B-7
79
ASSIGNMENT FORM
I or we assign and transfer this Security to
-------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
-------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint
-------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated: Signed:
-------------------- ----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
---------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
B-8
80
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.08 or Section 4.14 of the Indenture, check the appropriate
box:
Section 4.08 [ ] Section 4.14 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.08 or Section 4.14 of the Indenture, state the
amount: $_____________
Dated: Your Signature:
-------------------- ----------------------------------
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee:
---------------------------------------------------------
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
B-9
81
EXHIBIT C
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 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 IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. 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
SECTION 2.16 OF THE INDENTURE.
C-1
82
EXHIBIT D
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 10 1/8% Series A Senior Subordinated Notes due 2008
(the "Securities") of Home Interiors & Gifts, Inc.
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor").
The Transferor:*
[ ] has requested by written order that the Registrar deliver in
exchange for its beneficial interest in the Global Security held by the
Depositary a Physical Security or Physical Securities in definitive, registered
form of authorized denominations and an aggregate number equal to its
beneficial interest in such Global Security (or the portion thereof indicated
above); or
[ ] has requested that the Registrar by written order exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Securities and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Securities does not require registration under the Securities
Act of 1933, as amended (the "Act"), because*:
[ ] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[ ] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[ ] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture.
[ ] Such Security is being transferred in reliance on Rule 144 under
the Act.
[ ] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.]
[INSERT NAME OF TRANSFEROR]
By:
------------------------------
[Authorized Signatory]
Date: ---------------------
*Check applicable box.
D-1
83
EXHIBIT E
FORM OF TRANSFEREE LETTER OF REPRESENTATION
HOME INTERIORS & GIFTS, INC.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
XXXXXX XXXXXX TRUST COMPANY OF NEW YORK
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Administration/Home Interiors
Ladies and Gentlemen:
This certificate is delivered to request a transfer of $________
principal amount of the 10 1/8% Senior Subordinated Notes due 2008 (the "Notes")
of HOME INTERIORS & GIFTS, INC. (the "Company"). Upon transfer, the Notes would
be registered in the name of the new beneficial owner as follows:
Name:
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Address:
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Taxpayer ID Number:
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The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risk of our investment in the Notes and we invest
in or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Notes to offer, sell or otherwise transfer
such Notes prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date") only (a) to the Company, (b) pursuant to a
registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000, (e) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act or (f) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any requirement of law
that the disposition of our property or the property of such investor account or
accounts be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Notes is proposed to be made pursuant to clause (d) above
prior to the Resale Restriction Termination Date, the transferor shall deliver a
letter from the transferee substantially in the form of this letter to the
Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act and that it is acquiring
such Notes for investment purposes and not for distribution in violation of the
Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to any offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Notes pursuant to clause (d), (e) or (f)
above to require the delivery of an opinion of counsel, certificates and/or
other information satisfactory to the Company and the Trustee.
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Dated: TRANSFEREE:
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By:
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00
XXXXXXX X
FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION
WITH REGULATION S TRANSFERS
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United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration/Home Interiors
Re: HOME INTERIORS & GIFTS, INC. (the "Company")
10 1/8% Series A Senior Subordinated Notes due 2008 and
10 1/8% Series B Senior Subordinated Notes due 2008 (collectively, the
"Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the transferee
was outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States, or (b)
the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither we nor any person acting on our behalf
knows that the transaction has been prearranged with a buyer in the United
States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S,
as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
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[Authorized Signatory]
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