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MEMBERWORKS INCORPORATED
as Issuer
AND EACH OF THE GUARANTORS PARTY HERETO
9 1/4% SENIOR NOTES DUE 2014
______________________
INDENTURE
Dated as of April 13, 2004
______________________
LaSalle Bank National Association,
as Trustee
______________________
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE .........................1
SECTION 1.01 DEFINITIONS .................................................1
SECTION 1.02 OTHER DEFINITIONS...........................................23
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...........23
SECTION 1.04 RULES OF CONSTRUCTION.......................................24
ARTICLE 2. THE NOTES..........................................................24
SECTION 2.01 FORM AND DATING.............................................24
SECTION 2.02 EXECUTION AND AUTHENTICATION................................26
SECTION 2.03 REGISTRAR AND PAYING AGENT..................................27
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.........................27
SECTION 2.05 HOLDER LISTS................................................27
SECTION 2.06 TRANSFER AND EXCHANGE.......................................28
SECTION 2.07 REPLACEMENT NOTES ..........................................34
SECTION 2.08 OUTSTANDING NOTES...........................................35
SECTION 2.09 TREASURY NOTES..............................................35
SECTION 2.10 TEMPORARY NOTES ............................................35
SECTION 2.11 CANCELLATION................................................35
SECTION 2.12 DEFAULTED INTEREST..........................................36
SECTION 2.13 CUSIP NUMBERS ..............................................36
SECTION 2.14 ISSUANCE OF ADDITIONAL NOTES................................36
ARTICLE 3. REDEMPTION AND PREPAYMENT .........................................37
SECTION 3.01 NOTICES TO TRUSTEE..........................................37
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED OR PURCHASED..............37
SECTION 3.03 NOTICE OF REDEMPTION........................................37
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION..............................38
SECTION 3.05 DEPOSIT OF REDEMPTION OR PURCHASE PRICE.....................38
SECTION 3.06 NOTES REDEEMED OR PURCHASED IN PART.........................39
SECTION 3.07 OPTIONAL REDEMPTION.........................................39
SECTION 3.08 MANDATORY REDEMPTION........................................40
SECTION 3.09 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.........40
ARTICLE 4. COVENANTS..........................................................42
SECTION 4.01 PAYMENT OF NOTES ...........................................42
SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY.............................42
SECTION 4.03 REPORTS.....................................................43
SECTION 4.04 COMPLIANCE CERTIFICATE......................................44
SECTION 4.05 TAXES.......................................................44
SECTION 4.06 STAY, EXTENSION AND USURY LAWS..............................45
SECTION 4.07 RESTRICTED PAYMENTS.........................................45
SECTION 4.08 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED
SUBSIDIARIES..............................................48
SECTION 4.09 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK..50
SECTION 4.10 ASSET SALES ................................................53
SECTION 4.11 TRANSACTIONS WITH AFFILIATES ...............................54
SECTION 4.12 LIENS ......................................................56
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SECTION 4.13 BUSINESS ACTIVITIES ........................................56
SECTION 4.14 CORPORATE EXISTENCE.........................................56
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL .................56
SECTION 4.16 PAYMENTS FOR CONSENT .......................................58
SECTION 4.17 ADDITIONAL SUBSIDIARY GUARANTEES ...........................58
SECTION 4.18 DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES ....58
SECTION 4.19 CHANGES IN COVENANTS WHEN NOTES RATED INVESTMENT GRADE .....59
ARTICLE 5. SUCCESSORS.........................................................60
SECTION 5.01 MERGER, CONSOLIDATION OR SALE OF ASSETS ....................60
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED ..........................61
ARTICLE 6. DEFAULTS AND REMEDIES .............................................61
SECTION 6.01 EVENTS OF DEFAULT ..........................................61
SECTION 6.02 ACCELERATION ...............................................63
SECTION 6.03 OTHER REMEDIES .............................................63
SECTION 6.04 WAIVER OF PAST DEFAULTS.....................................64
SECTION 6.05 CONTROL BY MAJORITY.........................................64
SECTION 6.06 LIMITATION ON SUITS.........................................64
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT........................65
SECTION 6.08 COLLECTION SUIT BY TRUSTEE .................................65
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM............................65
SECTION 6.10 PRIORITIES .................................................66
SECTION 6.11 UNDERTAKING FOR COSTS ......................................66
ARTICLE 7. TRUSTEE ...........................................................66
SECTION 7.01 DUTIES OF TRUSTEE ..........................................66
SECTION 7.02 RIGHTS OF TRUSTEE ..........................................67
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE ...............................68
SECTION 7.04 TRUSTEE'S DISCLAIMERS ......................................69
SECTION 7.05 NOTICE OF DEFAULTS .........................................69
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS ..............................69
SECTION 7.07 COMPENSATION AND INDEMNITY .................................69
SECTION 7.08 REPLACEMENT OF TRUSTEE .....................................70
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC............................71
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION ..............................71
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY ..........72
ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE ..........................72
SECTION 8.01 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE....72
SECTION 8.02 LEGAL DEFEASANCE AND DISCHARGE..............................72
SECTION 8.03 COVENANT DEFEASANCE.........................................73
SECTION 8.04 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE..................73
SECTION 8.05 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.............74
SECTION 8.06 REPAYMENT TO COMPANY .......................................75
SECTION 8.07 REINSTATEMENT ..............................................75
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ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER...................................76
SECTION 9.01 WITHOUT CONSENT OF HOLDERS..................................76
SECTION 9.02 WITH CONSENT OF HOLDERS.....................................77
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT.........................79
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS...........................79
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES............................79
SECTION 9.06 TRUSTEE TO SIGN AMENDMENTS, ETC.............................79
ARTICLE 10. SUBSIDIARY GUARANTEES ............................................79
SECTION 10.01 AGREEMENT TO GUARANTEE......................................79
SECTION 10.02 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.............80
SECTION 10.03 GUARANTORS MAY CONSOLIDATE, ETC. ON CERTAIN TERMS ..........81
SECTION 10.04 RELEASES....................................................82
ARTICLE 11. SATISFACTION AND DISCHARGE........................................83
SECTION 11.01 SATISFACTION AND DISCHARGE..................................83
SECTION 11.02 APPLICATION OF TRUST MONEY..................................84
ARTICLE 12. MISCELLANEOUS.....................................................85
SECTION 12.01 TRUST INDENTURE ACT CONTROLS ...............................85
SECTION 12.02 NOTICES.....................................................85
SECTION 12.03 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS................86
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT..........86
SECTION 12.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...............86
SECTION 12.06 RULES BY TRUSTEE AND AGENTS.................................87
SECTION 12.07 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS..............................................87
SECTION 12.08 GOVERNING LAW...............................................87
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS ..............87
SECTION 12.10 SUCCESSORS..................................................87
SECTION 12.11 SEVERABILITY................................................88
SECTION 12.12 COUNTERPART ORIGINALS.......................................88
SECTION 12.13 TABLE OF CONTENTS, HEADINGS, ETC............................88
EXHIBITS
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EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF SUPPLEMENTAL INDENTURE
EXHIBIT C FORM OF NOTATION ON SENIOR NOTE
RELATING TO SUBSIDIARY GUARANTEE
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Cross-Reference Table*
Trust Indenture Indenture
Act Section Section
310 (a)(1)........................................................ 7.10
(a)(2)........................................................ 7.10
(a)(3)........................................................ N.A.
(a)(4)........................................................ N.A.
(a)(5)........................................................ 7.10
(b) .......................................................... 7.10
(c)........................................................... N.A.
311 (a)........................................................... 7.11
(b)........................................................... 7.11
(c)........................................................... N.A.
312 (a)........................................................... 2.05
(b) .......................................................... 12.03
(c)........................................................... 12.03
313 (a)........................................................... 7.06
(b)(1)........................................................ N.A.
(b)(2)........................................................ 7.06; 7.07
(c)........................................................... 7.06; 12.02
(d) .......................................................... 7.06
314 (a)........................................................... 4.03; 12.02
(b) .......................................................... N.A.
(c)(1)........................................................ 12.04
(c)(2)........................................................ 12.04
(c)(3)........................................................ N.A.
(d) .......................................................... N.A.
(e)........................................................... 12.05
(f)........................................................... N.A.
315 (a)........................................................... 7.01
(b) .......................................................... 7.05, 12.02
(c)........................................................... 7.01
(d) .......................................................... 7.01
(e)........................................................... 6.11
316 (a)(last sentence)............................................ 2.09
(a)(1)(A) .................................................... 6.05
(a)(1)(B)..................................................... 6.04
(a)(2)........................................................ N.A.
(b) .......................................................... 6.07
(c)........................................................... 2.12
317 (a)(1)........................................................ 6.08
----------------------------
* This Cross-Reference Table is not part of the Indenture.
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(a)(2)........................................................ 6.09
(b)........................................................... 2.04
318 (a)........................................................... 12.01
(b)........................................................... N.A.
(c)........................................................... 12.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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This INDENTURE dated as of April 13, 2004, among MemberWorks
Incorporated, a Delaware corporation (the "Company ), Billing Services
International, Inc., Best Benefits, Inc., Impac Marketing Corp.,
XxXxxxxxxXxxxxxx.xxx, Inc., CountryWide Dental, Inc., MemberWorks Canada Holdco,
Inc., Interactive Media Consolidated, Inc., and Interactive Media Group (USA)
Ltd., each a Delaware corporation; MemberWorks Canada LLC, Interactive Voice
Media Baltimore LLC, Interactive Voice Media Colorado LLC, Interactive Voice
Media Georgia LLC, Interactive Voice Media Michigan LLC, Interactive Voice Media
New Jersey LLC, Interactive Voice Media New York LLC, Interactive Voice Media
Ohio LLC, Interactive Voice Media Pennsylvania LLC, Lavalife Washington DC LLC,
each a Delaware limited liability company; Quota Phone, Inc. and Xxxxxx Holding
Corp., each a New York corporation; Interactive LA Voice Media Corp.,
Interactive SJ Voice Media Corp., Interactive Voice Media (CA) Corp.,
Interactive Voice Media (Sacramento) Corp., each a California corporation;
Discount Development Services, LLC, an Illinois limited liability company,
Unicare, Inc., an Illinois corporation, Interactive Media (IL) Corp., an
Illinois corporation, Xxxxxxxxx & Company Inc., a Georgia corporation,
Interactive Media MO Corp., a Missouri corporation, Interactive Voice Media (MN)
Corp., a Minnesota corporation, Interactive (TX) Voice Media Corp., a Texas
corporation and Lavalife Corp., a Nova Scotia unlimited liability company
("Lavalife") (each of the foregoing referred to collectively herein as, the
"Guarantors") and LaSalle Bank National Association, as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of
each other and for the equal and ratable benefit of the Holders of the 9 1/4%
Senior Notes due 2014 (the "Initial Notes"), any Additional Notes (as defined
below) and the 9 1/4% Senior Notes due 2014 to be issued in exchange for Notes
pursuant to the Registration Rights Agreement (the "Exchange Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other Person
is merged with or into or became a Subsidiary of such specified Person,
whether or not such Indebtedness is incurred in connection with, or in
contemplation of, such other Person merging with or into, or becoming a
Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.
"Additional Notes" means additional notes (other than the Initial
Notes), if any, issued under this Indenture in accordance with Sections 2.02,
2.14 and 4.09 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control," as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of Voting Stock, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or
additional paying agent.
"Applicable Premium" means, with respect to any Note on any
Redemption Date, the greater of:
(1) 1.0% of the principal amount of the Note; and
(2) the excess of:
(a) the present value at such Redemption Date of (i) the redemption
price of the Note at April 1, 2009 (such redemption price as set
forth in Section 3.07(d) hereof) plus (ii) all required interest
payments due on the Note through April 1, 2009 (excluding accrued
but unpaid interest) computed using a discount rate equal to the
Treasury Rate as of such Redemption Date plus 0.50%; over
(b) the principal amount of the Note.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or rights;
provided that the sale, conveyance or other disposition of all or
substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole will be governed by Section 4.15 hereof
and/or Section 5.01 hereof and not by Section 4.10 hereof; and
(2) the issuance of Equity Interests in any of the Company's Restricted
Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries.
Notwithstanding the preceding, the following items will not be
deemed to be an Asset Sale:
(1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $3,000,000;
(2) a sale, lease, transfer conveyance or other disposition of assets between
or among the Company and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to the Company
or to another Restricted Subsidiary;
2
(4) the sale, lease, transfer conveyance or other disposition of products,
services, equipment, inventory, accounts receivable or other assets in
the ordinary course of business or other disposition of damaged, worn-out
or obsolete assets in the ordinary course of business;
(5) the sale or other disposition of cash or Cash Equivalents;
(6) the license of patents, trademarks, copyrights and know-how to third
Persons in the ordinary course of business;
(7) the creation of Liens; and
(8) a Restricted Payment that does not violate, or Permitted Investment that
is permitted by, Section 4.07 hereof.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" will be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" have
correlative meanings.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the corporation;
(2) with respect to a partnership, the Board of Directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such Person
serving a similar function.
"Business Day" means each day that is not a Saturday, Sunday or
other day on which banking institutions in New York, New York, or at a place of
payment, are authorized or required by law to close.
"Capital Lease Obligation" means, at the time any determination is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
3
(2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets
of, the issuing Person.
"Cash Equivalents" means:
(1) United States dollars and any other currency that is convertible into
United States dollars without legal restrictions and which is utilized by
the Company or any of its Restricted Subsidiaries in the ordinary course
of its business;
(2) securities issued or directly and fully guaranteed or insured by the
United States government or any agency or instrumentality of the United
States government (provided that the full faith and credit of the United
States is pledged in support of those securities) having maturities of
not more than one year from the date of acquisition;
(3) certificates of deposit and eurodollar time deposits with maturities of
270 days or less from the date of acquisition, bankers' acceptances with
maturities not exceeding 270 days and overnight bank deposits, in each
case, with any lender party to the Credit Agreement or with any domestic
commercial bank having capital and surplus in excess of $500,000,000 and
a Thomson BankWatch Rating of "B" or better;
(4) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2) and (3) above
entered into with any financial institution meeting the qualifications
specified in clause (3) above;
(5) commercial paper having one of the two highest ratings obtainable from
Moody's or S&P and in each case maturing within 270 days after the date
of acquisition; and
(6) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (5) of this
definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the properties or
assets of the Company and its Restricted Subsidiaries, taken as a whole
to any "person" (as that term is used in Section 13(d)(3) of the Exchange
Act);
(2) the approval by the holders of Voting Stock of the Company of a plan
relating to the liquidation or dissolution of the Company or the adoption
of a plan relating to the liquidation or dissolution of the Company by
its Board of Directors;
4
(3) the consummation of any transaction (including, without limitation, any
merger or consolidation) the result of which is that any "person" (as
that term is used in Section 13(d)(3) of the Exchange Act), becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the Voting
Stock of the Company, measured by voting power rather than number of
shares;
(4) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors; or
(5) the Company consolidates with, or merges with or into, any Person, or any
Person consolidates with, or merges with or into, the Company, in any
such event pursuant to a transaction in which any of the outstanding
Voting Stock of the Company or such other Person is converted into or
exchanged for cash, securities or other property, other than any such
transaction where the Voting Stock of the Company outstanding immediately
prior to such transaction is converted into or exchanged for Voting Stock
(other than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to
such issuance).
Notwithstanding the foregoing, a Change of Control shall not be
deemed to occur as a result of any merger primarily for the purpose of changing
the Company's jurisdiction of incorporation and resulting in a reclassification,
conversion or exchange of outstanding shares of common stock solely into shares
of common stock of the surviving entity.
"Clearstream" means Clearstream Banking, S.A., or any successor
securities clearing agency.
"Commission" means the U.S. Securities Exchange Commission.
"Consolidated Cash Flow" means, with respect to any specified
Person for any period, the Consolidated Net Income of such Person for such
period plus:
(1) an amount equal to any extraordinary loss plus any net loss realized by
such Person or any of its Restricted Subsidiaries in connection with (a)
an Asset Sale or (b) the disposition of any securities by, or the
extinguishment of any Indebtedness of, such Person or any of its
Restricted Subsidiaries, to the extent such losses were deducted in
computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(3) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued and whether or not
capitalized (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of
letter of credit
5
or bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense
to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) of such Person and its Subsidiaries for
such period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net
Income; plus
(5) unrealized non-cash losses resulting from foreign currency balance sheet
adjustments required by GAAP to the extent such losses were deducted in
computing such Consolidated Net Income; minus
(6) non-cash items increasing such Consolidated Net Income for such period,
other than the accrual of revenue in the ordinary course of business,
in each case, on a consolidated basis and determined in accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of accounting
will be included only to the extent of the amount of dividends or
distributions paid in cash to the specified Person or a Restricted
Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be excluded to the
extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(3) the cumulative effect of a change in accounting principles will be
excluded;
(4) any impairment loss of such Person or its Restricted Subsidiaries
relating to goodwill or other non-amortizing intangible asset will be
excluded; and
(5) the Net Income or loss of any Unrestricted Subsidiary will be excluded,
whether or not distributed to the specified Person or one of its
Subsidiaries.
6
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date of this Indenture; or
(2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of
such Board of Directors at the time of such nomination or election.
"Convertible Senior Subordinated Notes" means the 5.50%
Convertible Senior Subordinated Notes of the Company due October 1, 2010.
"Corporate Trust Office of the Trustee" will be at the principal
address of the Trustee specified in Section 12.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Credit Agreement" means that certain Amended and Restated Credit
Agreement, dated as of March 25, 2004 by and among the Company, certain
Subsidiaries of the Company, LaSalle Bank National Association, as Agent,
certain financial institutions as lenders and other agents and arrangers party
thereto, providing for up to $45,000,000 of revolving credit borrowings,
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
restated, modified, renewed, refunded, replaced (whether upon or after
termination or otherwise) or refinanced (including by means of Debt Issuances),
in whole or in part, from time to time.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks, investment banks, insurance companies, mutual funds and/or
other institutional lenders providing for revolving credit loans, term loans,
receivables or inventory financing (including through the sale of receivables or
inventory to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables or inventory) or letters of credit, in
each case, as amended, restated, modified, renewed, refunded, replaced (whether
upon or after termination or otherwise) or refinanced (including by means of
Debt Issuances) in whole or in part from time to time.
"Debt Issuances" means, with respect to the Company or any
Guarantor, one or more issuances after the Issue Date of Indebtedness evidenced
by notes, debentures, bonds or other similar securities or instruments.
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Article 2 hereof,
substantially in the form of Exhibit A hereto, except that such Note will not
bear the Global Note Legend and will not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
7
"Depositary" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.03 hereof
as the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provisions of this Indenture.
"Disqualified 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, in each case at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07 hereof
"Distribution Compliance Period" means, with respect to any Notes,
the period of 40 consecutive days beginning on and including the later of (i)
the day on which such Notes are first offered to Persons other than distributors
(as defined in Regulation S) in reliance on Regulation S and (ii) the issue date
with respect to such Notes.
"Domestic Subsidiary" means any Restricted Subsidiary of the
Company that was formed under the laws of the United States or any state of the
United States or the District of Columbia.
"Equity Interests" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means any public or private sale of Equity
Interests (other than Disqualified Stock) made for cash on a primary basis by
the Company after the Issue Date.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system, or any successor securities clearing agency.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the 9 1/4% Senior Notes due 2014,
registered under the Securities Act, issued pursuant to this Indenture in
connection with an Exchange Offer pursuant to the Registration Rights Agreement
and (ii) Additional Notes, if any, issued pursuant to a registration statement
filed with the SEC under the Securities Act.
"Exchange Offer" means the exchange and issuance by the Company,
pursuant to a Registration Rights Agreement, of a principal amount of Exchange
Notes (which will be registered pursuant to the Exchange Offer Registration
Statement (as defined in the Registration Rights Agreement)) equal to the
outstanding principal amount of Initial Notes or Additional
8
Notes, as the case may be, tendered by Holders thereof in connection with such
exchange and issuance.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the Issue Date, until such amounts are repaid.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any four-quarter reference period, the ratio of the Consolidated Cash
Flow of such Person and its Restricted Subsidiaries for such period to the Fixed
Charges of such Person and its Restricted Subsidiaries for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness (other than
ordinary working capital borrowings) or issues, repurchases or redeems preferred
stock subsequent to the commencement of the applicable period for which the
Fixed Charge Coverage Ratio is being calculated and on or prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the "Calculation Date"), then the Fixed Charge Coverage Ratio will be
calculated giving pro forma effect to such incurrence, assumption, Guarantee,
repayment, repurchase or redemption of Indebtedness, or such issuance,
repurchase or redemption of preferred stock, and the use of the proceeds
therefrom, as if the same had occurred at the beginning of such period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified Person or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, subsequent to the
commencement of the applicable four-quarter reference period and on or
prior to the Calculation Date will be given pro forma effect as if they
had occurred on the first day of the four-quarter reference period,
including any Consolidated Cash Flow and any pro forma expense and cost
reductions that have occurred or are reasonably expected to occur, in the
reasonable judgment of the chief financial officer of the specified
Person (regardless of whether those cost savings or operating
improvements could then be reflected in pro forma financial statements in
accordance with Regulation S-X promulgated under the Securities Act or
any other regulation or policy of the Commission related thereto);
(2) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed
of prior to the Calculation Date, will be excluded;
(3) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior
to the Calculation Date, will be excluded, but only to the extent that
the obligations giving rise to such Fixed Charges will not be obligations
of the specified Person or any of its Restricted Subsidiaries following
the Calculation Date;
9
(4) any Person that is a Restricted Subsidiary on the Calculation Date will
be deemed to have been a Restricted Subsidiary at all times during the
applicable four-quarter reference period;
(5) any Person that is not a Restricted Subsidiary on such Calculation Date
will be deemed not to have been a Restricted Subsidiary at any time
during the applicable four-quarter reference period; and
(6) if any Indebtedness bears a floating rate of interest, the interest
expense on such Indebtedness will be calculated as if the rate in effect
on the Calculation Date had been the applicable rate for the entire
applicable four-quarter reference period (taking into account any Hedging
Obligation applicable to such Indebtedness if such Hedging Obligation has
a remaining term as at the Calculation Date in excess of 12 months).
"Fixed Charges" means, with respect to any specified Person for
any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether paid or accrued, including, without
limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations; plus
(2) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is Guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien
on assets of such Person or one of its Restricted Subsidiaries, whether
or not such Subsidiary Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and whether or
not in cash, on any series of preferred stock of such Person or any of
its Restricted Subsidiaries, other than dividends on Equity Interests
payable solely in Equity Interests of the Company (other than
Disqualified Stock) or to the Company or a Restricted Subsidiary of the
Company, times (b) if such dividends are not deductible for income tax
purposes based on the law in effect at the time of payment, a fraction,
the numerator of which is one and the denominator of which is one minus
the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal,
in each case, on a consolidated basis and in accordance with GAAP.
"Foreign Subsidiary" means Subsidiaries of the Company that are
not Domestic Subsidiaries.
10
"GAAP" means generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as have been approved by a
significant segment of the accounting profession, which are in effect on the
Issue Date.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Article 2 hereof.
"Global Note Legend" means the legend set forth in Section
2.06(e)(i) hereof to be placed on all Global Notes issued under this Indenture.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
Guarantee or obligations the full faith and credit of the United States is
pledged.
"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.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person incurred in the ordinary course of business and
not for speculative purposes under:
(1) interest rate swap agreements, interest rate cap agreements and interest
rate collar agreements entered into with one or more financial
institutions and designed to protect the Person or entity entering into
the agreement against fluctuations in interest rates with respect to
Indebtedness incurred;
(2) foreign exchange contracts and currency protection agreements entered
into with one or more financial institutions that are designed to protect
the Person or entity entering into the agreement against fluctuations in
currency exchanges rates with respect to Indebtedness incurred;
(3) any commodity futures contract, commodity option or other similar
agreement or arrangement designed to protect against fluctuations in the
price of commodities used by such Person at the time; and
(4) other agreements or arrangements designed to protect such person against
fluctuations in interest rates or currency exchange rates.
"Holder" means a holder of Notes.
11
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the purchase price of any
property due more than six months after such property is acquired; or
(6) representing Hedging Obligations;
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any Indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount;
(2) the principal amount of the Indebtedness, together with any interest on
the Indebtedness that is more than 30 days past due, in the case of any
other Indebtedness; and
(3) with respect to Hedging Obligations, the amount required to be recorded
as a liability in accordance with GAAP.
In addition, for the purpose of avoiding duplication in
calculating the outstanding principal amount of Indebtedness for purposes of
Section 4.09 hereof, Indebtedness arising solely by reason of the existence of a
Lien to secure other Indebtedness permitted to be incurred under Section 4.09
hereof will not be considered incremental Indebtedness.
Indebtedness will not include the obligations of any Person (A)
resulting from the endorsement of negotiable instruments for collection in the
ordinary course of business, (B) under stand-by letters of credit to the extent
collateralized by cash or Cash Equivalents and (C) resulting from
representations, warranties, covenants and indemnities given by such Person that
are reasonably customary for sellers or transferors in an accounts receivable
securitization transaction.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
12
"Initial Notes" means $150,000,000 in aggregate principal amount
of 9 1/4% Senior Notes due 2014 issued under this Indenture on the Issue Date.
"Institutional Accredited Investor" means an institution that is
an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made in the ordinary course of business), purchases or
other acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company will be deemed to
have made an Investment on the date of any such sale or disposition in an amount
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 hereof. The acquisition by the Company or any
Restricted Subsidiary of the Company of a Person that holds an Investment in a
third Person will be deemed to be an Investment made by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person on the
date of any such acquisition in an amount determined as provided in the final
paragraph of Section 4.07 hereof.
"Issue Date" means the first date on which the Notes are initially
issued.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized or required by law, regulation or executive order to remain closed.
If a payment date is a Legal Holiday at a place of payment, payment may be made
at that place on the next succeeding day that is not a Legal Holiday, and no
interest will accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law, including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction.
"Liquidated Damages" means amounts payable under the Registration
Rights Agreement as pursuant to Section 4 of the Registration Rights Agreement.
"Moorly's" means Xxxxx'x Investor Services, Inc. or any successor
rating agency.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
13
(1) any gain (or loss), together with any related provision for taxes on such
gain (but not loss), realized in connection with: (a) any Asset Sale; or
(b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain (or loss), together with any related provision for
taxes on such extraordinary gain (or loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, recording
fees, title transfer fees, appraiser fees, costs of preparation of assets for
sale and any relocation expenses incurred as a result of the Asset Sale, and
taxes paid or payable as a result of the Asset Sale in each case, after taking
into account any available tax credits or deductions and any tax sharing
arrangements, and amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale, all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries or joint ventures as a
result of the Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), (b) is
directly or indirectly liable as a guarantor or otherwise, or (c) is the
lender;
(2) no default with respect to which (including any rights that the holders
of the Indebtedness may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness (other than the Notes) of the
Company or any of its Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its Stated Maturity; and
(3) as to which the lenders have been notified in writing that they will not
have any recourse to the stock (other than the stock of an Unrestricted
Subsidiary pledged by the Company or any of its Restricted Subsidiaries)
or assets of the Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Custodian" means the Trustee, as custodian with respect to
the Notes in global form, or any successor entity thereto.
"Notes" means the Initial Notes and, unless the context otherwise
requires, the Additional Notes, including any Exchange Notes.
14
"Obligations" means any principal, interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization, whether or not a claim for post-filing interest is allowed in
such proceeding), premium and Liquidated Damages, if any, penalties, fees,
charges, expenses, indemnifications, reimbursement obligations, damages,
guarantees and other liabilities or amounts payable under the documentation
governing any Indebtedness or in respect thereto.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary, any Assistant Secretary or any Vice-President of such
Person.
"Officers' Certificate" means a certificate signed on behalf of
the Company by one Officer of the Company, who must be the principal executive
officer, the principal financial officer, a vice president, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or
Clearstream, a Person who has an account with DTC, Euroclear or Clearstream,
respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means (i) lines of business conducted by the
Company and its Restricted Subsidiaries on the Issue Date, (ii) any business in
the field of consumer services and (iii) any business incidental or reasonably
related to the foregoing clauses (i) and (ii) or which is a reasonable extension
thereof as determined in good faith by the Company's Board of Directors and set
forth in an officers' certificate delivered to the Trustee.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted Subsidiary of the
Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted Subsidiary of the Company
in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the Company; or
(b) such Person is merged, consolidated or amalgamated with or into,
or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Restricted Subsidiary of the
Company;
(4) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with
Section 4.10 hereof;
15
(5) any acquisition of assets solely in exchange for the issuance of Equity
Interests (other than Disqualified Stock) of the Company or made with the
proceeds of a substantially concurrent sale of such Equity Interests
(other than Disqualified Stock);
(6) any Investments received in compromise or resolution of obligations of
(A) trade creditors or customers that were incurred in the ordinary
course of business, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade
creditor or customer or (B) litigation, arbitration or other similar
disputes;
(7) Hedging Obligations permitted to be incurred under Section 4.09 hereof,
(8) repurchases of the Notes;
(9) loans and advances made in the ordinary course of business, to officers,
directors and employees in an aggregate amount not to exceed $1,000,000
outstanding at any one time;
(10) Investments of any Person (other than Indebtedness of such Person) in
existence at the time such Person becomes a Subsidiary of the Company;
provided such Investment was not made in connection with or anticipation
of such Person becoming a Subsidiary of the Company;
(11) Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business and advances, loans
or extensions of credit to suppliers in the ordinary course of business;
and
(12) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving
effect to subsequent changes in value), when taken together with all
other Investments made pursuant to this clause (12) since the Issue Date
that remain outstanding at the time, not to exceed $5,000,000; provided,
however, that if any Investment pursuant to this clause (12) is made in
any Person that subsequent to the date of such Investment becomes a
Restricted Subsidiary of the Company, then such Investment shall
thereafter be deemed to have been made pursuant to clause (1) above, and
the amount of such Investment shall be reset to zero for purposes of this
clause (12).
"Permitted Liens" means:
(1) Liens of the Company and the Guarantors securing Indebtedness under
Credit Facilities that was permitted by the terms of this Indenture,
whether incurred pursuant to Section 4.09(a) hereof or Section 4.09(b)(i)
hereof,
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided
16
that such Liens were in existence prior to the contemplation of such
merger or consolidation and do not extend to any assets other than those
of the Person merged into or consolidated with the Company or any
Restricted Subsidiary;
(4) Liens on property existing at the time of acquisition of the property by
the Company or any Restricted Subsidiary of the Company, provided that
such Liens were in existence prior to the contemplation of such
acquisition;
(5) Liens to secure the performance of statutory obligations, surety or
appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business;
(6) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (iv) of Section 4.09(b) hereof covering only the
assets acquired with or financed by such Indebtedness;
(7) Liens existing on the Issue Date;
(8) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded,
provided that any reserve or other appropriate provision as is required
in conformity with GAAP has been made therefor;
(9) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse
Debt of Unrestricted Subsidiaries;
(10) Liens imposed by law, such as carriers', warehousemen's, landlord's and
mechanics' Liens, in each case, incurred in the ordinary course of
business;
(11) survey exceptions, casements or reservations of, or rights of others for,
licenses, rights-of-way, sewers, electric lines, telegraph and telephone
lines and other similar purposes, or zoning or other restrictions as to
the use of real property that were not incurred in connection with
Indebtedness and that do not in the aggregate materially adversely affect
the value of said properties or materially impair their use in the
operation of the business of such Person;
(12) Liens created for the benefit of (or to secure) the Notes (or Subsidiary
Guarantees of the Notes);
(13) Liens to secure any Permitted Refinancing Indebtedness permitted to be
incurred under this Indenture; provided, however, that:
(A) the new Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which
the original Lien arose, could secure the original Lien (plus
improvements and accessions to, such property or proceeds or
distributions thereof); and
17
(B) the Indebtedness secured by the new Lien is not increased to any
amount greater than the sum of (x) the outstanding principal amount or,
if greater, committed amount, of the Permitted Referencing Indebtedness
and (y) an amount necessary to pay any fees and expenses, including
premiums, related to such refinancings, refunding, extension, renewal or
replacement;
(14) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
types of social security; and
(15) Liens incurred in the ordinary course of business of the Company or any
Subsidiary of the Company with respect to obligations that do not exceed
$5,000,000 at any one time outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums incurred in
connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity date later
than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity
of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes on terms at least as favorable to the Holders as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or by the Restricted
Subsidiary of the Company that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(e)(i) hereof to be placed on all Notes issued under this Indenture except
as otherwise permitted by the provisions of this Indenture.
18
"Purchase Agreement" means (i) with respect to the Initial Notes,
the Purchase Agreement, dated April 7, 2004, among the Company and the
Guarantors and the Initial Purchasers named therein and (ii) with respect to
each issuance of Additional Notes, the purchase agreement or underwriting
agreement among the Company, the Guarantors and the Persons purchasing such
Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Issue Date, by and among the Company and the
Guarantors and the other parties named on the signature pages thereof, as such
agreement may be amended, modified or supplemented from time to time and, with
respect to any Additional Notes, one or more registration rights agreements
among the Company and the Guarantors and the other parties thereto, as such
agreements may be amended, modified or supplemented from time to time, relating
to rights given by the Company to the purchasers of Additional Notes to register
such Additional Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Global Note bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf of
the Depositary and registered in the name of the Depositary or its nominee,
issued in a denomination equal to the outstanding principal amount of the Notes
initially sold in reliance on Rule 903 of Regulation S.
"Responsible Officer" when used with respect to the Trustee, means
any officer within the Corporate Trust Services Division of the Trustee (or any
successor group of the Trustee) with direct responsibility for the
administration of this Indenture or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Global Notes" means the Rule 144A Global Note and the
Regulation S Global Note, each of which shall bear the Private Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Securities" means all Notes offered and sold to QIBs in
reliance on Rule 144A.
"Rule 903" means Rule 903 promulgated under the Securities Act.
19
"Rule 904" means Rule 904 promulgated under the Securities Act.
"Securities Act" means the U.S. Securities Act of 1933, as
amended.
"Senior Debt" means, Indebtedness of the Company and its
Restricted Subsidiaries, at the time any determination is to be made, in an
amount equal to the sum of:
(1) all Indebtedness of the Company and its Restricted Subsidiaries
outstanding under Credit Facilities and Hedging Obligations related
thereto at such time, and
(2) all other outstanding Indebtedness of the Company or any of its
Restricted Subsidiaries, unless the instrument under which such
Indebtedness is incurred expressly provides that such Indebtedness is
subordinated to the Notes and the Guarantees.
Notwithstanding anything to the contrary in the preceding sentence, Senior Debt
will not include:
(1) any liability for federal, state, local or other taxes owed or owing by
the Company or any of its Restricted Subsidiaries;
(2) any Indebtedness of the Company to any of its Subsidiaries or other
Affiliates that is by its term subordinate to the Notes;
(3) any trade payables; or
(4) any obligations with respect to any Capital Stock of the Company or any
of its Restricted Subsidiaries.
"Senior Debt to Consolidated Cash Flow Ratio" means, for any four
full fiscal quarter period, the ratio of (x) Senior Debt at the time of
determination to (y) Consolidated Cash Flow of the Company and its Restricted
Subsidiaries for such period.
"Shelf Registration Statement" means the shelf registration
statement issued by the Company in connection with the offer and sale of Notes
pursuant to a Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation 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 the
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and will 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.
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"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which more than
50% of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the
only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means any Guarantee by a Guarantor of the
Company's payment Obligations under this Indenture and the Notes, executed
pursuant to the provisions of this Indenture.
"S&P" means Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., or any successor rating agency.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the Private Placement Legend set forth in Section 2.06(e)(i)
hereof.
"Treasury Rate" means, as of any Redemption Date, the yield to
maturity as of such Redemption Date of United States Treasury securities with a
constant maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H.15 (519) that has become publicly available at least two
Business Days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to April 1, 2009; provided,
however, that if the period from the Redemption Date to April 1, 2009 is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Global Note" means one or more Global Notes,
substantially in the form of Exhibit A attached hereto, that bear the Global
Note Legend, that do not and are not required to bear the Private Placement
Legend and are deposited with or on behalf of and registered in the name of the
Depositary or its nominee.
"Unrestricted Subsidiary" means any Subsidiary of the Company that
is designated by the Board of Directors as an Unrestricted Subsidiary pursuant
to a resolution of the Board of Directors of the Company, but only to the extent
that such Subsidiary:
21
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or understanding
with the Company or any Restricted Subsidiary of the Company unless the
terms of any such agreement, contract, arrangement or understanding are
no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of
the Company;
(3) is a Person with respect to which neither the Company nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results; and
(4) has not Guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the preceding conditions and was permitted by Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
preceding requirements as an Unrestricted Subsidiary, it will thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 4.09 hereof, the Company
will be in default of such covenant. The Board of Directors of the Company may
at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary;
provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
"U.S. Person" means a U.S. person as defined in Rule 902(k) under
the Securities Act.
"Voting Stock" of any Person as of any date means the Capital
Stock of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (b) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the
making of such payment; by
22
(2) the then outstanding principal amount of such Indebtedness.
"Wholly-Owned Restricted Subsidiary" means a direct or indirect
Restricted Subsidiary of the Company all of the Capital Stock of which, other
than directors' qualifying shares, is owned by the Company or another
Wholly-Owned Restricted Subsidiary.
Section 1.02 Other Definitions.
Defined in
Term Section
"Affiliate Transaction"..........................................4.11
"Asset Sale Offer" ..............................................3.09
"Authentication Order............................................2.02
"Change of Control Offer" .......................................4.15
"Change of Control Payment ......................................4.15
"Change of Control Payment Date" ................................4.15
"Company"....................................................Preamble
"Covenant Defeasance"............................................8.03
"DTC" ...........................................................2.03
"Event of Default"...............................................6.01
"Excess Proceeds" ...............................................4.10
"Guarantors" ................................................Preamble
"incur" .........................................................4.09
"Investment Grade Rating"........................................4.19
"Legal Defeasance" ..............................................8.02
"Offer Amount" ..................................................3.09
"Offer Period"...................................................3.09
"Paying Agent" ..................................................2.03
"Payment Default" ...............................................6.01
"Regulation S Global Note .......................................2.01
"Permitted Debt" ................................................4.09
"Purchase Date" .................................................3.09
"Redemption Date" ...............................................3.07
"Registrar" .....................................................2.03
"Restricted Payments" ...........................................4.07
"Rule 144A Global Note" .........................................2.01
"Suspended Covenant" ............................................4.19
Section 1.03 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:
"indenture securities" means the Notes;
23
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and the Guarantors,
respectively, and any successor obligor on the Notes.
All other terms used in this Indenture that arc defined by the
TIA, defined by TIA reference to another statute or defined by Commission rule
under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the plural
include the singular;
(v) provisions apply to successive events and transactions; and
(vi) references to sections of or rules under the Securities Act
will be deemed to include substitute, replacement of successor sections
or rules adopted by the Commission from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes
may be issued in the form of Definitive Notes or Global Notes, as specified by
the Company. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Note will be dated the date of its
authentication. The Notes will be in denominations of $1,000 and integral
multiples thereof.
Notes issued in global form will be substantially in the form of
Exhibit A attached hereto (including the Global Note Legend and the "Schedule of
Exchanges in the Global Note" attached thereto). Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without the
Global Note Legend and without the "Schedule of Exchanges of Interests in the
Global Note" attached thereto). Each Global Note will represent such of the
24
outstanding Notes as will he specified therein and each will provide that it
represents the aggregate principal amount of outstanding Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Notes
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges and redemptions. Any endorsement of a Global
Note to reflect the amount of any increase or decrease in the aggregate
principal amount of outstanding Notes represented thereby will he made by the
Trustee or the Note Custodian, at the direction of the Trustee, in accordance
with instructions given by the Holder thereof as required by Section 2.06
hereof.
The terms and provisions contained in the Notes will constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be hound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture will govern and be controlling.
(b) Initial Notes. The Initial Notes will be offered and sold by
the Company pursuant to a Purchase Agreement. The Initial Notes will be resold
initially only to (i) QIBs in reliance on Rule 144A and (ii) Non-U.S. Persons in
reliance on Regulation S. Initial Notes may thereafter be transferred to, among
others, QIBs and purchasers in reliance on Regulation S, subject to the
restrictions on transfer set forth herein. Initial Notes initially resold
pursuant to Rule 144A will be issued initially in the form of one or more Global
Notes in definitive, fully registered form (collectively, the "Rule 144A Global
Note") and Initial Notes initially resold pursuant to Regulation S will be
issued initially in the form of one or more Global Notes in definitive, fully
registered form (collectively, the "Regulation S Global Note"), in each case
without interest coupons and with the Global Note Legend and Private Placement
Legend set forth in Exhibit A hereto, which will be deposited on behalf of the
purchasers of the Initial Notes represented thereby with the Notes Custodian,
and registered in the name of DTC or a nominee of the DTC, duly executed by the
Company and authenticated by the Trustee as provided in this Indenture.
Beneficial ownership interests in the Regulation S Global Note may be held only
through Euroclear and Clearstream (as indirect participants in DTC) and will not
be exchangeable for interests in the Rule 144A Global Note or a Definitive Note
without a legend containing restrictions on transfer of such Note prior to the
expiration of the Distribution Compliance Period and then only upon (x)
certification in form reasonably satisfactory to the Trustee that Beneficial
Ownership interests in such Regulation S Global Note are owned either by
Non-U.S. Persons or U.S. Persons who purchased such interests in a transaction
that did not require registration under the Securities Act and (y) in the case
of an exchange for a Definitive Note, in compliance with Section 2.01(c) hereof.
The aggregate principal amount of the Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depositary or its nominee as hereinafter provided.
(c) Book-Entry Provisions. This Section 2.01(c) will apply only to
a Global Note deposited with or on behalf of the Depositary.
The Company will execute and the Trustee will, in accordance with
this Section 2.01(c), authenticate and deliver initially one or more Global
Notes that (a) will be deposited upon issuance with the Trustee as custodian for
the Depositary, in New York, New
25
York or Chicago, Illinois and (b) will be registered in the name of the
Depositary or its nominee, in each case for credit to an account of a direct or
indirect participant in Depositary.
Participants in the Depositary will have no rights under this
Indenture with respect to any Global Note held on their behalf by the Depositary
or by the Trustee as the custodian of the Depositary or under such Global Note,
and the Company, the Trustee and any agent of the Company or the Trustee will be
entitled to treat the Depositary as the absolute owner of such Global Note for
all purposes whatsoever. Notwithstanding the foregoing, nothing herein will
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such Depositary governing
the exercise of the rights of a Holder of a beneficial interest in any Global
Note.
(d) Certificated Notes. Except as provided in this Section 2.01 or
Section 2.03 or 2.04 hereof, owners of beneficial interests in Global Notes will
not be entitled to receive physical delivery of Definitive Notes.
Section 2.02 Execution and Authentication.
One Officer will sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual or
facsimile signature of the Trustee. The signature will be conclusive evidence
that the Note has been authenticated under this Indenture.
The Trustee will authenticate and deliver: (i) on the Issue Date,
an aggregate principal amount of $150,000,000 9 1/4% Senior Notes Due 2014, (ii)
Additional Notes for an original issue in an aggregate principal amount
specified in the written order of the Company pursuant to this Section 2.02 and
(iii) Exchange Notes for issue only in an Exchange Offer pursuant to a
Registration Rights Agreement, for a like principal amount of Initial Notes or
Additional Notes, in each case upon a written order of the Company signed by one
Officer of the Company (an "Authentication Order"). Such order will specify the
amount of the Notes to be authenticated and the date on which the original issue
of the Notes is to be authenticated.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Notes. An authenticating agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent for service of
notices and demands.
26
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company will notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee will act as such. The Company or any of
its Restricted Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Note Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, interest, premium or Liquidated Damages, if any, on the Notes, and
will notify the Trustee of any Default by the Company in making any such
payment. While any such Default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and will otherwise comply with TIA ss. 312(a). If the Trustee is not
the Registrar, the Company will furnish to the Trustee, at least five Business
Days before each interest payment date and at such other times as the Trustee
may request in writing, a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of the Holders and the Company
will otherwise comply with TIA ss. 312(a).
27
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented to the Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive Notes or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar or co-registrar will register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met; provided,
however, that the Definitive Notes surrendered for transfer or exchange:
(i) are duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the
Registrar or co-registrar, duly executed by the Holder thereof or its
attorney duly authorized in writing; and
(ii) if such Definitive Notes are required to bear a restricted
securities legend, they are being transferred or exchanged pursuant to
an effective registration statement under the Securities Act, pursuant
to Section 2.06(b) hereof or pursuant to clause (A), (B) or (C) below,
and are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Notes are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect;
or
(B) if such Definitive Notes are being transferred to the
Company, a certification to that effect; or
(C) if such Definitive Notes are being transferred (x)
pursuant to an exemption from registration in accordance with Rule
144A, Regulation S or Rule 144 or (y) in reliance upon another
exemption from the requirements of the Securities Act: (1) a
certification to that effect (in the form set forth on the reverse
of the Note) and (2) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to
compliance with the restrictions set forth in the legend set forth
in Section 2.06(e)(i) hereof.
(b) Restrictions on Transfer of a Definitive Note for a Beneficial
Interest in a Global Security. A Definitive Note may not be exchanged for a
beneficial interest in a Rule 144A Global Note or a Regulation S Global Note
except upon satisfaction of the requirements set forth below. Upon receipt by
the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate
instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Note, that such Definitive Note is either (A) being transferred to a
QIB in accordance with Rule 144A or (B) is being transferred after
expiration of the Distribution Compliance Period by a
28
Person who initially purchased such Note in reliance on Regulation S to
a buyer who elects to hold its interest in such Note in the form of a
beneficial interest in the Regulation S Global Security; and
(ii) written instructions directing the Trustee to make, or to
direct the Notes Custodian to make, an adjustment on its books and
records with respect to such Rule 144A Global Note (in the case of a
transfer pursuant to clause (b)(i)(A)) or Regulation S Global Note (in
the case of a transfer pursuant to clause (b)(i)(B)) to reflect an
increase in the aggregate principal amount of the Notes represented by
the Rule 144A Global Note or Regulation S Global Note, as applicable,
such instructions to contain information regarding the Depositary
account to be credited with such increase,
then the Trustee will cancel such Definitive Note and cause, or direct the Notes
Custodian to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Notes Custodian, the aggregate principal
amount of Notes represented by the Rule 144A Global Note or Regulation S Global
Note, as applicable, to be increased by the aggregate principal amount of the
Definitive Note to be exchanged and will credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest in
the Rule 144A Global Note or Regulation S Global Note, as applicable, equal to
the principal amount of the Definitive Note so canceled. If no Rule 144A Global
Notes or Regulation S Global Notes, as applicable, are then outstanding, the
Company will issue and the Trustee will authenticate, upon written order of the
Company in the form of an Officers' Certificate, a new Rule 144A Global Note or
Regulation S Global Note, as applicable, in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. (i) The transfer and
exchange of Global Notes or beneficial interests therein will be effected
through the Depositary, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global Note will
deliver to the Registrar a written order given in accordance with the
Depositary's procedures containing information regarding the Participant account
of the Depositary to be credited with a beneficial interest in the Global Note.
The Registrar will, in accordance with such instructions, instruct the
Depositary to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Note and to debit the account of the Person
making the transfer the beneficial interest in the Global Note being
transferred.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Note to a beneficial interest in another Global Note, the
Registrar will reflect on its books and records the date and an increase in the
principal amount of the Global Note to which such interest is being transferred
in an amount equal to the principal amount of the interest to be so transferred,
and the Registrar will reflect on its books and records the date and a
corresponding decrease in the principal amount of the Global Note from which
such interest is being transferred.
(iii) Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in Section 2.06(c)(v) hereof), a Global
Note may not be transferred as a whole except by the Depositary to a nominee of
the Depositary or by a nominee of the
29
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(iv) In the event that a Global Note is exchanged for Definitive
Notes pursuant to Section 2.06(c)(v) hereof, prior to the consummation of an
Exchange Offer or the effectiveness of a Shelf Registration Statement with
respect to such Notes, such Notes may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this Section
2.06 (including the certification requirements set forth on the reverse of the
Initial Notes intended to ensure that such transfers comply with Rule 144A or
Regulation S, as the case may be) and such other procedures as may from time to
time be adopted by the Company.
(v) A Global Note deposited with the Depositary or with the
Trustee as Notes Custodian for the Depositary pursuant to Section 2.01 hereof
will be transferred to the Beneficial Owners thereof in the form of Definitive
Notes in an aggregate principal amount equal to the principal amount of such
Global Note, in exchange for such Global Note, only if such transfer complies
with Section 2.06 hereof and (A) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such Global Note or if at any
time such Depositary ceases to be a "clearing agency" registered under the
Exchange Act and, in either case, a successor Depositary is not appointed by the
Company within 90 days of such notice, (B) an Event of Default has occurred and
is continuing or (C) the Company, in its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes under this
Indenture.
Any Global Note that is transferable to the Beneficial Owners
thereof pursuant to this Section 2.06(c)(v) will be surrendered by the
Depositary to the Trustee located at its principal corporate trust office in
Chicago, Illinois, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee will authenticate and deliver, upon such
transfer of each portion of such Global Note, an equal aggregate principal
amount of Definitive Notes of authorized denominations. Any portion of a Global
Note transferred pursuant to this Section 2.06(c)(v) will be executed,
authenticated and delivered only in denominations of $1,000 principal amount and
any integral multiple thereof and registered in such names as the Depositary
shall direct. Any Definitive Note delivered in exchange for an interest in the
Transfer Restricted Security will, except as otherwise provided by Section
2.06(e) hereof or unless not required by applicable law, bear the Private
Placement Legend set forth in Exhibit A hereto.
(d) Exchanges Between Regulation S Notes and Rule 144A Notes.
Prior to the expiration of the Distribution Compliance Period, beneficial
interests in a Regulation S Global Note may be exchanged for beneficial
interests in the Rule 144A Note only if (i) such exchange occurs in connection
with a transfer of the Notes pursuant to Rule 144A and (ii) the transferor first
delivers to the Trustee a written certificate (in the form provided in this
Indenture) to the effect that the Notes are being transferred to a Person (A)
who the transferor reasonably believes to be a QIB; (B) purchasing for its own
account or the account of a QIB in a transaction meeting the requirements of
Rule 144A; and (C) in accordance with all applicable securities laws of the
states of the United States and other jurisdictions.
Beneficial interest in a Rule 144A Global Note may be transferred
to a Person who takes delivery in the form of an interest in the Regulation S
Global Note, whether before or
30
after the expiration of the Distribution Compliance Period, only if the
transferor first delivers to the Trustee a written certificate (in the form
provided in this Indenture) to the effect that such transfer is being made in
accordance with Rule 903 or 904 of Regulation S or Rule 144 (if available) and
that, if such transfer occurs prior to the expiration of the Distribution
Compliance Period, the interest transferred will be held immediately thereafter
through Euroclear or Clearstream.
Transfers involving exchanges of beneficial interests between the
Regulation S Global Notes will be effected through the Depositary by means of an
instruction originated by the Trustee through the DTC Deposit/Withdraw at
Custodian system. Accordingly, in connection with any such transfer, appropriate
adjustments will be made to reflect a decrease in the principal amount of the
Regulation S Global Note and a corresponding increase in the principal amount of
the Rule 144A Global Note or vice versa, as applicable. Any beneficial interest
in one of the Global Notes that is transferred to a Person who takes delivery in
the form of an interest in the other Global Note will, upon transfer, cease to
be an interest in such Global Note and will become an interest in the other
Global Note and, accordingly, will thereafter be subject to all transfer
restrictions and other procedures applicable to the beneficial interest in such
other Global Note for so long as it remains such an interest. The policies and
practices of the Depositary may prohibit transfers of beneficial interests in
the Regulation S Global Note prior to the expiration of the Distribution
Compliance Period.
(e) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii)
and (iv), each Note certificate evidencing the Global Notes (and all
Notes issued in exchange therefor or in substitution thereof) will bear
the Private Placement Legend in substantially the following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED
INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, (5) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS) OR (6) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES
31
ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE
STATES OF THE UNITED STATES.
Each Global Note will also hear the Global Note Legend in substantially
the following form:
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER
ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS
HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE,
(II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART
PURSUANT TO SECTION 2.06(c) OF THE INDENTURE, (III) THIS GLOBAL NOTE
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
Each Definitive Note will also bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Note) pursuant to Rule 144, the Registrar will permit the transferee
thereof to exchange such Transfer Restricted Security for a
certificated Note that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer Restricted
Security, if the transferor thereof certifies in writing to the
Registrar that such sale or transfer was made in reliance on Rule 144
(such certification to be in the form set forth on the reverse of the
Note).
(iii) After a transfer of any Initial Notes pursuant to and during
the period of the effectiveness of a Shelf Registration Statement with
respect to such Initial Notes, all requirements pertaining to legends
relating to the restrictions on transfer relating to the Securities Act
on such Initial Note will cease to apply, the requirements requiring
that any such Initial Note issued to certain Holders be issued in
global form will cease to apply, and a certificated Initial Note or an
Initial Note in global form, in each case without restrictive transfer
legends, will be available to the transferee of the Holder of such
Initial Notes upon exchange of such transferring Holder's certificated
Initial Note or appropriate directions to transfer such Holder's
interest in the Global Note, as applicable.
(iv) Upon the consummation of an Exchange Offer with respect to
the Initial Notes, all requirements pertaining to such Initial Notes
that Initial Notes issued to certain
32
Holders be issued in global form will still apply with respect to
Holders of Such Initial Notes that do not exchange their Initial Notes,
and Exchange Notes in certificated or global form, in each case without
the restrictive securities legend relating to the restrictions on
transfer relating to the Securities Act set forth in Exhibit A hereto
will be available to Holders that exchange such Initial Notes in such
Exchange Offer.
(f) Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have been exchanged for Definitive Notes
or a particular Global Note has been redeemed, purchased or canceled, each such
Global Note will be returned to or retained and canceled by the Trustee. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for certificated Notes, redeemed, purchased or canceled, the principal
amount of Notes represented by such Global Note will be reduced and an
adjustment will be made on the books and records of the Trustee (if it is then
the Notes Custodian for such Global Note) with respect to such Global Note, by
the Trustee or the Notes Custodian, to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company will execute and the Trustee will authenticate Definitive Notes
and Global Notes upon receipt of an Authentication Order in accordance
with Section 2.02 or at the Registrar's or co-registrar's request.
(ii) No service charge will be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.15 and
9.05 of this Indenture).
(iii) Prior to the due presentation for registration of transfer
of any Note, the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar may deem and treat the person in whose name a Note
is registered as the absolute owner of such Note for the purpose of
receiving payment of principal of, interest, premium and Liquidated
Damages, if any, on such Note and for all other purposes whatsoever,
whether or not such Note is overdue, and none of the Company, the
Trustee, the Paying Agent, the Registrar or any co-registrar will be
affected by notice to the contrary.
(iv) Neither the Registrar nor the Company will be required:
(A) to issue, to register the transfer of or to Exchange any
Notes during a period beginning at the opening of business 15 days
before the day of any selection of Notes for redemption under
Section 3.02 hereof and ending at the close of business on the day
of selection;
(B) to register the transfer of or to exchange any Note
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part; or
33
(C) to register the transfer of or to exchange a Note between
a record date and the next succeeding interest payment date.
(v) All Notes issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be
entitled to the same benefits under this Indenture as the Notes
surrendered upon such transfer or exchange.
(vi) The Trustee will authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.02 hereof.
(h) No Obligation of the Trustee.
(i) The Trustee will have no responsibility or obligation to any
Beneficial Owner of a Global Note, a Participant in the Depositary or
other Person with respect to the accuracy of the records of the
Depositary or its nominee or of any Participant, with respect to any
ownership interest in the Notes or with respect to the delivery to any
Participant, Beneficial Owner or other Person (other than the
Depositary) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Notes. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Notes will be given or made only to or upon
the order of the registered Holders (which will be the Depositary or
its nominee in the case of a Global Note). The rights of Beneficial
Owners in any Global Note will be exercised only through the Depositary
subject to the applicable rules and procedures of the Depositary. The
Trustee may rely and will be fully protected in relying upon
information furnished by the Depositary with respect to its
Participants and any Beneficial Owners.
(ii) The Trustee will 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 Note (including any transfers
between or among Participants or Beneficial Owners in any Global Note)
other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if
and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with
the express requirements hereof.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company will issue and the Trustee, upon the written
order of the Company signed by one Officer of the Company, will authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company and the Trustee may
charge for their expenses in replacing a Note.
34
Every replacement Note is an additional obligation of the Company
and will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay all principal, interest, premium and Liquidated Damages, if
any, on that date with respect to the Notes, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company, will
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee will be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee knows are so owned will
be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee will authenticate temporary Notes upon a
written order of the Company signed by one Officer of the Company. Temporary
Notes will be substantially in the form of Definitive Notes but may have
variations that the Company considers appropriate for temporary Notes and that
are reasonably acceptable to the Trustee. Without unreasonable delay, the
Company will prepare and the Trustee will authenticate Notes in exchange for
temporary Notes.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for
35
registration of transfer, exchange or payment. The Trustee and no one else will
cancel all Notes surrendered for registration of transfer, exchange, payment,
replacement or cancellation and will destroy canceled Notes (subject to the
record retention requirement of the Exchange Act). Certification of the
destruction of all canceled Notes will be delivered to the Company. The Company
may not issue new Notes to replace Notes that it has redeemed, paid or delivered
to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
will pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date; provided that no such special record date
will be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of defaulted
interest to be paid.
Section 2.13 CUSIP Numbers.
The Company in issuing the Notes may use CUSIP numbers (if then
generally in use), and, if so, the Trustee will use CUSIP numbers in notices of
redemption as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption will not be affected by any defect in or omission
of such numbers. The Company will promptly notify the Trustee of any change in
the CUSIP numbers.
Section 2.14 Issuance of Additional Notes.
The Company will be entitled, subject to its compliance with
Section 4.09 hereof, to issue Additional Notes under this Indenture with
identical terms as the Initial Notes issued on the Issue Date, other than with
respect to the date of issuance and issue price. The Initial Notes issued on the
Issue Date, any Additional Notes and all Exchange Notes issued in exchange
therefor will be treated as a single class for all purposes under this
Indenture.
With respect to any Additional Notes, the Company will set forth
in a resolution of the Board of Directors of the Company and an Officers'
Certificate, copies of which will be delivered to the Trustee, the following
information:
(i) the aggregate principal amount of such Additional Notes to be
authenticated and delivered pursuant to this Indenture;
(ii) the issue price, the issue date and the CUSIP number of such
Additional Notes; provided, however, that no Additional Notes may be
issued at a price that would
36
cause such Additional Notes to have "original issue discount" within
the meaning of Section 1273 of the Internal Revenue Code of 1986, as
amended; and
(iii) whether such Additional Notes will be Transfer Restricted
Securities or will be issued in the form of Exchange Notes.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it will furnish to the Trustee, at
least 45 days before a redemption date, an Officers' Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption will occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption prices.
Section 3.02 Selection of Notes to be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in
an offer to purchase at any time, the Trustee will select Notes for redemption
or purchase as follows: (i) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed or (ii) if the Notes are not
so listed on a national securities exchange, on a pro rata basis, by lot or by
such method as the Trustee deems fair and appropriate; provided that no Notes of
$1,000 or less will be redeemed in part.
The Trustee will promptly notify the Company in writing of the
Notes selected for redemption or purchase and, in the case of any Note selected
for partial redemption or purchase, the principal amount thereof to be redeemed
or purchased. Notes and portions of Notes selected will be in amounts of $1,000
or whole multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, will be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company will mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Article 8 or 11 hereof.
37
The notice will identify the Notes to be redeemed (including CUSIP
Numbers, if any) and will state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(vi) that on the redemption date and, if applicable, upon the
satisfaction of any conditions to such redemption set forth in such
notice of redemption, the redemption price will become due and payable
upon each such Note or portion thereof, and that, unless the Company
defaults in making such redemption payment, interest on Notes called
for redemption ceases to accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and
(viii) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Subject to the immediately following sentence, once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may, at the Company's discretion, be
subject to one or more conditions precedent.
Section 3.05 Deposit of Redemption or Purchase Price.
Prior to 10:00 a.m. on the Business Day prior to the redemption
date, the Company will deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption or purchase price of and accrued interest on
all Notes to be redeemed or purchased on that date. The Trustee or the Paying
Agent will promptly return to the Company any money
38
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest will cease to
accrue on the Notes or the portions of Notes called for redemption or purchase.
If a Note is redeemed or purchased on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest
will be paid to the Person in whose name such Note was registered at the close
of business on such record date. If any Note called for redemption or purchase
is not so paid upon surrender for redemption or purchase because of the failure
of the Company to comply with the preceding paragraph, interest will be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part,
the notice of redemption that relates to that Note will state the portion of the
principal amount of that Note that is to be redeemed or purchased. A new Note in
principal amount equal to the unredeemed portion of the original Note will be
issued in the name of the Holder upon cancellation of the original Note.
Section 3.07 Optional Redemption.
(a) At any time prior to April 1, 2007, the Company may on any one
or more occasions redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption price of 109.250% of the principal
amount, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings by
the Company or from the cash contribution of equity capital (other than
Disqualified Stock) to the Company; provided that:
(i) at least 65% of the aggregate principal amount of Notes
(including Additional Notes, if any) issued under this Indenture
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and
(ii) the redemption occurs within 90 days of the date of the
closing of such Equity Offering.
Notice of any redemption upon an Equity Offering may be given
prior to completion of the related Equity Offering, and any such notice or
redemption may, at the Company's discretion, be subject to the satisfaction of
one or more conditions precedent, including, but not limited to, the completion
of the related Equity Offering.
(b) At any time prior to April 1, 2009, the Company may also
redeem all or a part of the Notes, upon not less than 30 nor more than 60 days'
notice mailed by first class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount
39
of Notes redeemed plus the Applicable Premium as of, and accrued and unpaid
interest and Liquidated Damages, if any, to the date of redemption (the
"Redemption Date").
(c) Except pursuant to Sections 3.07(a) and 3.07(b) hereof, the
Notes will not be redeemable at the Company's option prior to April 1, 2009.
(d) After April 1, 2009, the Company may redeem all or a part of
the Notes upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
redeemed, to the applicable redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), if redeemed during the twelve-month period beginning on
April 1 of the years indicated below:
Year Percentage
2009........................................ 104.625%
2010........................................ 103.083%
2011 ....................................... 101.542%
2012 and thereafter......................... 100.000%
(e) Any redemption pursuant to this Section 3.07 will be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make any mandatory redemption or
sinking fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application: of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer will be made to all Holders and all holders
of other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not longer than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than five Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased will be made in the same manner as interest payments are
made.
40
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will
send, by first class mail, a notice to the Trustee and each of the Holders. The
notice will contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
will be made to all Holders. The notice, which will govern the terms of the
Asset Sale Offer, will state:
(i) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer will remain open;
(ii) the Offer Amount, the purchase price and the Purchase Date;
(iii) that any Note not tendered or accepted for payment will
continue to accrue interest;
(iv) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer will cease
to accrue interest after the Purchase Date;
(v) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may elect to have Notes purchased in integral
multiples of $1,000 only;
(vi) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer will be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
Depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(vii) that Holders will be entitled to withdraw their election if
the Company, the Depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
facsimile transmission or letter setting forth the name of the Holder,
the principal amount of the Note the Holder delivered for purchase and
a statement that such Holder is withdrawing its election to have such
Note purchased;
(viii) that, if the aggregate principal amount of Notes and other
pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
41
(ix) that Holders whose Notes were purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company will, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof and other pari passu Indebtedness
tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has
been tendered, all Notes and other pari passu Indebtedness tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as
the case may be, will promptly (but in any case not later than five days after
the Purchase Date) mail or deliver to each tendering Holder an amount equal to
the purchase price of the Notes tendered by such Holder and accepted by the
Company for purchase, and the Company will promptly issue a new Note and the
Trustee, upon written request from the Company, will authenticate and mail or
deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted will be
promptly mailed or delivered by the Company to the Holder thereof. The Company
will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 will be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company shall pay or cause to be paid the principal of,
interest, premium and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, interest, premium and Liquidated
Damages, if any, shall be considered paid on the date due if the Paying Agent.
If other than the Company or a Subsidiary thereof holds, as of 10:00 a.m.
Eastern Time on the due date, money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, interest
and premium, if any, then due. The Company shall pay all Liquidated Damages, if
any, in the same manner on the dates and in the amounts set forth in the
Registration Rights Agreement.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1.0% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City
of New York or Chicago, Illinois, an office or agency (which may be an office of
the Trustee or an affiliate of
42
the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York or in Chicago, Illinois, for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Trustee for mailing to the Holders, within the time periods specified in the
Commission's rules and regulations:
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms 10-Q
and 10-K if the Company were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information
only, a report on the annual financial statements by the Company's
certified independent accountants; and
(ii) all current reports that would be required to be filed with
the Commission on Form 8-K if the Company were required to file such
reports.
If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by clause (i) hereof shall include a reasonably detailed presentation,
either on the face of the financial statements or in the footnotes thereto, and
in the "Management's Discussion and Analysis of Financial Condition and Results
of Operations," of the financial condition and results of operations of the
Company and its Restricted Subsidiaries separate from the financial condition
and results of operations of the Unrestricted Subsidiaries of the Company.
(b) Following the consummation of the Exchange Offer contemplated
by the Registration Rights Agreement, whether or not required by the Commission,
the Company shall file a copy of all of the information and reports referred to
in Sections 4.03(a)(i) and (ii) hereof with the Commission for public
availability within the time periods specified in the Commission's rules and
regulations (unless the Commission will not accept such a filing) and
43
make such information available to prospective investors upon request. The
Company shall at all times comply with TIA ss. 314(a).
(c) The Company and the Guarantors shall furnish to the Holders
and to prospective investors, upon the request of such Holders, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long as the Notes are not freely transferable under the Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such
Guarantor is so required under the TIA) shall deliver to the Trustee, within 90
days after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default has occurred, describing all
such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, interest,
premium and Liquidated Damages, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is
taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) hereof shall be accompanied by
a written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, promptly upon any Officer becoming aware of
any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.05 Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are
44
contested in good faith and by appropriate proceedings or where the failure to
effect such payment is not adverse in any material respect to the Holders.
Section 4.06 Stay, Extension and Usury Laws.
Each of the Company and the Guarantors covenants (to the extent
that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and each of
the Company and the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other payment or distribution (A) on account of the
Company's or any of its Restricted Subsidiaries' Equity Interests (including,
without limitation, any payment in connection with any merger or consolidation
involving the Company or any of its Restricted Subsidiaries) or (B) to the
direct or indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such, other than dividends
or distributions (1) payable in Equity Interests (other than Disqualified Stock)
of the Company or (2) to the Company or a Restricted Subsidiary of the Company;
(ii) purchase, redeem or otherwise acquire or retire for value (including,
without limitation, in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company; (iii) make any payment on or with
respect to, or purchase, redeem, defease or otherwise acquire or retire for
value, any Indebtedness that is subordinated to the Notes or the Subsidiary
Guarantees (excluding any intercompany Indebtedness between the Company and any
of its Restricted Subsidiaries), except a payment of interest or principal at
Stated Maturity thereof; or (iv) make any Restricted Investment (all such
payments and other actions set forth in clauses (i) through (iv) hereof being
collectively referred to as "Restricted Payments"); unless, at the time of and
after giving effect to such Restricted Payment:
(A) no Default or Event of Default has occurred and is continuing
or would occur as a consequence of such Restricted Payment; and
(B) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.09(a) hereof; and
(C) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue
45
Date (excluding Restricted Payments permitted by clauses (ii), (iii),
(iv), (vi), (vii), (viii), (ix) and (x) of Section 4.07(b) hereof), is
less than the sum, without duplication of:
(I) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) from the beginning of the
fiscal quarter in which the Issue Date occurs to the end of the
Company's most recently ended fiscal quarter 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
(II) 100% of the fair market value of the aggregate net
proceeds received by the Company since the Issue Date as a
contribution to its common equity capital or from the issue or
sale of Equity Interests of the Company (other than Disqualified
Stock) or from the issue or sale of convertible or exchangeable
Disqualified Stock or convertible or exchangeable debt securities
of the Company that have been converted into or exchanged for such
Equity Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the Company),
provided that such aggregate net proceeds are limited to cash and
Cash Equivalents and other assets used or useful in a Permitted
Business or the Capital Stock of a Person engaged in a Permitted
Business, plus
(III) the sum of (1) the aggregate amount returned in cash on
or with respect to any Restricted Investment in or to a Person
that was made after the Issue Date whether through interest
payments, principal payments, dividends or other distributions or
payments, plus (2) the net cash proceeds received by the Company
or any of its Restricted Subsidiaries from the disposition of all
or any portion of such Restricted Investment, provided, however,
that the sum of clauses (1) and (2) above shall not exceed the sum
of (I) the aggregate amount of all such Restricted Investments
made in or to such Person subsequent to the Issue Date and (II)
without duplication of clause (I), one half of the gain from any
disposition of all or any portion of such Restricted Investments
made subsequent to the Issue Date, plus
(IV) to the extent that after the Issue Date, any
Unrestricted Subsidiary of the Company is redesignated as a
Restricted Subsidiary or is merged, consolidated or amalgamated
with or into or transfers or conveys assets to, or is liquidated
into the Company or any of its Restricted Subsidiaries, the lesser
of (1) the fair market value of the Company's Investment in such
Subsidiary as of the date of such redesignation, merger,
consolidation or amalgamation (or of the assets transferred or
conveyed, as applicable) and (2) such fair market value as of the
date on which such Subsidiary was originally designated as an
Unrestricted Subsidiary; plus
(V) $7,500,000.
(b) The provisions of Section 4.07(a) shall not prohibit:
46
(i) the payment of any dividend or the consummation of any
irrevocable redemption of debt that is subordinate to the Notes within
60 days after the date of declaration of the dividend or giving of any
such redemption notice, as the case may be, if at said date of
declaration or notice the dividend or redemption payment would have
complied with the provisions of this Indenture;
(ii) the redemption, repurchase, retirement or other acquisition
of subordinated Indebtedness of the Company or any Guarantor or of any
Equity Interests of the Company in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a
Subsidiary of the Company) of, Equity Interests of the Company (other
than Disqualified Stock); provided that the amount of any such net cash
proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from
clause (C)(II) of Section 4.07(a) hereof;
(iii) the defeasance, redemption, repurchase or other acquisition
of subordinated Indebtedness of the Company or any Guarantor with the
net cash proceeds from an incurrence of Permitted Refinancing of
Indebtedness;
(iv) so long as no Default or Event of Default has occurred and is
continuing, the payment of any dividend by a Restricted Subsidiary of
the Company to the holders of its Equity Interests on a pro rata basis;
(v) so long as no Default or Event of Default has occurred and is
continuing, the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests of the Company or any
Restricted Subsidiary of the Company (A) held by any current or former
director, officer or employee of the Company or any of its Restricted
Subsidiaries (or permitted transferees of such directors, officers or
employees) and (B) in the open market to the extent such shares are
acquired to satisfy a current obligation to deliver shares in
connection with the exercise of stock options or similar rights or the
matching contributions under any 401(k) plan subject to the provisions
of Section 401 of the Internal Revenue Code of 1986, as amended, in
each case pursuant to the terms of the agreements (including any equity
subscription agreement, stock option agreement, shareholders'
agreement, employment agreement or similar agreement) or plans (or
amendments thereto); provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests may
not in any fiscal year exceed $3,000,000 unless the aggregate amount of
such repurchases, redemptions, acquisitions and retirement in any
fiscal year was less than $3,000,000 in which case the Company may
carry-forward the unused amounts to the immediately succeeding fiscal
year; provided, however, the aggregate price paid for all such
repurchased, redeemed, acquired or retired Equity Interests may not
exceed $6,000,000 in any one fiscal year;
(vi) the repurchase of Equity Interests deemed to occur upon the
exercise of stock options to the extent such Equity Interests represent
a portion of the exercise price of those stock options;
(vii) the declaration and payment of dividends to holders of any
class or series of Disqualified Stock of the Company or preferred stock
of any Restricted Subsidiary of
47
the Company issued on or after the Issue Date in accordance with the
Fixed Charge Coverage Ratio test described in Section 4.09(a) hereof to
the extent such dividends are included in the definition of "Fixed
Charges"; provided that no Default or Event of Default shall have
occurred and be continuing immediately after making such Restricted
Payment;
(viii) so long as no Default or Event of Default has occurred and
is continuing, the purchase by the Company of fractional shares arising
out of stock dividends, splits or combinations or business
combinations;
(ix) so long as no Default or Event of Default has occurred and is
continuing, the repurchase, redemption or other acquisition of the
Company's issued and outstanding common stock pursuant to the Company's
stock repurchase program as in effect from time to time in an amount
not to exceed $10,000,000; and
(x) so long as no Default or Event of Default has occurred and is
continuing, other Restricted Payments since the Issue Date in an
aggregate amount not to exceed $12,500,000.
The amount of all Restricted Payments (other than cash) shall be
the fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 shall be determined by the Board of Directors of the
Company, whose good faith determination shall be conclusive and shall be
delivered to the Trustee. Such Board of Director's determination must be based
upon an opinion or appraisal issued by an accounting, appraisal or investment
bank firm of national standing if the fair market value exceeds $10,000,000. Not
later than the last day of each fiscal quarter in which any Restricted Payment
was made, the Company shall deliver to the Trustee an Officers' Certificate
stating that each Restricted Payment made in such fiscal quarter is permitted
and setting forth the basis upon which the calculations required by this Section
4.07 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
48
(iii) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) hereof shall not apply to
encumbrances or restrictions existing under or by reason of:
(i) agreements governing Existing Indebtedness and Credit
Facilities as in effect on the Issue Date and any amendments,
modifications, restatements, renewals, increases, supplements,
refundings, restructurings, replacements or refinancings of those
agreements; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, restructurings,
replacements or refinancings are not materially more restrictive, taken
as a whole, with respect to such dividend and other payment
restrictions than those contained in those agreements on the Issue
Date;
(ii) this Indenture, the Notes, the Exchange Notes and the related
Subsidiary Guarantees;
(iii) applicable law, rule, regulation or order;
(iv) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition or assumed by the Company or
any of its Restricted Subsidiaries in connection with an acquisition of
all or substantially all of the assets of a Person (except to the
extent such Indebtedness or Capital Stock was incurred or assumed in
connection with or in contemplation of such acquisition), 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, provided that, in the
case of Indebtedness, such Indebtedness was permitted by the terms of
this Indenture to be incurred;
(v) customary non-assignment provisions in leases, licenses or
other contracts entered into in the ordinary course of business and
consistent with past practices;
(vi) purchase money obligations for property acquired in the
ordinary course of business and Capital Lease Obligations permitted
under this Indenture that impose restrictions of the nature described
in Section 4.08(a)(iii) hereof on the property purchased or leased;
(vii) any agreement for the sale or other disposition of a
Restricted Subsidiary of the Company that restricts distributions by
that Restricted Subsidiary pending its sale or other disposition;
(viii) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
49
(ix) Liens securing Indebtedness otherwise permitted to be
incurred under Section 4.12 hereof that limit the right of the debtor
to dispose of the assets subject to such Liens;
(x) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, asset sale agreements,
sale-leaseback agreements, stock sale agreements and other similar
agreements entered into in the ordinary course of business; and
(xi) restrictions on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of
business.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, Guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company and any
Guarantor may incur Indebtedness (including Acquired Debt), the Company may
issue Disqualified Stock or any Guarantor may issue preferred stock, if the
Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is to be
incurred or such Disqualified Stock or preferred stock is to be issued would
have been at least 2.25 to 1.0, if such incurrence is on or prior to October 1,
2005 and 2.50 to 1.0 if such incurrence is after October 1, 2005, determined, in
each case, on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or the
Disqualified Stock or preferred stock had been issued, as the case may be, at
the beginning of such four-quarter period.
(b) The provisions of Section 4.09(a) shall not prohibit the
incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company and/or any Guarantor of
additional Indebtedness and letters of credit under one or more Credit
Facilities in an aggregate principal amount, at any one time
outstanding under this clause (i) (with letters of credit being deemed
to have a principal amount equal to the maximum potential liability of
the Company and the Guarantors thereunder), not to exceed $75,000,000;
(ii) the incurrence by the Company and its Restricted Subsidiaries
of Existing Indebtedness;
(iii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Subsidiary
Guarantees issued on the Issue Date and Exchange Notes and the related
Subsidiary Guarantees to be issued pursuant to the Registration Rights
Agreement;
50
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital 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 design, construction, installation or improvement of
property, plant or equipment used in the business of the Company or
such Restricted Subsidiary, in an aggregate principal amount, including
all Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any other Indebtedness incurred pursuant to this clause (iv),
not to exceed $5,000,000 at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or
the net proceeds of which are used to refund, refinance or replace,
Indebtedness (other than intercompany Indebtedness) that was permitted
by this Indenture to be incurred under Section 4.09(a) hereof or clause
(ii), (iii) or (v) of this Section 4.09(b);
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Restricted Subsidiaries; provided, however, that:
(A) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to
the prior payment in full in cash of all Obligations then due with
respect to the Notes, in the case of the Company, or the
Subsidiary Guarantee, in the case of a Guarantor; and
(B) (I) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held by a
Person other than the Company or a Restricted Subsidiary of the
Company and (II) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a
Restricted Subsidiary of the Company shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the
Company or such Restricted Subsidiary, as the case may be, that
was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Subsidiaries of
Hedging Obligations;
(viii) the Guarantee by the Company or any of the Guarantors of
Indebtedness of the Company or any Guarantor that was permitted to be
incurred by another provision of this Section 4.09;
(ix) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (ix);
(x) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in respect of workers' compensation
claims, self-insurance obligations,
51
bankers' acceptances, and performance and surety bonds and completion
guarantees in the ordinary course of business;
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds, so long as such
Indebtedness is covered within five business days;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness consisting of guarantees, indemnities,
holdbacks or obligations in respect of purchase price adjustments in
connection with the acquisition or disposition of assets; provided,
however, that such Indebtedness is not reflected on the balance sheet
of the Company or any Restricted Subsidiary; and
(xiii) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time outstanding,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(xiii), not to exceed $20,000,000.
The accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness in the form of
additional Indebtedness with the same terms, the accumulation of dividends on
Disqualified Stock or preferred stock (to the extent not paid) and the payment
of dividends on Disqualified Stock or preferred stock in the form of additional
shares of the same class of Disqualified Stock or preferred stock shall not be
deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
or preferred stock for purposes of this Section 4.09; provided, in each such
case, that the amount thereof is included in Fixed Charges of the Company as
accrued.
Notwithstanding anything to the contrary in this Section 4.09, in
no event will the Company or any of its Restricted Subsidiaries be permitted to
refinance the Convertible Senior Subordinated Notes, in whole or in part, with
the proceeds of Senior Debt.
For purposes of determining compliance with this Section 4.09, in
the event that an item of Indebtedness (including Acquired Debt) meets the
criteria of more than one of the categories of Permitted Debt described in
clauses (i) through (xiii) of Section 4.09(b) hereof, or is entitled to be
incurred pursuant to Section 4.09(a) hereof, the Company shall be permitted to
divide and classify (or later classify or reclassify) in whole or in part, in
its sole discretion, such item of Indebtedness in any manner that complies with
this Section 4.09.
Notwithstanding anything to the contrary contained in this Section
4.09, any increase in the amount of Indebtedness solely by reason of currency
fluctuation shall not be considered an incurrence of Indebtedness for purposes
of this Section 4.09. For purposes of determining compliance with this Section
4.09, the U.S. dollar-equivalent principal amount of Indebtedness denominated in
any currency other than U.S. dollars shall be calculated based on the relevant
currency exchange rate in effect as of the date such Indebtedness is incurred.
52
Section 4.10 Asset Sales.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:
(i) the Company (or its 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 or Equity Interests issued or sold
or otherwise disposed of;
(ii) the fair market value is determined by the Company's Board of
Directors and evidenced by resolution of such Board of Directors set
forth in an Officer's Certificate delivered to the Trustee; and
(iii) at least 75% of the consideration received in the Asset Sale
by the Company or such Restricted Subsidiary is in the form of cash or
Cash Equivalents. For purposes of this provision, each of the following
shall be deemed to be cash:
(A) any liabilities, as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet, of the Company
or any Restricted Subsidiary (other than contingent liabilities
and liabilities that are by their terms subordinated to the Notes
or any Subsidiary Guarantee) that are assumed by the transferee of
any such assets as a result of which assumption the Company or
such Restricted Subsidiary is released from further liability;
(B) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such transferee
that are within 90 days of such Asset Sale converted into cash by
the Company or such Restricted Subsidiary, to the extent of the
cash received in that conversion; and
(C) any stock or assets of the kind referred to in clause
(ii) or (iv) of Section 4.10(b) hereof
(b) Within 360 days after the receipt of any Net Proceeds from an
Asset Sale, the Company (or the applicable Restricted Subsidiary, as the case
may be) may apply those Net Proceeds, at its option:
(i) to repay secured Indebtedness of the Company or any Guarantor
under a Credit Facility;
(ii) to acquire (or enter into a binding agreement to acquire;
provided that such commitment shall be subject only to customary
conditions (other than financing) and such acquisition shall be
consummated within 90 days after the end of such 360-day period) all or
substantially all of the assets of, or a majority of the Voting Stock
of, another Permitted Business;
(iii) to make a capital expenditure; or
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(iv) to acquire (or enter into a binding agreement to
acquire; provided that such commitment shall be subject only to
customary conditions (other than financing) and such acquisition
shall be consummated within 90 days after the end of such 360-day
period) other long-term assets that are used or useful in a
Permitted Business or the minority interest in any Restricted
Subsidiary that is not a Wholly-Owned Restricted Subsidiary.
Pending the final application of any such Net Proceeds, the
Company may temporarily reduce revolving credit borrowings or otherwise invest
such Net Proceeds in any manner that is not prohibited by this Indenture.
(c) Any Net Proceeds from Asset Sales that are not applied or
invested as provided in Section 4.10(b) hereof shall constitute "Excess
Proceeds". When the aggregate amount of Excess Proceeds exceeds $5,000,000, the
Company shall make an Asset Sale Offer to all Holders and all holders of other
Indebtedness that is pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers to purchase or redeem
with the proceeds of sales of assets to purchase the maximum principal amount of
Notes and such other pari passu Indebtedness that may be purchased out of the
Excess Proceeds. The offer price in any Asset Sale Offer shall be equal to 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of purchase, and shall be payable in cash. If any Excess
Proceeds remain after consummation of an Asset Sale Offer, the Company may use
such Excess Proceeds for any purpose not otherwise prohibited by this Indenture.
If the aggregate principal amount of Notes and other pari passu Indebtedness
tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes and other pari passu Indebtedness to be purchased
on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
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 those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with Section 3.09
hereof or this Section 4.10, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under Section 3.09 hereof or this Section 4.10 by virtue of such
conflict.
Section 4. 11 Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or Guarantee with, or for the
benefit of, any Affiliate (each, an "Affiliate Transaction"), unless:
(i) such Affiliate Transaction is on terms that are no less
favorable to the Company or the relevant Restricted Subsidiary than
those that would have been obtained in a comparable transaction by the
Company or such Restricted Subsidiary with a Person who was not an
Affiliate; and
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(ii) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration
in excess of $5,000,000, a resolution of the Board of Directors of
the Company set forth in an Officers' Certificate certifying that
such Affiliate Transaction complies with this Section 4.11 and
that such Affiliate Transaction has been approved by a majority of
the disinterested members of the Board of Directors of the
Company; and
(B) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration
in excess of $10,000,000, a written opinion from an independent
investment banking, accounting or appraisal firm of nationally
recognized standing to the effect that such Affiliate Transaction
is fair, from a financial standpoint, to the Company and its
Restricted Subsidiaries or not materially less favorable to the
Company and its Restricted Subsidiaries than could reasonably be
expected to be obtained at the time in an arm's-length transaction
with a Person who was not an Affiliate.
(b) The foregoing provisions shall not be deemed to be Affiliate
Transactions and, therefore, shall not be subject to the provisions of Section
4.11(a) hereof
(i) any employment agreements or arrangements, employee benefit
plans or arrangements, officer and director indemnification agreements
or arrangements or other similar agreements or arrangements entered
into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business;
(ii) transactions between or among the Company and/or its
Restricted Subsidiaries;
(iii) transactions with a Person that is an Affiliate of the
Company solely because the Company or any of its Restricted
Subsidiaries owns an Equity Interest in, or controls, such Person;
(iv) payment of reasonable directors' fees and indemnity provided
on behalf of officers, directors or employees of the Company or any of
its Restricted Subsidiaries;
(v) any issuance or sale of Equity Interests (other than
Disqualified Stock) to Affiliates of the Company;
(vi) Permitted Investments and Restricted Payments that are
permitted by the provisions of this Indenture described in Section 4.07
hereof,
(vii) the issuance of securities or other payments, awards or
grants in cash, securities or otherwise pursuant to, or funding of,
employment arrangements, stock options and stock ownership plans or
similar employee benefit plans approved by the Board of Directors of
the Company in good faith and loans to employees of the Company and its
Subsidiaries that are approved by the Board of Directors of the Company
in good faith; and
55
(viii) transactions with customers, clients, suppliers or
purchasers or sellers of goods or services, in each case on ordinary
business terms consistent with past practices 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 or senior management of the Company, or are
on terms at least as favorable as could reasonably have been obtained
at such time from a Person that is not an Affiliate of the Company or
any of its Restricted Subsidiaries.
Section 4.12 Liens.
The Company shall not and shall not permit any of its Restricted
Subsidiaries to create, incur, assume or otherwise cause or suffer to exist or
become effective any Lien of any kind (other than Permitted Liens) securing
Indebtedness or trade payables upon any of their property or assets, now owned
or hereafter acquired, unless all payments due under this Indenture and the
Notes are secured on an equal and ratable basis (or on a senior basis to, in the
case of Obligations subordinated in right or payment to the Notes) with the
Obligations so secured until such time as such Obligations are no longer secured
by a Lien.
Section 4.13 Business Activities.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Subsidiaries
taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents
(as the same may be amended from time to time) of the Company or any such
Subsidiary and (ii) the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided, however, that the Company shall
not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors determines that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
Section 4.15 Offer to Repurchase upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder shall
have the right to require the Company to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of such Holder's Notes pursuant to the
offer described below (the "Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount of Notes repurchased plus
accrued and unpaid interest and Liquidated Damages, if any, on the Notes
repurchased to the date of purchase (the "Change of Control Payment"). Within 30
days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes on the date specified in such notice,
which date shall be no earlier than 30 days and no later than
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60 days from the date such notice is mailed (the "Change of Control Payment
Date"). Such notice, which shall govern the terms of the Change of Control
Offer, shall state: (i) that the Change of Control Offer is being made pursuant
to this Section 4.15 and that all Notes tendered shall be accepted for payment;
(ii) the purchase price and the purchase date; (iii) that any Note not tendered
shall continue to accrue interest and Liquidated Damages, if any; (iv) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes 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 any Notes purchased pursuant to a Change of Control Offer shall
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (vi) that Holders
shall be entitled to withdraw their election if the Paying Agent receives, not
later than the close of business on the second Business Day preceding the Change
of Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (vii) that Holders whose Notes are being purchased
only in part shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. 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 the repurchase of Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Section
4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.15 by virtue of such conflict.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful:
(i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer;
(ii) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions of Notes
properly tendered; and
(iii) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions of Notes being
purchased by the Company.
The Paying Agent shall promptly mail to each Holder of Notes that
are properly tendered, the Change of Control Payment for such Notes, and the
Trustee shall promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that each such new Note shall
be in a principal amount of $1,000 or an integral multiple of $1,000. The
Company shall publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
57
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.15 and purchases all Notes properly tendered and not withdrawn
under the Change of Control Offer or (2) a notice of redemption is outstanding
pursuant to Section 3.07 hereof, unless and until there is a default in payment
of the applicable redemption price.
(d) A Change of Control Offer may be made in advance of a Change
of Control, and conditioned upon such Change of Control, if a definitive
agreement is in place for the Change of Control at the time of making of the
Change of Control Offer. Notes repurchased by the Company pursuant to a Change
of Control Offer shall have the status of Notes issued but not outstanding or
shall be retired and canceled, at the option of the Company. Notes purchased by
a third party pursuant to clause (c) of this Section 4.15 shall have the status
of Notes issued but not outstanding.
(e) The provisions described above that require the Company to
make a Change of Control Offer following a Change of Control shall be applicable
whether or not any other provisions of this Indenture are applicable.
Section 4.16 Payments for Consent.
The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder for or as an inducement to any
consent, waiver or amendment of any of the terms or provisions of this Indenture
or the Notes unless such consideration is offered to be paid and is paid to all
Holders 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 4.17 Additional Subsidiary Guarantees.
If (i) the Company or any of its Restricted Subsidiaries acquires
or creates another Domestic Subsidiary after the Issue Date that Guarantees any
Credit Facilities or (ii) any Foreign Subsidiary Guarantees any Credit
Facilities, then in each case such Subsidiary shall become a Guarantor and
execute a supplemental indenture substantially in the form of Exhibit B hereto
(and the form of Notation on Senior Note, attached hereto as Exhibit C) and
deliver an Opinion of Counsel satisfactory to the Trustee within 10 Business
Days of the date on which such Subsidiary executed the Guarantee with respect to
any such Credit Facilities and substantially to the effect that such Guarantee
is a legal, valid and binding obligation of such Subsidiary, enforceable in
accordance with its terms (subject to customary exceptions); provided, however,
that this Section 4.17 shall not apply to any Subsidiary that has been properly
designated as an Unrestricted Subsidiary in accordance with Section 4.18 hereof
for so long as such Subsidiary continues to constitute an Unrestricted
Subsidiary.
Section 4.18 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default or Event of
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Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary,
the aggregate fair market value of all outstanding Investments owned by the
Company and its Restricted Subsidiaries in the Subsidiary properly designated
shall be deemed to be an Investment made as of the time of the designation and
shall reduce the amount available for Restricted Payments under Section 4.07
hereof or under one or more clauses of the definition of Permitted Investments,
as determined by the Company. That designation shall only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of the Company may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if the redesignation would not cause a Default.
Section 4.19 Changes in Covenants When Notes Rated Investment Grade.
(a) During any period of time that the Notes have a rating equal
to or greater than BBB- by S&P and Baa3 by Xxxxx'x (each such rating, an
"Investment Grade Rating") and no Default or Event of Default has occurred and
is continuing, the Company and its Subsidiaries shall no longer be subject to
the provisions of the following covenants:
(i) Section 4.07 hereof;
(ii) Section 4.08 hereof;
(iii) Section 4.09 hereof;
(iv) Section 4.10 hereof;
(v) Section 4.11 hereof;
(vi) Section 4.13 hereof;
(vii) Section 4.15 hereof;
(viii) Section 4.16 hereof; and
(ix) Section 4.18 hereof.
(collectively, the "Suspended Covenants"), provided, however, that the
provisions of this Indenture described under the following sections shall not be
so terminated:
(i) Section 4.03 hereof;
(ii) Section 4.12 hereof,
(iii) Section 4.17 hereof; and
(iv) Section 5.01 hereof, provided, however, the Company shall no
longer be subject to clause (iv) of Section 5.01 hereof.
59
(b) In the event that the Company and any of its Subsidiaries are
not subject to the Suspended Covenants for any period of time as a result of
clause (a) of this Section 4.19 and that subsequently the Notes cease to have an
Investment Grade Rating from either S&P or Xxxxx'x, as a result of a downgrade,
withdrawal of rating or otherwise, then the Company and its Subsidiaries shall
from such time and thereafter again be subject to the Suspended Covenants.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation or Sale of Assets.
Neither the Company nor any of its Restricted Subsidiaries shall,
directly or indirectly, (a) consolidate or merge with or into another Person
(whether or not the Company or a Restricted Subsidiary of the Company is the
surviving corporation); or (b) sell, assign, transfer, convey or otherwise
dispose of all or substantially all of the properties or assets of the Company
and its Restricted Subsidiaries taken as a whole, in one or more related
transactions, to another Person, unless:
(i) either (A) the Company or any Restricted Subsidiary of the
Company is the surviving corporation or (B) the Person formed by or
surviving any such consolidation or merger (if other than the Company
or any Restricted Subsidiary of the Company) or to which such sale,
assignment, transfer, conveyance or other disposition has been made is
a corporation organized or existing under the laws of the United
States, any state of the United States or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company or any Restricted Subsidiary of the
Company) or the Person to which such sale, assignment, transfer,
conveyance or other disposition has been made assumes all the
obligations of the Company or its Restricted Subsidiaries, as
applicable under the Notes, this Indenture, the Registration Rights
Agreement and the Subsidiary Guarantee, if any, pursuant to agreements
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction, no Default or Event of
Default exists; and
(iv) in the case of the consolidation or merger of the Company or
the Person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer,
conveyance or other disposition has been made or, in the case of a
consolidation or merger of a Restricted Subsidiary of the Company or
the sale, assignment, transfer, conveyance or other disposition of the
property or assets of the Restricted Subsidiary, shall, in each case,
on the date of such transaction after giving pro forma effect thereto
and any related financing transactions as if the same had occurred at
the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness under the Fixed Charge
Coverage Ratio test in Section 4.09(a) hereof or have a Fixed Charge
Coverage Ratio calculated in accordance with Section 4.09(a) hereof
that is no less than the Fixed Charge Coverage Ratio of the Company of
the Company immediately prior to such transaction.
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Neither the Company nor any of its Restricted Subsidiaries may,
directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person.
Notwithstanding the foregoing:
(A) the Company or any of its Restricted Subsidiaries may
merge with an Affiliate that has no significant assets or
liabilities and was incorporated solely for the purpose of
reincorporating the Company or such Restricted Subsidiary in
another jurisdiction within the United States; and
(B) any Restricted Subsidiary of the Company may consolidate
with, merge into or transfer all or part of its properties and
assets to the Company or to a Subsidiary that is a Guarantor.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, be substituted for (so that from and after
the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of, interest, premium and Liquidated Damages, if
any, on the Notes except in the case of a sale of all of the Company's assets in
a transaction that meets the requirements of Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
An "Event of Default" occurs if:
(i) the Company defaults in the payment when due of interest on,
or Liquidated Damages, if any, with respect to, the Notes and such
default continues for a period of 30 days;
(ii) the Company defaults in the payment when due of the principal
of or premium, if any, on the Notes;
(iii) the Company or any of its Restricted Subsidiaries fails to
comply with any of the provisions of Section 4.10, 4.15 or 5.01 hereof;
61
(iv) the Company or any of its Restricted Subsidiaries fails to
comply with any of the other agreements in this Indenture or the Notes
for a period of 60 days after receipt of notice to comply;
(v) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Restricted Subsidiaries (or the payment of which is Guaranteed by
the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or Guarantee now exists, or is created after the Issue
Date, which default:
(A) is caused by a failure to pay principal of, or interest
or premium, if any, on such Indebtedness prior to the expiration
of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or
(B) results in the acceleration of such Indebtedness prior to
its Stated Maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which being
so accelerated, in either case aggregates $5,000,000 or more;
(vi) the Company or any of its Restricted Subsidiaries fails to
pay final judgments aggregating in excess of $5,000,000 (exclusive of
amounts covered by insurance), which judgments are not paid, discharged
or stayed for a period of 60 days;
(vii) except as permitted by this Indenture, any Subsidiary
Guarantee is held in any judicial proceeding to be unenforceable or
invalid or ceases 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;
(viii) the Company or any of its Restricted Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors or
(E) generally is not paying its debts as they become due; or
62
(ix) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary
in an involuntary case;
(B) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary
or for all or substantially all of the property of the Company or
any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary; or
(C) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Restricted Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (viii) or
(ix) of Section 6.01 hereof, with respect to the Company or any Significant
Subsidiary, all outstanding Notes will become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all the Notes to be due and payable
immediately.
However, a Default under clause (iv) or (v) above will not
constitute an Event of Default until the Trustee or the Holders of 25% in
aggregate principal amount of the outstanding Notes notify the Company of the
Default and the Company does not cure such Default within the time specified
after receipt of such notice.
In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, an equivalent premium will also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs prior to April 1, 2009 by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Notes prior
to that date, then the premium specified in this Indenture with respect to the
first year that the Notes may be redeemed at the Company's option will also
become immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, interest,
premium and Liquidated
63
Damages, if any, on the Notes or to enforce the performance of any provision of
the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default will not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences hereunder, except a continuing Default or Event of Default in
the payment of the principal of, interest, premium or Liquidated Damages, if
any, on the Notes; provided that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration, if the rescission would not conflict with any judgment or decree
or if all existing Events of Default have been cured or waived. Upon any such
waiver, such Default will cease to exist, and any Event of Default arising
therefrom will be deemed to have been cured for every purpose of this Indenture;
but no such waiver will extend to any subsequent or other Default or impair any
right consequent thereon.
In the event an Event of Default described under (vi)(a) of
Section 6.01 hereof has occurred and is continuing, such Event of Default shall
be automatically annulled if the Payment Default triggering such Event of
Default under (vi) of Section 6.01 (a) hereof will be remedied or cured by the
Company or a Restricted Subsidiary of the Company or waived by the holders of
the relevant Indebtedness within 60 days of its occurrence and all other Events
of Default, if any, under this Indenture have been cured and waived.
Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding
Notes may direct the time, method and place of conducting any proceeding for
exercising 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 or that the Trustee determines may be
unduly prejudicial to the rights of other Holders or that may involve the
Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
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(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note 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 then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.07 Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder of a Note to receive payment of principal of, interest, premium
and Liquidated Damages, if any, on the Note, on or after the respective due
dates expressed in the Note (including in connection with an offer to purchase),
or to bring suit for the enforcement of any such payment on or after such
respective dates, will not be impaired or affected without the consent of such
Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(i) or (ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, interest, premium and Liquidated Damages, if any, remaining unpaid
on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as will 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 is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Notes), its creditors or its property and will be
entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee consents 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 agents and counsel and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under
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Section 7.07 hereof out of the estate in any such proceeding, is denied for any
reason, payment of the same will be secured by a Lien on, and will be paid out
of, any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained will be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it
will pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders for amounts due and unpaid on the Notes for
principal, interest, premium and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, interest, premium and
Liquidated Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction directs.
The Trustee may fix a record date and payment date for any payment
to Holders pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of
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care and skill in its exercise, as a prudent person would exercise or use under
the circumstances in the conduct of such person's affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee will be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations will be read into 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 furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities 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 Section 7.01(b)
hereof;
(ii) the Trustee will not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee will not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to Section
7.01(a), (b) and (c) hereof.
(e) No provision of this Indenture will require the Trustee to
expend or risk its own funds or incur any liability. The Trustee will be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder has offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee will 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 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon 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 such document.
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(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
will not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the advice of such counsel or any Opinion of Counsel
will be full and complete authorization and protection from liability in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and will
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee will not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders will have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) The Trustee will not be deemed to have notice of any Default
or Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
Default or Event of Default is received by the Trustee at the Corporate Trust
Office of the Trustee and such notice references the Notes and this Indenture.
(h) In the event the Trustee receives inconsistent or conflicting
requests and indemnity from two or more groups of Holders, each representing
less than a majority in aggregate principal amount of the Notes outstanding,
pursuant to the provisions of this Indenture, the Trustee, in its sole
discretion, may determine what action, if any, will be taken.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and will be enforceable by, the Trustee in
connection with the performance of its duties under this Indenture, and to each
agent, custodian and other Person employed to act hereunder.
Section 7.03 Individual Rights of Trustee.
The Trustee or any Affiliate of the Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee
acquires any conflicting interest, it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as Trustee or resign.
Any Agent may do the same with like rights and duties. The Trustee is also
subject to Sections 7.10 and 7.11 hereof.
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Section 7.04 Trustee's Disclaimers.
The Trustee will not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
will not be accountable for the Company's use of the proceeds from the Notes or
any money paid to the Company or upon the Company's direction under any
provision of this Indenture, it will not be responsible for the use or
application of any money received by any Paying Agent other than the Trustee and
it will not be responsible for any statement or recital herein or any statement
in the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee will mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, interest, premium
or Liquidated Damages, if any, on any Note, the Trustee may withhold from
Holders the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of the
Holders.
Section 7.06 Reports by Trustee to Holders.
(a) Within 60 days after each May 15 beginning with the May 15
following the Issue Date, and for so long as Notes remain outstanding, the
Trustee will mail to the Holders a brief report dated as of such reporting date
that complies with TIA ss. 313(a) (but if no event described in TIA ss. 313(a)
has occurred within the 12 months preceding the reporting date, no report need
be transmitted). The Trustee also will comply with TIA ss. 313(b)(2). The
Trustee will also transmit by mail all reports as required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the
Holders will be mailed to the Company and filed with the Commission and each
stock exchange on which the Notes are listed in accordance with TIA ss. 313(d).
The Company will promptly notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time such
compensation as the Company and the Trustee from time to time have agreed in
writing for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses will
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
(b) The Company will indemnify the Trustee or any predecessor
Trustee against any and all losses, liabilities or expenses, including taxes
(except for taxes based upon the income of the Trustee), incurred by it arising
out of or in connection with the acceptance or
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administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company and the Guarantors
(including this Section 7.07) and defending itself against any claim (whether
asserted by the Company, the Guarantors, any Holder or any other person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its gross negligence or bad faith. The Trustee will notify
the Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company will not relieve the Company or any of its
Guarantors of its obligations hereunder. The Company or such Guarantor will
defend the claim and the Trustee will cooperate in the defense. The Trustee may
have separate counsel and the Company will pay the reasonable fees and expenses
of such counsel. The Company or any of the Guarantors need not pay for any
settlement made without their consent, which consent will not be unreasonably
withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture and
the resignation or removal of the Trustee.
(d) To secure the Company's payment obligations in this Section
7.07, the Trustee will have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay principal of,
interest, premium and Liquidated Damages, if any, on particular Notes. Such Lien
will survive the satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(ix) or (x) hereof occurs, the
expenses and the compensation for such services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA ss.
313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in writing. The
Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a custodian or public officer takes charge of the Trustee or
its property; or
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(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company will promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 30 days
after the retiring Trustee resigns or is removed, the retiring Trustee (at the
Company's expense), the Company, or the Holders of at least 10% in principal
amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder of a Note
who has been a Holder for at least six months, fails to comply with Section 7.10
hereof, such Holder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act will be the
successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
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Section 7. 11 Preferential Collection of Claims against Company.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed will be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors, or
evidenced by a resolution set forth in an Officers' Certificate, at any time,
elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company and each of the Guarantors
will, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its Obligations with respect to
all outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture referred to in clauses (i) and (ii) below,
and to have satisfied all its other obligations under such Notes, the Subsidiary
Guarantees and this Indenture (and the Trustee, on demand of and at the expense
of the Company, will execute proper instruments acknowledging the same), except
for the following provisions which will survive until otherwise terminated or
discharged hereunder:
(i) the rights of Holders of outstanding Notes to receive solely
from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of, or
interest or premium and Liquidated Damages, if any, on such Notes when
such payments are due;
(ii) the Company's obligations with respect to such Notes under
Sections 2.06, 2.07 and 4.02 hereof and its obligations under the
Registration Rights Agreement;
(iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder and the Company's and the Guarantors' obligations in
connection therewith and
(iv) this Section 8.02.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
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Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company and each of the Guarantors
will, subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be released from its obligations under Sections 4.03, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.18, and 4.19 and Article 5 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes will
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes will not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Notes and
Subsidiary Guarantees, the Company and the Guarantors may omit to comply with
and will have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply will not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(iii) through
6.01(vii) hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant
Defeasance under either Section 8.02 or 8.03 hereof:
(i) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally
recognized investment bank or firm of independent public accountants,
to pay the principal of, premium, interest and Liquidated Damages, if
any, on the outstanding Notes on the Stated Maturity or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(ii) in the case of an election under Section 8.02 hereof, the
Company will deliver to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that (A) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the Issue Date, 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 will confirm that, the
Holders of the outstanding Notes 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
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manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(iii) in the case of an election under Section 8.03 hereof, the
Company has delivered to the Trustee an Opinion of Counsel reasonably
acceptable to the Trustee confirming that the Holders of the
outstanding Notes 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;
(iv) no Default or Event of Default has occurred and is 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);
(v) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(vi) the Company must deliver to the Trustee an Opinion of Counsel
to the effect that, assuming, among other things, no intervening
bankruptcy of the Company between the date of deposit and the 91st day
following the deposit, and assuming that no Holder is an "insider" of
the Company under applicable bankruptcy law, after the 91st day
following the deposit, the cash or non-callable Government Securities
deposited in trust will not be subject to avoidance and repayment under
Sections 547 and 550 of the U.S. Bankruptcy Code;
(vii) the Company must deliver 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; and
(viii) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to Legal Defeasance or Covenant Defeasance have been
complied with.
However, the Opinion of Counsel required by clause (ii) hereof
will not be required if all Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, will become due and payable on their
maturity date within one year or are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the Company's name, and at the Company's expense.
Section 8.05 Deposited Money and Government Securities to be held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of this Section
8.05, the "Trustee") pursuant to Section 8.04 hereof in
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respect of the outstanding Notes will be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
interest, premium and Liquidated Damages, if any, but such money need not be
segregated from other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof 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 the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any cash or noncallable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(i) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, interest,
premium and Liquidated Damages, if any, on any Note and remaining unclaimed for
two years after such principal, interest, premium and Liquidated Damages, if
any, has become due and payable will be paid to the Company on its request or
(if then held by the Company) will be discharged from such trust; and the Holder
of such Note will thereafter look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as Trustee thereof, will thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which will not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any cash in
United States dollars or non-callable Government Securities in accordance with
Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's and the Guarantors'
obligations under this Indenture, the Notes and the Subsidiary Guarantees shall
be revived and reinstated as though no deposit had occurred pursuant to Section
8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted
to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the
case may be; provided, however, that, if the
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Company makes any payment of principal of, interest, premium and Liquidated
Damages, if any, on any Note following the reinstatement of its obligations, the
Company will be subrogated to the rights of the Holders of such Notes to receive
such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders.
Notwithstanding Section 9.02 hereof, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(iii) to provide for the assumption of the Company's Obligations
to the Holders in the case of a merger or consolidation or sale of all
or substantially all of the Company's assets pursuant to Article 5
hereof;
(iv) to make any change that would provide any additional rights
or benefits to the Holders or that does not adversely affect the legal
rights hereunder of any Holder of a Note;
(v) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(vi) to comply with the rules of any applicable securities
depository;
(vii) to comply with the covenant contained in Article 5 hereof;
(viii) to add Subsidiary Guarantees with respect to the Notes or
to secure the Notes;
(ix) to add to the covenants of the Company or any Guarantor for
the benefit of the Holders or surrender any right or power conferred
upon the Company or any Guarantor; or
(x) to evidence and provide for the acceptance and appointment
under this Indenture of a successor Trustee pursuant to the
requirements thereof.
The consent of the Holders is not necessary under this Indenture
to approve the particular form of any proposed amendment. It is sufficient if
such consent approves the substance of the proposed amendment.
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After an amendment under this Indenture becomes effective, the
Company is required to mail to Holders a notice briefly describing such
amendment. However, the failure to give such notice to all Holders, or any
defect therein, will not impair or affect the validity of the amendment.
Upon (x) the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture and (y) receipt by the Trustee of the documents described
in Section 7.02 hereof, the Trustee will join with the Company in the execution
of any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee will not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Sections 3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, interest, premium or Liquidated Damages, if any, on the Notes,
except a Payment Default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Subsidiary Guarantees or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Notes).
Upon (x) the request of the Company accompanied by a resolution of
the Board of Directors of the Company authorizing the execution of any such
amended or supplemental Indenture, (y) the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders as aforesaid and (z)
receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee will join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but will not be obligated to,
enter into such amended or supplemental Indenture.
The Company may, but will not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, will be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent will have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 180 days after such record date; any such consent
previously given will automatically and without further action by any Holder be
canceled and of no further effect.
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It will not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it will be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will 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, will not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder):
(i) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any
Note or alter the provisions with respect to the redemption of the
Notes except as provided above with respect to Sections 3.09, 4.10 and
4.15 hereof;
(iii) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(iv) waive a Default or Event of Default in the payment of
principal of, interest, premium or Liquidated Damages, if any, on the
Notes (except a rescission of acceleration of the Notes by the Holders
of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted
from such acceleration);
(v) make any Note payable in currency other than that stated in
the Notes;
(vi) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders to receive
payments of principal of, or interest or premium or Liquidated Damages,
if any, on the Notes;
(vii) waive a redemption payment with respect to any Note (other
than a payment required by Sections 3.09, 4.10 and 4.15 hereof);
(viii) release any Guarantor from any of its Obligations under its
Subsidiary Guarantee or the Indenture, except in accordance with the
terms of this Indenture; or
(ix) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions.
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Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will
be set forth in a amended or supplemental Indenture that complies with the TIA
as then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee will authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note will
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental indenture until the Board
of Directors approves it. In executing any amended or supplemental indenture,
the Trustee will be entitled to receive, and (subject to Section 7.01 hereof)
will be fully protected in relying upon, an Officers' Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture
is authorized or permitted by this Indenture.
ARTICLE 10.
SUBSIDIARY GUARANTEES
Section 10.01 Agreement to Guarantee.
(a) Each of the Guarantors, jointly and severally, with all other
Guarantors, unconditionally Guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
regardless of the validity and enforceability of this Indenture, the Notes or
the Obligations of the Company under this Indenture or the Notes, that:
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(i) the principal of, interest, premium and Liquidated Damages, if
any, on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal of, interest, premium and Liquidated Damages, if any,
on the Notes, to the extent lawful, and all other Obligations of the
Company to the Holders or the Trustee under this Indenture or the Notes
will be promptly paid in full, all in accordance with the terms hereof
or thereof; and
(ii) in case of any extension of time for payment or renewal of
any Notes or any of such other Obligations, that the same will be
promptly paid in full when due in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or
otherwise.
(b) Notwithstanding the foregoing, in the event that this
Subsidiary Guarantee would constitute or result in a violation of any applicable
fraudulent conveyance or similar law of any relevant jurisdiction, the liability
of the Guarantors under this Indenture will be reduced to the maximum amount
permissible under such fraudulent conveyance or similar law.
(c) Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
Section 10.02 Execution and Delivery of Subsidiary Guarantees.
(a) To evidence its Subsidiary Guarantee set forth in this
Indenture, each Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form attached as Exhibit C to this Indenture will
be endorsed by an Officer of such Guarantor on each Note authenticated and
delivered by the Trustee on or after the date hereof.
(b) Notwithstanding the foregoing, each Guarantor hereby agrees
that its Subsidiary Guarantee set forth herein will remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
(c) If an Officer whose signature is on this Indenture or on a
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee will be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the
authentication thereof under this Indenture, will constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Guarantor.
(e) Each Guarantor hereby agrees that its obligations hereunder
will be unconditional, regardless of the validity, regularity or enforceability
of the Notes or this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder 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.
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(f) 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 its Subsidiary
Guarantee made pursuant to this Indenture will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
(g) If any Holder or the Trustee is required by any court or
otherwise to return to the Company or any Guarantor, or any custodian, Trustee,
liquidator or other similar official acting in relation to either the Company or
such Guarantor, any amount paid by either to the Trustee or such Holder, the
Subsidiary Guarantee made pursuant to this Indenture, to the extent theretofore
discharged, will be reinstated in full force and effect.
(h) Each Guarantor agrees that it will not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
Guaranteed hereby until payment in full of all obligations Guaranteed hereby.
Each Guarantor further agrees that, as between such Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand:
(i) the maturity of the Obligations Guaranteed hereby may be
accelerated as provided in Article 6 hereof for the purposes of the
Subsidiary Guarantee made pursuant to this Indenture, notwithstanding
any stay, injunction or other prohibition preventing such acceleration
in respect of the Obligations Guaranteed hereby; and
(ii) in the event of any declaration of acceleration of such
Obligations as provided in Article 6 hereof, such Obligations (whether
or not due and payable) will forthwith become due and payable by such
Guarantor for the purpose of the Subsidiary Guarantee made pursuant to
this Indenture.
(i) Each Guarantor will have the right to seek contribution from
any other non-paying Guarantor so long as the exercise of such right does not
impair the rights of the Holders or the Trustee under the Subsidiary Guarantee
made pursuant to this Indenture.
Section 10.03 Guarantors May Consolidate, etc. on Certain Terms.
(a) Except as set forth in Articles 4 and 5 hereof, and
notwithstanding Sections 10.03(b) and (c) hereof, nothing contained in this
Indenture or in the Notes will prevent any consolidation or merger of any
Guarantor with or into the Company or any other Guarantor or will prevent any
transfer, sale or conveyance of the property of any Guarantor as an entirety or
substantially as an entirety to the Company or any other Guarantor.
(b) Except as set forth in Section 10.04 hereof, no Guarantor may
sell or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person), another Person, other than the Company or another Guarantor,
unless:
(i) immediately after giving effect to that transaction, no
Default or Event of Default exists; and
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(ii) either:
(A) subject to Section 10.04 hereof, the Person acquiring the
property in any such sale or disposition or the Person formed by
or surviving any such consolidation or merger assumes all the
obligations of that Guarantor under this Indenture, the Notes, its
Subsidiary Guarantee and the Registration Rights Agreement
pursuant to a supplemental indenture satisfactory to the Trustee;
or
(B) the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of this
Indenture, including without limitation, Section 4.10 hereof.
(c) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by supplemental indenture,
executed and delivered to the Trustee and satisfactory in form to the Trustee,
of the Subsidiary Guarantee made pursuant to this Indenture and the due and
punctual performance of all of the covenants and conditions of this Indenture to
be performed by such Guarantor, such successor Person will succeed to and be
substituted for such Guarantor with the same effect as if it had been named
herein as one of the Guarantors. Such successor Person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed upon the Notes
issuable under this Indenture which theretofore have not been signed by the
Company and delivered to the Trustee. All the Subsidiary Guarantees so issued
will in all respects have the same legal rank and benefit under this Indenture
as the Subsidiary Guarantees theretofore and thereafter issued in accordance
with the terms of this Indenture as though all of such Subsidiary Guarantees had
been issued at the date of the execution hereof.
Section 10.04 Releases.
(a) In connection with any sale or other disposition of all or
substantially all of the assets of any Guarantor (including by way of merger or
consolidation) or a sale of all of the Capital Stock of any Guarantor, in each
case to a Person that is not (either before or after giving effect to such
transactions) a Subsidiary of the Company, if the sale or other disposition
complies with Section 4.10 and the other applicable provisions of this
Indenture, then such Guarantor (in the event of a sale or other disposition, by
way of merger, consolidation or otherwise, of all of the Capital Stock of such
Guarantor) or the Person acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided that the Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of this Indenture, including without
limitation Section 4.10 hereof and is not in violation of any other provisions
under this Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Section 4.10 hereof, the Trustee
will execute any documents reasonably required in order to evidence the release
of any Guarantor from its obligations under its Subsidiary Guarantee. Any
Guarantor not released from its obligations under its Subsidiary Guarantee will
remain liable for the full amount of principal of, interest, premium and
Liquidated
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Damages, if any, on the Notes and for the other obligations of any Guarantor
under this Indenture as provided in this Article 10.
(b) If the Company designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary in accordance with the applicable
provisions of this Indenture, such Guarantor will be released and relieved of
its obligations under its Subsidiary Guarantee. Upon delivery by the Company to
the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect
that such designation of such Guarantor as an Unrestricted Subsidiary was made
by the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.07 hereof, the Trustee will execute any documents
reasonably required in order to evidence the release of such Guarantor from its
obligations under its Subsidiary Guarantee. Any Guarantor not released from its
obligations under its Subsidiary Guarantee will remain liable for the full
amount of principal of, interest, premium and Liquidated Damages, if any, on the
Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
(c) In connection with any Legal Defeasance or Covenant Defeasance
of the Notes in accordance with, and subject to Article 8 hereof, each Guarantor
shall be released and relieved of its obligations under this Indenture in
accordance with, and subject to, Article 8 hereof..
(d) In the event a Guarantor no longer Guarantees Obligations
under any Credit Facilities of the Company, such Guarantor will be released and
relieved of its Obligations under its Subsidiary Guarantee. Upon delivery by the
Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to
the effect that such Guarantor no longer Guarantees Obligations under any Credit
Facilities of the Company, the Trustee will execute any documents reasonably
required in order to evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee. Any Guarantor not released from its obligations
under its Subsidiary Guarantee will remain liable for the full amount of
principal of, interest, premium and Liquidated Damages, if any, on the Notes and
for the other obligations of any Guarantor under this Indenture as provided in
this Article 10.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued thereunder, when:
(i) either:
(A) all Notes that have been authenticated, except lost, stolen
or destroyed Notes that have been replaced or paid and Notes
for whose payment money has been deposited in trust and
thereafter repaid to the Company, have been delivered to the
Trustee for cancellation; or
(B) all Notes that have not been delivered to the Trustee for
cancellation have become due and payable or will become due
and payable within one year
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by reason of the mailing of a notice of redemption or otherwise
and the Company or any Guarantor has irrevocably deposited or
caused to be deposited with the Trustee as funds in trust solely
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be
sufficient without consideration of any reinvestment of interest,
to pay and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, accrued
interest, premium and Liquidated Damages, if any, to the date of
maturity or redemption;
(ii) no Default or Event of Default has occurred and is continuing on
the date of the deposit or will occur as a result of the deposit
and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such
deposit and the guaranteeing of any Lien securing such borrowing;
(iii) the Company or any Guarantor has paid or caused to be paid all
sums payable by it under this Indenture; and
(iv) the Company has delivered irrevocable instructions to the Trustee
under this Indenture to apply the deposited money toward the
payment of the Notes at maturity or the redemption date, as the
case may be.
In addition, the Company must deliver an Officers' Certificate and
an Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture,
if money has been deposited with the Trustee pursuant to Section 11.01(i)(B)
hereof, the provisions of Section 11.02 hereof and Section 8.06 hereof will
survive. In addition, nothing in this Section 11.01 hereof will be deemed to
discharge those provisions of Section 7.07 hereof, that, by their terms, survive
the satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money
deposited with the Trustee pursuant to Section 11.01 hereof will be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal, interest, premium
and Liquidated Damages, if any, for whose payment such money has been deposited
with the Trustee; but such money need not be segregated from other funds except
to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 hereof by reason of any
legal proceeding or by
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reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Company's
and any Guarantor's obligations under this Indenture and the Notes will be
revived and reinstated as though no deposit had occurred pursuant to Section
11.01 hereof; provided that if the Company has made any payment of principal of,
interest, premium or Liquidated Damages, on any Notes because of the
reinstatement of its obligations, the Company will be subrogated to the rights
of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 12.
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss. 318(c), the imposed duties will control.
Section 12.02 Notices.
Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in Person or mailed by first
class mail (registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company or any Guarantor:
MemberWorks Incorporated
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Investor Relations
With a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx (Fax: 000-000-0000)
If to the Trustee:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Services Division
The Company or the Trustee, by notice to the others, may designate
additional or different addresses for subsequent notices or communications.
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All notices and communications (other than those sent to Holders)
will be deemed to have been duly given, at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
Section 12.03 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 Notes. The
Company, the Trustee, the Registrar and anyone else will have the protection of
TIA ss. 312(c).
Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company will furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which will include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which will include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel (who may rely upon the Officer's Certificate as to matters of
fact), all such conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) will comply with the provisions of TIA
ss. 314(e) and will include:
86
(a) a statement that the Person making such certificate or
opinion 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 or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No director, officer, employee, incorporator or stockholder of the
Company or any Guarantor, as such, will have any liability for any obligations
of the Company or any Guarantor under the Notes, the Subsidiary Guarantees or
this Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
Commission that such a waiver is against public policy.
Section 12.08 Governing Law.
THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Company or its Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 12.10 Successors.
All agreements of the Company and the Guarantors in this
Indenture, the Notes and the Subsidiary Guarantors will bind its successors. All
agreements of the Trustee in this Indenture will bind its successors.
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Section 12.11 Severability.
In case any provision in this Indenture or in the Notes will be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions will not in any way be affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 12.13 Table of Contents, Headings, etc.
The table of contents, cross-reference table and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
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SIGNATURES
Dated as of April 13, 2004
MEMBERWORKS INCORPORATED
By /s/
---------------------------------
Name:
Title:
Guarantors:
BILLING SERVICES INTERNATIONAL, INC.
BEST BENEFITS, INC.
IMPAC MARKETING CORP.
XXXXXXXXXXXXXXXX.XXX, INC.
COUNTRYWIDE DENTAL, INC.
MEMBERWORKS CANADA LLC
QUOTA PHONE, INC.
DISCOUNT DEVELOPMENT SERVICES, LLC
UNICARE, INC.
XXXXXXXXX & COMPANY INC.
MEMBERWORKS CANADA HOLDCO, INC.
LAVA LIFE CORP.
INTERACTIVE MEDIA GROUP (USA) LTD.
INTERACTIVE MEDIA CONSOLIDATED, INC.
INTERACTIVE VOICE MEDIA BALTIMORE LLC
INTERACTIVE VOICE MEDIA COLORADO LLC
INTERACTIVE VOICE MEDIA GEORGIA LLC
INTERACTIVE VOICE MEDIA MICHIGAN LLC
INTERACTIVE VOICE MEDIA NEW JERSEY LLC
INTERACTIVE VOICE MEDIA NEW YORK LLC
INTERACTIVE VOICE MEDIA OHIO LLC
INTERACTIVE VOICE MEDIA PENNSYLVANIA LLC
LAVALIFE WASHINGTON DC LLC
INTERACTIVE (TX) VOICE MEDIA CORP.
INTERACTIVE LA VOICE MEDIA CORP.
INTERACTIVE MEDIA (IL) CORP.
INTERACTIVE MEDIA MO CORP.
INTERACTIVE SJ VOICE MEDIA CORP.
INTERACTIVE VOICE MEDIA (CA) CORP.
INTERACTIVE VOICE MEDIA (MN) CORP.
INTERACTIVE VOICE MEDIA (SACRAMENTO) CORP.
XXXXXX HOLDING CORP.
By /s/
---------------------------------
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION, as Trustee
By /s/
---------------------------------
Name:
Title:
EXHIBIT A
[FORM OF FACE OF NOTE]
[Global Note Legend]
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY
BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY
BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(c) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF
MEMBERWORKS INCORPORATED.
[Private Placement Legend]
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE
903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (5)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS) OR
(6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
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CUSIP NO._______
ISIN________
No.__________________ $_________________
9 1/4% Senior Notes Due 2014
MemberWorks Incorporated, a Delaware corporation, promises to pay
to [ ], or registered assigns, the principal sum of ______________ ($_______) on
April 1, 2014.
Interest Payment Dates: April 1
and October 1.
Record Dates: March 15
and September 15.
Reference is hereby made to the further provisions of this Note
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect if set forth at this place.
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Additional provisions of this Note are set forth on the other side
of this Security.
Dated:
MEMBERWORKS INCORPORATED
By:___________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE BANK NATIONAL ASSOCIATION
as Trustee, certifies that this
is one of the Notes referred to in
the Indenture.
By:______________________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF NOTE]
9 1/4% Senior Note due 2014
Capitalized terms used herein will have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. INTEREST
MemberWorks Incorporated, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 9 1/4% per
annum from April 13, 2004 until maturity and will pay the Liquidated Damages
payable pursuant to Section 4 of the Registration Rights Agreement referred to
below. The Company will pay interest and Liquidated Damages, if any,
semiannually on April 1 and October 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from April 13, 2004;
provided that if there is no existing Default in the payment of interest, and if
this Note is authenticated between a record date referred to on the face hereof
and the next succeeding Interest Payment Date, interest will accrue from such
next succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date will be October 1, 2004. The Company will pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue principal and premium, if any, from time to time on demand at a rate
that is 1.0% per annum in excess of the then applicable interest rate on this
Note to the extent lawful; it will pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace periods)
at the same rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT
The Company will pay principal of, interest and premium (except
defaulted interest) and Liquidated Damages, if any, on the Notes to the Persons
who are registered Holders at the close of business on the record date
immediately preceding the Interest Payment Date, even if such Notes are canceled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, interest, premium and Liquidated
Damages, if any, at the office or agency of the paying agency or registrar
maintained for such purpose within The City and State of New York or Chicago,
Illinois, or, at the option of the Company, payments of interest and Liquidated
Damages, if any, may be made by check mailed to the Holders at their respective
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of, interest, premium and Liquidated Damages, if any, on, all Global
Notes and all other Notes the Holders of which have provided wire transfer
instructions to the Company or the Paying Agent if such Holders are registered
Holders of at least $1,000,000 in principal amount of the Notes. Such payment
will be in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
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3. PAYING AGENT AND REGISTRAR
Initially, LaSalle Bank National Association, the Trustee under
the Indenture, will act as Paying Agent and Registrar. The Company may appoint
one or more co-registrars and one or more additional paying agents. The Company
may change any Paying Agent or Registrar without notice to any Holder. The
Company or any of its Restricted Subsidiaries may act in any such capacity.
4. INDENTURE
The Company issued the Notes under an Indenture dated as of April
13, 2004 ("Indenture") among the Company, the Guarantors named therein and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code xx.xx. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture will govern and be
controlling.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clause (b) and (c) of this paragraph 5,
the Notes will not be redeemable at the Company's option prior to April 1, 2009.
After April 1, 2009, the Company may redeem all or a part of the Notes upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, on the Notes redeemed, to the
applicable redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the twelve-month period beginning on April 1 of the
years indicated below:
Year Percentage
2009................................... 104.625%
2010................................... 103.083%
2011................................... 101.542%
2012 and thereafter.................... 100.000%
(b) Notwithstanding the foregoing, at any time prior to April 1,
2007, the Company may on any one or more occasions redeem up to 35% of the
aggregate principal amount of the Notes issued under the Indenture at a
redemption price of 109.250% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the redemption date,
with the net cash proceeds of one or more Equity Offerings by the Company or
from the cash contribution of equity capital (other than Disqualified Stock) to
the Company; provided that at least 65% of the aggregate principal amount of
Notes (including Additional Notes, if any) issued under the Indenture remains
outstanding immediately after the occurrence of each such redemption (excluding
Notes held by the Company and its Subsidiaries); and provided, further, that any
such redemption occurs within 90 days of the date of the closing of such Equity
Offering. Notice of any redemption upon an Equity Offering may be given prior to
completion of the related Equity Offering and any such notice or redemption
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may, at the Company's discretion, be subject to the satisfaction of one or more
conditions precedent, including, but not limited to, the completion of the
related Equity Offering.
(c) At any time prior to April 1, 2009, the Company may also
redeem all or a part of the Notes, upon not less than 30 nor more than 60 days'
notice, at a redemption price equal to 100% of the principal amount of Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest and
Liquidated Damages, if any, to the date of redemption.
(d) A notice of redemption may, at the Company's discretion, be
subject to one or more conditions precedent.
6. MANDATORY REDEMPTION.
The Company is not required to make mandatory redemption payments
with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be required
to make a Change of Control Offer to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of each Holder's Notes at an offer price equal
to 101% of aggregate principal amount of Notes repurchased plus accrued and
unpaid interest and Liquidated Damages, if any, on the Notes repurchased to the
date of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the Change of Control Payment Date specified in the
notice, which date shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed, pursuant to the procedures required by the
Indenture and described in such notice.
(b) When the aggregate amount of Excess Proceeds resulting from an
Asset Sale exceeds $5,000,000, the Company shall commence an Asset Sale Offer to
all Holders and all holders of other Indebtedness that is pari passu with the
Notes containing provisions similar to those set forth in the Indenture with
respect to offers to purchase or redeem with the proceeds of sales of assets
pursuant to the Indenture to purchase the maximum principal amount of Notes and
such other pari passu Indebtedness that may be purchased out of the Excess
Proceeds, at an offer price in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the
date of purchase and shall be payable in cash. If any Excess Proceeds remain
after consummation of an Asset Sale Offer, the Company may use such Excess
Proceeds for any purpose not otherwise prohibited by the Indenture. If the
aggregate principal amount of Notes and other pari passu Indebtedness tendered
into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
shall select the Notes and such other pari passu Indebtedness to be purchased on
a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess
Proceeds will be reset at zero.
8. NOTICE OF REDEMPTION
Notice of redemption shall be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder whose Notes are to be
redeemed at its registered
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address, except that redemption notices may be mailed more than 60 days prior to
a redemption date if the notice is issued in connection with a defeasance of the
Notes or a satisfaction and discharge of the Indenture pursuant to the terms
thereof.
9. DENOMINATIONS, TRANSFER, EXCHANGE
The Notes are in registered form without coupons in denominations
of $1,000 and integral multiples of $1,000. The transfer of Notes may be
registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before a selection of Notes to be redeemed or
during the period between a record date and the corresponding Interest Payment
Date.
10. PERSONS DEEMED OWNERS
The registered holder of a Note may be treated as its owner for
all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture, the Subsidiary
Guarantees and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection with a purchase
of, or tender offer or exchange offer for, the Notes), and any existing Default
or Event of Default (other than a Default or Event of Default in the payment of
the principal of, interest, premium or Liquidated Damages, if any, on the Notes,
except a Payment Default resulting from an acceleration that has been rescinded)
or compliance with any provision of the Indenture, the Notes or the Subsidiary
Guarantees may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including, without limitation,
consents obtained in connection with a purchase of, or tender offer or exchange
offer for, the Notes). Without the consent of any Holder, the Indenture, the
Notes or the Subsidiary Guarantees may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's Obligations to Holders in case of a merger or consolidation or
sale of all or substantially all of the Company's assets pursuant to the
Indenture, to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights under
the Indenture of any Holder of a Note, to comply with the rules of any
applicable securities depository, to comply with the requirements of the
Commission in order to effect or maintain the qualification of the Indenture
under the TIA, to comply with the covenant contained in Article 5 of the
Indenture, to add Subsidiary Guarantees with respect to the Notes or to secure
the Notes, to add to the covenants of the Company or any Guarantor for the
benefit of the Holders or surrender any right or power conferred upon the
Company or any Guarantor, or to evidence and provide for the acceptance and
appointment under the Indenture of a successor Trustee pursuant to the
procedures set forth in the Indenture.
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12. DEFAULTS AND REMEDIES
An "Event of Default" occurs if: (i) the Company defaults in the
payment when due of interest on, or Liquidated Damages, if any, with respect to,
the Notes and such default continues for a period of 30 days; (ii) the Company
defaults in the payment when due of the principal of or premium, if any, on the
Notes; (iii) the Company or any of its Restricted Subsidiaries fails to comply
with any of the provisions of Sections 4.10, 4.15 or 5.01 of the Indenture; (v)
the Company or any of its Restricted Subsidiaries fails to comply with any other
agreement in the Indenture or the Notes for a period of 60 days after receipt of
notice to comply; (vi) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is Guaranteed by the Company or
any of its Restricted Subsidiaries), whether such Indebtedness or Guarantee now
exists, or is created after the date of the Indenture, which default (A) is
caused by a failure to pay principal of, or interest or premium, if any, on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") or (B) results in
the acceleration of such Indebtedness prior to its Stated Maturity and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which being so accelerated, in either case,
aggregates $5,000,000 or more; (vii) the Company or any of its Restricted
Subsidiaries fails to pay final judgments aggregating in excess of $5,000,000
(exclusive of amounts covered by insurance), which judgments are not paid,
discharged or stayed for a period of 60 days; (viii) except as permitted by the
Indenture, any Subsidiary Guarantee is held in any judicial proceeding to be
unenforceable or invalid or ceases 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; or (ix) certain events
of bankruptcy or insolvency described in the Indenture with respect to the
Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary.
In the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any Significant
Subsidiary, all outstanding Notes shall become due and payable immediately
without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may declare all outstanding Notes to be due and
payable immediately. Notwithstanding the foregoing, Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal of,
interest, premium or Liquidated Damages, if any on any Note) if a committee of
its Responsible Officers in good faith determines that withholding notice is in
their interest, except with respect to a Default or Event of Default relating to
the payment of principal of, or interest or premium of Liquidated Damages, if
any, on, the Notes. Certain Events of Defaults relating to Payment Defaults
described in clause (vi) of the proceeding paragraph may be annulled if
remedied, cured or waived as set forth in the Indenture.
A-8
In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 of the Indenture, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law upon the acceleration
of the Notes. If an Event of Default occurs prior to April 1, 2009 by reason of
any willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Notes prior
to that date, then the premium specified in the Indenture with respect to the
first year that the Notes may be redeemed at the Company's option shall also
become immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.
Holders of not less than a majority in aggregate principal amount
of the then outstanding Notes by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences under the Indenture, except a continuing Default or Event of
Default in the payment of principal of, interest, premium or Liquidated Damages,
if any, on, the Notes; provided that the Holders of a majority in aggregate
principal amount of the then outstanding Notes may rescind an acceleration and
its consequences, including any related payment default that resulted from such
acceleration, if the rescission would not conflict with any judgment or decree
or if all existing Events of Default have been cured or waived. Upon such waive,
such Default will cease to exist, and any Event of Default arising therefrom
will be deemed to have been cured for every purpose of this Indenture; but no
such waiver will extend to any subsequent or other Default or impair any right
consequent thereon.
13. TRUSTEE DEALINGS WITH COMPANY
The Trustee or any Affiliate of the Trustee, in its individual or
any other capacity, may become the owner or pledgee of Notes, and may otherwise
deal with the Company or any Affiliates, as if it were not the Trustee.
14. 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 Notes, the Subsidiary Guarantees 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 Note waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. AUTHENTICATION
This Note will not be valid until authenticated by the manual or
facsimile signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS
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Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (tenants in common), TEN ENT (tenants by the
entireties), JT TEN (joint tenants with right of survivorship and not as tenants
in common), CUST (custodian), and U/G/M/A (Uniform Gifts to Minors Act).
17. ADDITI0NAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES
In addition to the rights provided to Holders under the Indenture,
Holders of Transferred Restricted Securities will have all the rights set forth
in the Registration Rights Agreement.
18. CUSIP NUMBERS
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Notes and the Trustee shall use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.
19. GOVERNING LAW
This Note will be governed by, and construed in accordance with,
the laws of the State of New York.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
MemberWorks Incorporated
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Investor Relations
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign
and transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
--------------------------------------------------------------------------------
Date:______________________
Your Signature:_______________________________
(Sign exactly as your name appears on the
face of this Note)
Reference is hereby made to the Indenture, dated as of April 13,
2004 (the "Indenture"), among MemberWorks Incorporated, as issuer (the
"Company"), the Guarantors party thereto and LaSalle Bank National Association,
as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with any transfer of any of the Notes evidenced by
this certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act"),
after the later of the date of original issuance of such Notes and the last
date, if any, on which such Notes were owned by the Company or any Affiliate of
the Company, the undersigned confirms that such Notes are being transferred in
accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the
Securities Act; or
(3) [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act) that
purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such
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transfer is being made in reliance on Rule 144A, in each case
pursuant to and in compliance with Rule 144A under the
Securities Act; or
(4) [ ] outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act; or
(5) [ ] pursuant to the exemption from registration provided by Rule
144 under the Securities Act.
If such transfer is being made pursuant to an offshore transaction in
accordance with Rule 904 under the Securities Act, the undersigned further
certifies that:
(i) the transfer is not being made to a person in the United
States;
(ii) 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 off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;
(iii) 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;
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(v) if the proposed transfer is being made prior to the expiration
of the Restricted Period, the transfer is not being made to a U.S. Person for
the account or benefit of a U.S. Person (other than an Initial Purchaser);
(vi) we have advised the transferee of the transfer restrictions
applicable to the Notes; and
(vii) if the circumstances set forth in Rule 904(b) under the
Securities Act are applicable, we have complied with the additional conditions
therein, including (if applicable) sending a confirmation or other notice
stating that the Notes may be offered and sold during the distribution
compliance period specified in Rule 903 of Regulation S, pursuant to
registration of the Notes under the Securities Act or pursuant to an available
exemption from the registration requirements under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Notes evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4) or (5) is
checked, the Trustee will be entitled to require, prior to registering any such
transfer of the Notes, such legal opinions, certifications and other information
as the Company has reasonably requested to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject to, the
registration
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requirements of the Securities Act, such as the exemption provided by Rule 144
under the Securities Act.
--------------------------------
Signature
Signature Guarantee:
----------------------------------- --------------------------------
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which requirements
include membership or participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
--------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:______________ ________________________________
NOTICE: To be executed by
an executive officer
A-13
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $_________________
Date:_______________ Your Signature:___________________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:___________________________
Signature Guarantee.
______________________________
Signature must be guaranteed
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
A-14
Schedule of Exchanges of Interests in the Global Note
This Note was initially made in the amount of US$150,000,000.
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount of
this Global Note Signature of
Amount of Decrease Amount of Increase following such Authorized Officer
in Principal Amount in Principal Amount Decrease of Trustee or Note
Date of Exchange of this Global Note of this Global Note (or Increase) Custodian
---------------- ------------------- ------------------- ------------------- -------------------
A-15
EXHIBIT B
FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED
BY SUBSIDIARY GUARANTOR
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as
of ________________, among_________________________________ (the "Subsidiary
Guarantors"), each a direct or indirect subsidiary of MemberWorks Incorporated
(or its permitted successor), a Delaware corporation (the "Company"), the
Company and LaSalle Bank National Association, as trustee under the indenture
referred to below (the "Trustee").
WITNESSETH
WHEREAS, the Company and certain of its Subsidiaries have
heretofore executed and delivered to the Trustee an indenture (the "Indenture"),
dated as of April 13, 2004 providing for the issuance of an unlimited amount of
9 1/4% Senior Notes due 2014 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances
the Subsidiary Guarantors will execute and deliver to the Trustee a supplemental
indenture pursuant to which the Subsidiary Guarantors will unconditionally
guarantee all of the Company's Obligations (as defined in the Indenture) under
the Notes and the Indenture on the terms and conditions set forth herein (the
"Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Subsidiary Guarantors and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition will have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. Each Subsidiary Guarantor hereby agrees as
follows:
(a) Such Subsidiary Guarantor, jointly and severally with all
other current and future guarantors of the Notes
(collectively, the "Guarantors" and each, a "Guarantor"),
unconditionally guarantees to each Holder authenticated and
delivered by the Trustee and to the Trustee and its
successors and assigns, regardless of the validity and
enforceability of the Indenture, the Notes or the Obligations
of the Company under the Indenture or the Notes, that:
(i) the principal of, interest, premium and Liquidated
Damages, if any, on the Notes will be promptly paid in
full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on
B-1
the overdue principal of, interest, premium and
Liquidated Damages, if any, on the Notes, to the extent
lawful, and all other Obligations of the Company to the
Holders or the Trustee thereunder or under the Indenture
will be promptly paid in full, all in accordance with
the terms thereof; and
(ii) in case of any extension of time for payment or renewal
of any Notes or any of such other Obligations, that the
same will be promptly paid in full when due in
accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or
otherwise.
(b) Notwithstanding the foregoing, in the event that this
Subsidiary Guarantee would constitute or result in a
violation of any applicable fraudulent conveyance or similar
law of any relevant jurisdiction, the liability of such
Subsidiary Guarantor under this Supplemental Indenture and
its Subsidiary Guarantee shall be reduced to the maximum
amount permissible under such fraudulent conveyance or
similar law.
3. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
(a) To evidence its Subsidiary Guarantee set forth in this
Supplemental Indenture, such Subsidiary Guarantor hereby
agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit C to the Indenture will
be endorsed by an officer of such Subsidiary Guarantor on
each Note authenticated and delivered by the Trustee after
the date hereof.
(b) Notwithstanding the foregoing, such Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee set forth herein
will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary
Guarantee.
(c) If an Officer whose signature is on this Supplemental
Indenture or on the Subsidiary Guarantee no longer holds that
office at the time the Trustee authenticates the Note on
which a Subsidiary Guarantee is endorsed, the Subsidiary
Guarantee will be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the
authentication thereof under the Indenture, will constitute
due delivery of the Subsidiary Guarantee set forth in this
Supplemental Indenture on behalf of each Subsidiary
Guarantor.
(e) Each Subsidiary Guarantor hereby agrees that its Obligations
hereunder will be unconditional, regardless of the validity,
regularity or enforceability of the Notes or the Indenture,
the absence of any action to enforce the same, any waiver or
consent by any Holder 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
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might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(f) Each Subsidiary 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
its Subsidiary Guarantee made pursuant to this Supplemental
Indenture will not be discharged except by complete
performance of the Obligations contained in the Notes and the
Indenture.
(g) If any Holder or the Trustee is required by any court or
otherwise to return to the Company or any Subsidiary
Guarantor, or any custodian, Trustee, liquidator or other
similar official acting in relation to either the Company or
such Subsidiary Guarantor, any amount paid by either to the
Trustee or such Holder, the Subsidiary Guarantee made
pursuant to this Supplemental Indenture, to the extent
theretofore discharged, will be reinstated in full force and
effect.
(h) Each Subsidiary Guarantor agrees that it shall not be
entitled to any right of subrogation in relation to the
Holders in respect of any Obligations guaranteed hereby until
payment in full of all Obligations guaranteed hereby. Each
Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders and
the Trustee, on the other hand:
(i) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture
for the purposes of the Subsidiary Guarantee made
pursuant to this Supplemental Indenture, notwithstanding
any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations
guaranteed hereby; and
(ii) in the event of any declaration of acceleration of such
Obligations as provided in Article 6 of the Indenture,
such Obligations (whether or not due and payable) will
forthwith become due and payable by such Subsidiary
Guarantor for the purpose of the Subsidiary Guarantee
made pursuant to this Supplemental Indenture.
(i) Each Subsidiary Guarantor will have the right to seek
contribution from any other non-paying Subsidiary Guarantor
so long as the exercise of such right does not impair the
rights of the Holders or the Trustee under the Subsidiary
Guarantee made pursuant to this Supplemental Indenture.
B-3
4. SUBSIDIARY GUARANTOR MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
(a) Except as set forth in Articles 4 and 5 of the Indenture,
nothing contained in the Indenture, this Supplemental
Indenture or in the Notes will prevent any consolidation or
merger of any Subsidiary Guarantor with or into the Company
or any other Guarantor or will prevent any transfer, sale or
conveyance of the property of any Subsidiary Guarantor as an
entirety or substantially as an entirety to the Company or
any other Guarantor.
(b) Except as set forth in Section 10.04 of the Indenture, no
Subsidiary Guarantor may sell or otherwise dispose of all or
substantially all of its assets to, or consolidate with or
merge with or into (whether or not such Subsidiary Guarantor
is the surviving Person), another Person, other than the
Company or another Guarantor, unless: (i) immediately after
giving effect to such transaction, no Default or Event of
Default exists and (ii) either (A) subject to Section 10.04
of the Indenture, the Person acquiring the property in any
such sale or disposition or the Person formed by or surviving
any such consolidation or merger unconditionally assumes all
the obligations of that Subsidiary Guarantor, pursuant to a
supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Indenture and the
Subsidiary Guarantee on the terms set forth in the Indenture
or such Subsidiary Guarantee, as the case may be, and (B) the
Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of the Indenture,
including without limitation, Section 4.10 thereof.
(c) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of the Subsidiary
Guarantee made pursuant to this Supplemental Indenture and
the due and punctual performance of all of the covenants and
conditions of the Indenture and this Supplemental Indenture
to be performed by such Subsidiary Guarantor, such successor
Person will succeed to and be substituted for such Subsidiary
Guarantor with the same effect as if it had been named herein
as the Subsidiary Guarantor. Such successor Person thereupon
may cause to be signed any or all of the Subsidiary
Guarantees to be endorsed upon the Notes issuable under the
Indenture which theretofore have not been signed by the
Company and delivered to the Trustee. All the Subsidiary
Guarantees so issued will in all respects have the same legal
rank and benefit under the Indenture and this Supplemental
Indenture as the Subsidiary Guarantees theretofore and
thereafter issued in accordance with the terms of the
Indenture and this Supplemental Indenture as though all of
such Subsidiary Guarantees had been issued at the date of the
execution hereof.
B-4
5. RELEASES.
(a) In the event of any sale or other disposition of all or
substantially all of the assets of any Guarantor, by way of
merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor, in
each case to a Person that is not (either before or after
giving effect to such transactions) a Subsidiary of the
Company, if the sale or other disposition complies with
Section 4.10 and the other applicable provisions of this
Indenture, then such Guarantor (in the event of a sale or
other disposition, by way of merger, consolidation or
otherwise, of all of the Capital Stock of such Guarantor) or
the Person acquiring the property (in the event of a sale or
other disposition of all or substantially all of the assets
of such Guarantor) will be released and relieved of any
Obligations under its Subsidiary Guarantee; provided that the
Net Proceeds of such sale or other disposition are applied in
accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof and is not
in violation of any other provisions under this Indenture.
Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such
sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including
without limitation Section 4.10 hereof, the Trustee will
execute any documents reasonably required in order to
evidence the release of any Guarantor from its obligations
under its Subsidiary Guarantee. Any Subsidiary Guarantor not
released from its obligations under its Subsidiary Guarantee
will remain liable for the full amount of principal of,
interest, premium and Liquidated Damages, if any, on the
Notes and for the other obligations of any Guarantor under
the Indenture as provided in Article 10 thereof.
(b) Upon the designation of a Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary in accordance with
the terms of this Indenture, such Guarantor will be released
and relieved of its Obligations under its Subsidiary
Guarantee. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect
that such designation of such Guarantor as an Unrestricted
Subsidiary was made by the Company in accordance with the
provisions of this Indenture, including without limitation
Section 4.07 hereof, the Trustee will execute any documents
reasonably required in order to evidence the release of such
Guarantor from its obligations under its Subsidiary
Guarantee. Any Guarantor not released from its obligations
under its Subsidiary Guarantee will remain liable for the
full amount of principal of, interest, premium and Liquidated
Damages, if any, on the Notes and for the other obligations
of any Guarantor under this Indenture as provided in this
Article 10.
(c) Each Subsidiary Guarantor will be released and relieved of
its obligations under this Supplemental Indenture in
accordance with, and subject to, Article 8 of the Indenture.
B-5
(d) In the event a Guarantor no longer Guarantees Obligation
under any Credit Facility of the Company, such Guarantor will
be released and relieved of its Obligations under its
Subsidiary Guarantee. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel
to the effect that such Guarantor no longer Guarantees
Obligations under any Credit Facilities of the Company, the
Trustee will execute any documents reasonably required in
order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of any Subsidiary
Guarantor, as such, will have any liability for any Obligations of the Company
or any Subsidiary Guarantor under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such Obligations or their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the Commission that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THIS SUPPLEMENTAL INDENTURE WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy will be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and will not affect the construction hereof.
10. THE TRUSTEE. The Trustee will not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Subsidiary Guarantors and the Company.
B-6
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as of the date
first above written.
Dated:___________________, _____
MEMBERWORKS INCORPORATED
By:______________________________________
Name:
Title:
Subsidiary Guarantors:
[EXISTING GUARANTORS]
[ADDITIONAL GUARANTORS]
By:_______________________
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION, as Trustee
By:_______________________
Name:
Title:
B-7
EXHIBIT C
FORM OF NOTATION ON SENIOR NOTE RELATING TO SUBSIDIARY GUARANTEE
Pursuant to the Indenture (the "Indenture") dated as of April 13,
2004 among MemberWorks Incorporated, the Guarantors party thereto (each a
"Guarantor" and collectively the "Guarantors") and LaSalle Bank National
Association, as trustee (the "Trustee"), each Guarantor (i) has jointly and
severally unconditionally guaranteed (a) the due and punctual payment of the
principal of, interest, premium and Liquidated Damages, if any, on the Notes,
whether at maturity or on an interest payment date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal of, interest, premium and Liquidated Damages, if any, on the
Notes, (c) the due and punctual payment of all other Obligations of the Company
to the Holders or the Trustee under the Indenture or the Notes and (d) in case
of any extension of time of payment or renewal of any Notes or any of such other
Obligations, the same will be promptly paid in full when due in accordance with
the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise and (ii) has agreed to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under the Subsidiary Guarantee (as defined in the
Supplemental Indenture).
Notwithstanding the foregoing, in the event that the Subsidiary
Guarantee of any Guarantor would constitute or result in a violation of any
applicable fraudulent conveyance or similar law of any relevant jurisdiction,
the liability of such Guarantor under its Subsidiary Guarantee will be reduced
to the maximum amount permissible under such fraudulent conveyance or similar
law.
Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately. Each Guarantor agreed that
this is a guarantee of payment and not a guarantee of collection.
The Subsidiary Guarantee will be binding upon each Guarantor and
its successors and assigns and will inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party will automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
The Subsidiary Guarantee will not be valid or obligatory for any
purpose until the certificate of authentication on the Note upon which the
Subsidiary Guarantee is noted has been executed by the Trustee under the
Indenture by the manual or facsimile signature of one of its authorized
officers. Capitalized terms used herein have the meaning assigned to them in the
Indenture.
C-1
*By:___________________________
Name:
Title:
__________________________
* Please add signature lines for guarantors as required.
C-2
