EXHIBIT 4.1
EXECUTION COPY
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INDENTURE
Dated as of December 15, 1993
between
XXX RIVER INC.,
as Issuer,
and
MARINE MIDLAND BANK, N.A.,
as Trustee
________________________
$120,000,000 10-1/8% Senior Subordinated Notes due 2003
________________________
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions................................................................................ 1
Section 1.02. Other Definitions.......................................................................... 15
Section 1.03. Incorporation by Reference of Trust, Indenture Act......................................... 15
Section 1.04. Rules Of Construction...................................................................... 15
ARTICLE II
THE SECURITIES
Section 2.01. Form and Dating............................................................................ 16
Section 2.02. Execution and Authentication............................................................... 16
Section 2.03. Registrar and Paying Agent................................................................. 17
Section 2.04. Paying Agent to Hold Money in Trust........................................................ 17
Section 2.05. Securityholder Lists....................................................................... 17
Section 2.06. Registration of Transfer and Exchange...................................................... 18
Section 2.07. Replacement Securities..................................................................... 18
Section 2.08. Outstanding Securities..................................................................... 18
Section 2.09. Treasury Securities........................................................................ 19
Section 2.10. Temporary Securities....................................................................... 19
Section 2.11. Cancellation............................................................................... 19
Section 2.12. Defaulted Interest......................................................................... 19
Section 2.13. Persons Deemed Owners...................................................................... 20
Section 2.14. Computation of Interest.................................................................... 20
Section 2.15. Predecessor Securities..................................................................... 20
ARTICLE III
COVENANTS
Section 3.01. Payment of Securities...................................................................... 20
Section 3.02. Limitation on Indebtedness................................................................. 20
Section 3.03. Limitation on Guarantees by Subsidiaries of Issuer's Indebtedness.......................... 20
Section 3.04. Limitation on Liens........................................................................ 21
Section 3.05. Limitation on Sale and Leaseback Transactions.............................................. 22
Section 3.06. Limitation on Restricted Payments.......................................................... 22
Section 3.07. Limitation on Issuance and Sale of Capital Stock of Subsidiaries........................... 23
Section 3.08. Limitation on Specified Asset Sales........................................................ 23
Section 3.09. Transactions with Affiliates............................................................... 25
Section 3.10. Limitation on Dividend Restrictions Affecting Subsidiaries................................. 25
Section 3.11. Limitation on Certain Subordinated Indebtedness............................................ 26
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Section 3.12. Repurchase of Securities at Option of the Holder upon Change of Control ................... 26
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of Securities........................ 28
Section 3.14. Corporate Existence........................................................................ 28
Section 3.15. Sec Reports................................................................................ 28
Section 3.16. Compliance Certificates.................................................................... 28
Section 3.17. Notice of Defaults......................................................................... 28
Section 3.18. Payment of Taxes And Other Claims.......................................................... 28
Section 3.19. Maintenance of Properties; Insurance; Books and Records; Compliance with Law............... 29
Section 3.20. Waiver Of Stay, Extension Or Usury Laws.................................................... 29
ARTICLE IV
REDEMPTION
Section 4.01. Notice to Trustee.......................................................................... 30
Section 4.02. Selection of Securities to be Redeemed..................................................... 30
Section 4.03. Notice of Redemption....................................................................... 30
Section 4.04. Effect of Notice of Redemption............................................................. 31
Section 4.05. Deposit of Redemption Price................................................................ 31
Section 4.06. Securities Redeemed in Part................................................................ 31
ARTICLE V
MERGER, CONSOLIDATION AND SALE OF ASSETS
Section 5.01. When Issuer May Merge, etc................................................................. 32
Section 5.02. Successor Corporation Substituted.......................................................... 32
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.......................................................................... 32
Section 6.02. Acceleration............................................................................... 34
Section 6.03. Other Remedies............................................................................. 34
Section 6.04. Waiver of Past Defaults.................................................................... 35
Section 6.05. Control by Majority........................................................................ 35
Section 6.06. Limitation on Suits........................................................................ 35
Section 6.07. Rights of Holders to Receive Payment....................................................... 35
Section 6.08. Collection Suit by Trustee................................................................. 35
Section 6.09. Trustee May File Proofs of Claim........................................................... 36
Section 6.10. Application of Moneys Collected by Trustee................................................. 36
Section 6.11. Undertaking for Costs...................................................................... 36
Section 6.12. Parties May be Restored to Former Position and Rights in Certain Circumstances............. 37
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ARTICLE VII
TRUSTEE
Section 7.01. Duties of Trustee......................................................................... 37
Section 7.02. Rights of Trustee......................................................................... 38
Section 7.03. Individual Rights of Trustee.............................................................. 38
Section 7.04. Trustee's Disclaimer...................................................................... 38
Section 7.05. Notice of Default......................................................................... 38
Section 7.06. Reports by Trustee to Holders............................................................. 38
Section 7.07. Compensation and Indemnity................................................................ 39
Section 7.08. Replacement of Trustee.................................................................... 39
Section 7.09. Successor Trustee by Merger, etc.......................................................... 40
Section 7.10. Eligibility; Disqualification............................................................. 40
Section 7.11. Preferential Collection of Claims Against the Issuer...................................... 41
ARTICLE VIII
DEFEASANCE; SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
Section 8.01. Defeasance................................................................................ 41
Section 8.02. Satisfaction and Discharge................................................................ 42
Section 8.03. Application By Trustee of Funds Deposited for Payment of Securities....................... 43
Section 8.04. Paying Agent to Repay Moneys Held......................................................... 43
Section 8.05. Return of Unclaimed Moneys................................................................ 43
Section 8.06. Indemnity for Government Obligations...................................................... 43
Section 8.07. Reinstatement............................................................................. 43
ARTICLE IX
AMENDMENTS
Section 9.01. Without Consent of Holders................................................................ 43
Section 9.02. With Consent of Holders................................................................... 44
Section 9.03. Compliance with Trust Indenture Act....................................................... 45
Section 9.04. Revocation and Effect of Consents......................................................... 45
Section 9.05. Notation on or Exchange of Securities..................................................... 45
Section 9.06. Trustee to Sign Amendments, etc........................................................... 45
ARTICLE X
SUBORDINATION OF SECURITIES
Section 10.01. Agreement to Subordinate.................................................................. 45
Section 10.02. Liquidation, Dissolution, Bankruptcy...................................................... 46
Section 10.03. Payment and Non-payment Defaults.......................................................... 47
Section 10.04. Acceleration of Payment of Securities..................................................... 48
Section 10.05. Subrogation............................................................................... 48
Section 10.06. Relative Rights........................................................................... 48
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Section 10.07. Subordination may not be Impaired......................................................... 48
Section 10.08. Rights of Trustee and Paying Agent........................................................ 49
Section 10.09. Distribution of Notice to Representative.................................................. 49
Section 10.10. Article X Not to Prevent Events of Default or Limit Right to Accelerate.................. 49
Section 10.11. Trust Moneys not Subordinated............................................................. 49
Section 10.12. Trustee Entitled to Rely.................................................................. 50
Section 10.13. Trustee to Effectuate Subordination....................................................... 50
Section 10.14. Trustee not Fiduciary for Holders of Senior Indebtedness.................................. 50
Section 10.15. Reliance by Holders of Senior Indebtedness on Subordination Provisions.................... 50
Section 10.16. Reinstatement............................................................................. 50
ARTICLE XI
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.............................................................. 51
Section 11.02. Notices................................................................................... 51
Section 11.03. Communication by Holders with Other Holders............................................... 52
Section 11.04. Certificate and Opinion as to Conditions Precedent........................................ 52
Section 11.05. Statements Required in Certificate or Opinion............................................. 52
Section 11.06. Rules by Trustee and Agents............................................................... 52
Section 11.07. Legal Holidays............................................................................ 52
Section 11.08. No Recourse Against Others................................................................ 52
Section 11.09. Duplicate Originals....................................................................... 53
Section 11.10. Governing Law............................................................................. 53
Section 11.11. Successors................................................................................ 53
Section 11.12. Severability.............................................................................. 53
Section 11.13. Counterpart Originals..................................................................... 53
Exhibit A Form of Security
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EXECUTION COPY
INDENTURE dated as of December 15, 1993, between XXX RIVER INC., a Georgia
corporation (the "Issuer"), as issuer, and MARINE MIDLAND BANK, N.A., a national
banking association, as trustee (the "Trustee").
Each party agrees for the benefit of the other party and for the equal
and ratable benefit of the Holders of the Issuer's 10-1/8% Senior Subordinated
Notes due 2003 (the "Securities"), as follows:
ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions. The terms defined in this Section (except
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as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture shall have the respective meanings specified
in this Section. All other terms used in this Indenture which are defined in the
TIA or which are by reference therein defined in the Securities Act, shall have
the meanings (except as herein otherwise expressly provided or unless the
context otherwise requires) assigned to such terms in the TIA and in the
Securities Act (if applicable) as in force at the date of this Indenture as
originally executed.
"Acceptable Bank" means any bank or trust company organized under the
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laws of the United States or any State thereof or the District of Columbia,
having capital, surplus and undivided profits totaling more than $100,000,000.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
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the time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from a Person, other than Indebtedness Incurred in
connection with, or in contemplation of, such Person becoming a Subsidiary or
such acquisition, as the case may be. Acquired Indebtedness shall be deemed to
have been Incurred on the date of the related acquisition of assets from the
Person or the date the acquired Person becomes a Subsidiary.
"Additional Assets" means any Property (other than cash, cash
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equivalents or securities) used in the textile or apparel business or any
business ancillary thereto, or securities representing 100% of the equity of an
issuer engaged in any such business.
"Affiliate" of any specified Person means (i) any other Person which,
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directly or indirectly, is in control of, is controlled by or is under common
control with, such Person or (ii) any other Person who is a director or officer
of such specified Person or of any Person described in clause (i) above. As used
in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") means possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise). For purposes of this definition,
beneficial ownership, direct or indirect, of 10% or more of the
Voting Stock (on a fully diluted basis), or the right to acquire such Voting
Stock (whether or not currently exercisable), of the Parent or the Issuer shall
be deemed to be control of the Parent or the Issuer, respectively.
"Agent" means any Registrar, Paying Agent or agent for service of
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notices and demands.
"Asset Sale" means with respect to any Person, any transfer,
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conveyance, sale, lease or other disposition (including, without limitation,
dispositions pursuant to any consolidation or merger) by such Person or any of
its Subsidiaries in any single transaction or series of transactions of (i)
shares of Capital Stock or other ownership interests of a Subsidiary, (ii) all
or substantially all of the Property of an operating unit or business of such
Person or any of its Subsidiaries, or (iii) any other Property (including,
without limitation, securities in or other ownership interests of another
Person) of such Person or any of its Subsidiaries outside the ordinary course of
business; provided, however, that the term "Asset Sale" shall not include (i)
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any asset disposition (including, without limitation, dispositions pursuant to
any consolidation or merger) permitted pursuant to Section 5.01 which
constitutes a disposition of all or substantially all of the Issuer's assets,
(ii) sales (including pursuant to factoring arrangements) or other dispositions
of inventory, receivables and other current assets in the ordinary course of
business, (iii) a disposition by a Subsidiary to the Issuer or by the Issuer or
a Subsidiary to a wholly-owned Subsidiary, (iv) sales of obsolete equipment in
the ordinary course of business and (v) the disposition by the Issuer of its
vacant facility and yarn spinning plant located in Xxxxxx, Alabama and Wetumpka,
Alabama, respectively.
"Average Life" means, as of the date of determination, with reference
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to any debt security or Redeemable Stock, the quotient obtained by dividing (i)
the sum of the products of (x) the number of years from the date of
determination to the dates of each successive scheduled principal or redemption
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security or Redeemable Stock multiplied in each case
by (y) the amount of such principal or redemption payment by (ii) the sum of all
such principal or redemption payments; provided, however, that with respect to
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any guarantee, the dates of scheduled principal payments shall be deemed to be,
for this purpose, the dates of scheduled principal payments of the Indebtedness
thereby guaranteed.
"Bank Credit Agreement" means the $60 million credit facility to be
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entered into on or about the Issue Date by the Issuer and Barclays Business
Credit, Inc., and other banks and financial institutions, as in effect on the
Issue Date, and as the same may be amended, restated, supplemented or otherwise
modified from time to time, and including any agreement with the same or
different lenders extending the maturity of, or restructuring or replacing all
or any portion of the Indebtedness under, such credit facility or any successor
credit facility.
"Board of Directors" means, with respect to any Person, the board of
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directors of such Person or any duly authorized committee of such board of
directors.
"Board Resolution" means, with respect to any Person, a copy of a
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resolution certified by the secretary or an assistant secretary of such Person
to have been duly adopted by
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the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday as defined in
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Section 11.07.
"Capital Expenditure Indebtedness" means Indebtedness Incurred by any
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Person to finance the purchase or construction of any Property acquired or
constructed by such Person so long as (a) the purchase or construction price for
such Property is or should be capitalized in accordance with GAAP, (b) the
acquisition or construction of such Property is not part of an acquisition of a
Person or business unit and (c) such Indebtedness is Incurred within 360 days of
the acquisition or completion of construction of such Property.
"Capital Lease Obligation" of any Person means any obligation to pay
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rent or other payment amounts under a lease of (or other arrangement conveying
the right to use) Property of such Person which is required to be classified and
accounted for as a capital lease or a liability on the face of a balance sheet
of such Person in accordance with GAAP; and the amount of such obligation shall
be the capitalized amount thereof, determined in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests
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(including partnership interests), rights to purchase, warrants, options,
participations or other equivalents of or interests in the equity (however,
designated, whether voting or non-voting, now outstanding or hereafter issued)
in such Person, including, without limitation, any Preferred Stock in such
person, but excluding any Redeemable Stock and any debt securities convertible
into or exchangeable for such equity.
"Change of Control" means (i) prior to an initial Public Equity
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Offering, if any, the Existing Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all securities that such
person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of a majority of the
Voting Stock of the Relevant Company, (ii) on and after an initial Public Equity
Offering, any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Existing Holders, becomes the
"beneficial owner" (defined as aforesaid), directly or indirectly, of more than
35% of the Voting Stock of the Relevant Company and such amount of Voting Stock
is greater than the aggregate amount of Voting Stock of the Relevant Company
then held by the Existing Holders, (iii) the Relevant Company consolidates with,
or merges with or into, another Person, or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
Person or Persons in any transaction or series of related transactions, or any
Person consolidates with, or merges with or into, the Relevant Company in a
transaction or series of related transactions with the effect that any "person"
or "group" (defined as aforesaid), other than the Existing Holders, becomes the
"beneficial owner" (defined as aforesaid), directly or indirectly, of a majority
of the Voting Stock of the surviving or transferee corporation, or (iv) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Relevant Company (together with
any new directors whose election to such Board of Directors or whose nomination
for election by the
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stockholders of the Relevant Company was approved by a vote of 66 2/3% of the
directors still in office who were either directors at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of the
Relevant Company then in office; provided, however, that for purposes the
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foregoing clauses (i) through (iv), a Change of Control shall not exist so long
as either (i) MILP or (ii) the Management Stockholders continues to have the
right, directly or indirectly, to appoint at least one-half of the members of
the Board of Directors of the Relevant Company.
"Commodity Agreement" means, with respect to any Person, any forward
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contract, futures contract or option or other agreement or arrangement, or
combination thereof, entered into in the ordinary course of such Person's
business and designed to provide protection against fluctuations in the price of
any commodity, including, without limitation, cotton.
"Consolidated EBITDA" means with respect to any Person for any period,
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the Consolidated Net Income of such Person and its Subsidiaries for such period
plus, to the extent reflected in the consolidated income statement of such
Person and its Subsidiaries for such period from which Consolidated Net Income
is determined, without duplication, (i) Consolidated Interest Expense, (ii)
consolidated income tax expense, (iii) consolidated depreciation expense, (iv)
consolidated amortization expense and (v) all other consolidated non-cash
charges (excluding any non-cash charge to the extent that it requires an accrual
of or a reserve for cash disbursements for any future period).
"Consolidated Fixed Charge Coverage Ratio" means, as of the date of
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the transaction giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio (the "Transaction Date"), the ratio of (i) the aggregate
amount of Consolidated EBITDA of the Issuer and its consolidated Subsidiaries
for the four full fiscal quarters immediately prior to the Transaction Date to
(ii) the aggregate Consolidated Interest Expense of the Issuer and its
consolidated Subsidiaries for the four full fiscal quarters immediately prior to
the Transaction Date. In making the foregoing calculation, (A) pro forma effect
shall be given to: (1) any Indebtedness Incurred subsequent to the end of the
four-fiscal-quarter period referred to in clause (i) and prior to the
Transaction Date (other than Indebtedness Incurred under a revolving credit or
similar arrangement or any predecessor revolving credit or similar arrangement
to the extent of the commitment thereunder on the last day of such period); (2)
any Indebtedness Incurred during such four-fiscal-quarter period to the extent
such Indebtedness is outstanding at the Transaction Date; and (3) the Incurrence
of any Indebtedness giving rise to the need to calculate the Consolidated Fixed
Charge Coverage Ratio and, in each case, the application of the net proceeds
therefrom, including to refinance other Indebtedness, as if such Indebtedness
was Incurred, and the application of such proceeds occurred, on the first day of
such four-fiscal-quarter period; (B) Consolidated Interest Expense attributable
to interest on any Indebtedness (whether existing or being Incurred) bearing a
floating interest rate shall be computed as if the rate in effect on the
Transaction Date (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness) had been the applicable rate for the entire
period; (C) subject to clause (D) below, there shall be excluded from
Consolidated Interest Expense any Consolidated Interest Expense related to any
amount of Indebtedness that was outstanding during such four-fiscal-quarter
period or thereafter but that is not outstanding or is to be repaid on the
Transaction Date; and (D) Consolidated Interest Expense attributable to interest
on any
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Indebtedness under a revolving credit or similar arrangement (or any predecessor
revolving credit or similar arrangement) shall be computed based upon the
average daily balance of such Indebtedness during the four-fiscal-quarter
period. In addition, if since the beginning of such four-fiscal-quarter period,
the Issuer or any of its Subsidiaries shall have (x) engaged in any Asset Sale
or (y) acquired any material assets out of the ordinary course of business, then
(1) in the case of any such Asset Sale, Consolidated EBITDA for such period
shall be reduced by an amount equal to the Consolidated EBITDA (if positive), or
increased by an amount equal to the Consolidated EBITDA (if negative), directly
attributable to the assets which are the subject of such Asset Sale for such
period calculated on a pro forma basis as if such Asset Sale and any related
refinancing, retirement or discharge of Indebtedness had occurred on the first
day of such period and (2) in the case of any such asset acquisition,
Consolidated EBITDA shall be calculated on a pro forma basis as if such asset
acquisition had occurred on the first day of such four-fiscal-quarter period.
"Consolidated Interest Expense" means, with respect to any Person for
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any period, without duplication, the sum of (i) the aggregate amount of cash and
non-cash interest expense (including capitalized interest) of such Person and
its Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP (including, without limitation, (v) any amortization of
debt discount, (w) net costs associated with Interest Rate Protection Agreements
(including any amortization of discounts), (x) the interest portion of any
deferred payment obligation, (y) all accrued interest and (z) all commissions,
discounts, commitment fees, origination fees and other fees and charges owed
with respect to Indebtedness) paid or accrued, or scheduled to be paid or
accrued, during such period, plus (ii) dividends in respect of Preferred Stock
and Redeemable Stock of such Person (and of its Subsidiaries if paid to a Person
other than such Person or its wholly-owned Subsidiaries) declared and payable in
cash or, in the case of Redeemable Stock, in kind, plus (iii) the portion of any
rental obligation of such Person and its Subsidiaries in respect of any Capital
Lease Obligation allocable to interest expense as determined on a consolidated
basis in accordance with GAAP, plus (iv) to the extent any Indebtedness of any
other Person is guaranteed by such Person or any of its Subsidiaries, the
aggregate amount of interest paid, accrued or scheduled to be paid or accrued,
by such other Person during such period attributable to any such Indebtedness,
plus (v) the amount of any cash contribution by such Person or any of its
Subsidiaries to an employee stock ownership plan to the extent such
contributions are used by an employee stock ownership plan to pay interest.
"Consolidated Net Income" of any Person means, for any period, the
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aggregate net income (or net loss) of such Person and its Subsidiaries for such
period on a consolidated basis determined in accordance with GAAP, adjusted, to
the extent included in calculating such net income (or net loss), by excluding,
without duplication (a) all items classified as extraordinary, (b) the portion
of net income (or net loss) of such Person and its consolidated Subsidiaries
attributable to minority interests in unconsolidated Persons, except to the
extent that, in the case of net income, cash dividends or distributions have
actually been received by such Person or one of its consolidated Subsidiaries
(subject, in the case of a dividend or distribution received by a Subsidiary of
such Person, to the limitation contained in clause (f) below) and, in the case
of net loss, such Person or any Subsidiary of such Person has actually
contributed, lent or transferred cash to such unconsolidated Person, (c) the net
income (or net loss) of any other Person acquired by such Person or any of its
Subsidiaries in a pooling-of-interests transaction for any period prior to the
date of such acquisition, (d) any gain or loss, net of taxes, realized on the
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termination of any employee pension benefit plan, (e) net gains or losses in
respect of Asset Sales by such Person or its Subsidiaries, and (f) the net
income of any Subsidiary of such Person to the extent that the declaration or
payment of dividends or other distributions to such Person is restricted,
directly or indirectly, by operation of the term of its charter or by-laws or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders.
"Consolidated Net Tangible Assets" means the total amount of assets of
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the Issuer and its Subsidiaries (less applicable depreciation, amortization and
other valuation reserves) after deducting therefrom (i) all liabilities of the
Issuer and its Subsidiaries and (ii) all goodwill, trade names, trademarks,
patents, patent applications, copyrights, licenses, non-compete agreements,
unamortized debt discount and expense and all like intangibles, all as set forth
on the most recently available consolidated balance sheet of the Issuer and its
Subsidiaries prepared in conformity with GAAP.
"Consolidated Net Worth" of any Person means the stockholders' equity
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of such Person and its Subsidiaries, as determined on a consolidated basis in
accordance with GAAP, less (to the extent included in stockholders' equity)
amounts attributable to Redeemable Stock of such Person or its Subsidiaries.
"Corporate Trust Office" means the office of the Trustee located in
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New York, New York, at which at any particular time its corporate services
business shall be principally administered which office at the date of execution
of this Indenture is located at, 000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attn: Corporate Trust Administration.
"Default" means any event, act or condition the occurrence of which
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is, or after notice or the passage of time or both would be, an Event of
Default.
"Defaulted Interest" means the interest provided for in Section 2.12.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Exchange Rate Contract" means, with respect to any Person, any
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currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, entered into in the
ordinary course of such Person's business and designed to provide protection
against fluctuations in currency exchange rates.
"Existing Holders" means the Management Stockholders and MILP.
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"Fair Market Value" means, with respect to any assets to be
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transferred pursuant to any Asset Sale or Sale and Leaseback Transaction or any
non-cash consideration or Property received by any Person, the fair market value
of such consideration or Property as determined in good faith by the Board of
Directors of the Issuer, including a majority of the disinterested directors, as
evidenced by a Board Resolution; provided that if such resolution indicates that
such Fair Market Value exceeds $25 million, such resolution shall be accompanied
by the written opinion of a nationally recognized firm of investment bankers,
accountants, industry
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consultants or other appropriately qualified experts that such consideration or
Property is fair to such Person.
"GAAP" means, unless the context otherwise requires, United States
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generally accepted accounting principles as in effect on the date of this
Indenture.
"guarantee" means any obligation, contingent or otherwise, of a Person
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guaranteeing or having the economic effect of guaranteeing any Indebtedness or
other obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, and any obligation, direct or indirect,
contingent or otherwise of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or other
obligation of the primary obligor or to purchase (or advance or supply funds for
the purchase of) any security for the payment of such Indebtedness or other
obligation of the primary obligor (in each case whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take or pay, or to maintain financial
statement conditions or otherwise), (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part) (and "guaranteed", "guaranteeing" and
"guarantor" shall have meanings correlative to the foregoing); provided,
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however, that the term guarantee shall not include (i) endorsements for
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collection or deposit, in either case, in the ordinary course of business or
(ii) the Issuer's obligations under the Processing Agreement effective as of
January 1, 1992, between the Issuer and X.X. XxXxxx de Nemours & Company.
"Holder" or "Securityholder" means the person in whose name a Security
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is registered in the register maintained by the Registrar as provided in Section
2.03.
"Incur" means, with respect to any Indebtedness or other obligation of
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any Person, to create, issue, incur (by conversion, exchange or otherwise),
extend, assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or obligation on the balance sheet of
such Person (and "Incurrence", "Incurred" and "Incurring" shall have meanings
correlative to the foregoing); provided, however, that a change in GAAP that
-------- -------
results in an obligation of such Person that exists at such time becoming
Indebtedness shall not be deemed an Incurrence of such Indebtedness.
"Indebtedness" means at any time (without duplication), with respect
------------
to any Person, whether or not contingent, (i) the principal of and premium (if
any) in respect of (A) indebtedness of such Person for money borrowed and (B)
indebtedness and all other obligations of such Person evidenced by notes,
debentures, bonds or other similar instruments for the payment of which such
person is responsible or liable; (ii) all Capital Lease Obligations of such
Person; (iii) all obligations of such Person issued or assumed as the deferred
purchase price of property or services, all conditional sale obligations of such
Person and all obligations of such Person under any title retention agreement
(but excluding trade accounts payable and other accrued liabilities arising in
the ordinary course of business); (iv) all obligations of such Person for the
reimbursement of any obligor on any letter of credit, banker's acceptance or
similar credit transaction (other than obligations with respect to letters of
credit entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if and
7
to the extent drawn upon, such drawing is reimbursed no later than the fifth
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit); (v) the amount of all obligations of
such Person with respect to the redemption, repayment or other repurchase of,
any Redeemable Stock; (vi) all obligations of the type referred to in clauses
(i) through (v) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including guarantees of such
obligations and dividends; or (vii) all obligations of the type referred to in
clauses (i) through (vi) of other Persons secured by any Lien on any Property of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligations being deemed to be the lesser of the Fair Market
Value of such Property at such date of determination or the amount of the
obligation so secured. The amount of the Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
as described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date; provided, however, that the amount outstanding at any time of any
-------- -------
Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
GAAP.
"Indenture" means this Indenture, as amended, supplemented or modified
---------
from time to time.
"Interest Rate Protection Agreement" means, with respect to any
----------------------------------
Person, any interest rate swap agreement, interest rate cap or collar agreement
or other financial agreement or arrangement designed to protect such Person or
its Subsidiaries against fluctuations in interest rates, as in effect from time
to time.
"Investment" in any Person means any direct or indirect loan or
----------
advance to, any net payment on a guarantee of, the acquisition of any stock,
bonds, notes, debentures, other securities or equity interest or obligation of,
or capital contribution to or other investment in, such Person; provided,
--------
however, that investments shall not include extensions of trade credit on
-------
commercially reasonable terms in accordance with normal trade practices. The
term "Invest" has a correlative meaning.
"Issue Date" means the date of original issue of the Securities by the
----------
Issuer.
"Issuer" means the party named as such in this Indenture, until a
------
successor replaces it pursuant to this Indenture and thereafter means the
successor.
"Lien" means, with respect to any Property, any mortgage or deed of
----
trust, pledge, hypothecation, assignment, security interest, lien (statutory or
other), charge, easement, encumbrance, preference, priority or other security or
similar agreement or preferential arrangement of any kind or nature whatsoever
on or with respect to such Property (including, without limitation, any
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing).
8
"Management Stockholders" means (i) Xxxxxx X. Xxxxxx, Xx., Xxxxxxx X.
-----------------------
Xxxxxxxx and Xxxxx X. Xxxx and certain of their family members who beneficially
own Voting Stock of the Parent on the date of this Indenture (or, in the case of
the death or incompetence of any such person or family member, the estate,
heirs, executor, administrator, committee or other personal representative of
such person or family member (collectively "heirs")) or any Person controlled,
directly or indirectly, by such person or family member or his heirs and (ii)
any employee of the Issuer who acquires common stock of the Issuer pursuant to
the Parent's Amended and Restated Stock Option Plan, to the extent such common
stock is required to be, and is, surrendered by Xxxxxx X. Xxxxxx, Xx. to the
Parent. Notwithstanding the foregoing, no person who is employed by a competitor
of the Issuer shall be considered to be a Management Stockholder.
"MILP" means Mezzanine Investment Limited Partnership-BDR, its
----
successors and assigns, provided that Mezzanine Investment Limited Partnership-
--------
BDR or such successor or assign is either Metropolitan Life Insurance Company or
an Affiliate of Metropolitan Life Insurance Company.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
-----
thereto.
"Net Cash Proceeds" from any Asset Sale by any Person or its
-----------------
Subsidiaries means cash and cash equivalents received in respect of the
Properties sold net of (i) all reasonable out-of-pocket fees and expenses of
such Person or such Subsidiary Incurred in connection with such Asset Sale,
including, without limitation, all legal, title and recording tax expenses,
brokerage commissions, underwriting discounts and other fees and expenses
Incurred (but excluding any finder's fee or broker's fee payable to any
Affiliate of such Person) and all federal, state provincial, foreign and local
taxes arising in connection with such Asset Sale that are paid or required to be
accrued as a liability under GAAP by such Person or its Subsidiaries, (ii) all
payments made by such Person or its Subsidiaries on any Indebtedness which is
secured by such Properties in accordance with the terms of any Lien upon or with
respect to such Properties or which must, by the terms of such Lien, or in order
to obtain a necessary consent to such Asset Sale or by applicable law, be repaid
out of the proceeds from such Asset Sale, (iii) all contractually required
distributions and other payments made to minority interest holders (but
excluding distributions and payments to Affiliates of such Person) in
Subsidiaries of such Person as a result of such Asset Sale and (iv) appropriate
amounts provided by such Person or its Subsidiary as a reserve, in accordance
with GAAP, against any liabilities associated with such Asset Sale and retained
by such Person or such Subsidiary after such transaction, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
relating to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale; provided, however, that, in the
-------- -------
event that any consideration for an Asset Sale (which would otherwise constitute
Net Cash Proceeds) is required, to be held in escrow pending determination of
whether a purchase price adjustment will be made, such consideration (or any
portion thereof) shall become Net Cash Proceeds only at such time as it is
released to such Person or its Subsidiaries from escrow; and provided further,
-------- -------
however, that any non-cash consideration received in connection with an Asset
-------
Sale which is subsequently converted to cash shall be deemed to be Net Cash
Proceeds at such time and shall thereafter be applied in accordance with Section
3.08.
9
"Non-Payment Default" means any event of default (other than a Payment
-------------------
Default) the occurrence of which entitles one or more Persons to accelerate
immediately (all required notices having been given and all applicable grace
periods having expired) the maturity of any Specified Senior Indebtedness
without any further notice (except such notice as may be required to effect such
acceleration).
"Officer" of any Person means the Chief Executive Officer, the
-------
President, any Vice President, the Treasurer, the Director of Finance, the
Secretary or the Controller of such Person.
"Officers' Certificate" means a certificate signed by two Officers or
---------------------
by an Officer and an Assistant Treasurer, Assistant Secretary or Assistant
Controller of any Person that shall comply with the applicable provisions of
Sections 11.04 and 11.05.
"Opinion of Counsel" means a written opinion from legal counsel
------------------
prepared in accordance with Sections 11.04 and 11.05. The counsel may be an
employee of or counsel to the Issuer.
"Parent" means Braelan Corp., a Delaware corporation and the sole
------
shareholder of the Issuer, and any successor.
"Payment Default" means any default in the payment of principal of,
---------------
premium (if any) or interest on any Senior Indebtedness beyond any applicable
grace period with respect thereto whether at stated maturity or as a result of
acceleration or otherwise.
"Permitted Indebtedness" means any and all of the following: (i)
----------------------
Indebtedness Incurred by the Issuer under the Bank Credit Agreement not to
exceed the greater of (A) $60 million at any one time outstanding and (B) 85% of
the book value of the Issuer's consolidated accounts receivable plus 55% of the
book value of the Issuer's consolidated inventory; (ii) Indebtedness evidenced
by the Securities; (iii) Indebtedness of the Issuer and its Subsidiaries under
Interest Rate Protection Agreements, provided that the obligations under such
agreements are related to payment obligations on Indebtedness otherwise
permitted by the terms of this Section; (iv) Indebtedness of the Issuer and its
Subsidiaries to any of the Issuer's wholly-owned Subsidiaries or the Parent so
long as such Indebtedness is held by one of the Issuer's wholly-owned
Subsidiaries or the Parent and (in the case of Indebtedness of the Issuer) is
subordinated in right of payment to the Securities; (v) Indebtedness of the
Issuer and its Subsidiaries outstanding on the date of this Indenture; (vi)
Indebtedness of the Issuer and its Subsidiaries under Exchange Rate Contracts
and Commodity Agreements; (vii) Indebtedness of any Person which shall merge
into or consolidate with the Issuer in accordance with Section 5.01, which
Indebtedness was not Incurred in anticipation of such merger or consolidation
and was outstanding prior to such merger or consolidation; (viii) Indebtedness
of the Issuer Incurred in connection with a prepayment of Securities pursuant to
a Change of Control, provided that the principal amount of such Indebtedness
does not exceed 101% of the principal amount of the Securities prepaid plus the
amount of customary fees and expenses payable by the Issuer in connection
therewith, and such Indebtedness (A) has an Average Life to Stated Maturity
greater than the remaining Average Life to Stated Maturity of the Securities and
(B) has a final maturity date later than the final maturity date of the
Securities; (ix) Acquired Indebtedness, provided that
10
after giving pro forma effect to the Incurrence thereof, the Issuer could Incur
$1.00 of additional Indebtedness pursuant Section 3.02 (other than as Permitted
Indebtedness); (x) Indebtedness of the Issuer or any Subsidiary in respect of
Capital Lease obligations or Capital Expenditure Indebtedness directly Incurred
by the Issuer or such Subsidiary, provided that (A) the principal amount of such
Indebtedness does not exceed the Fair Market Value of the Property leased,
acquired or constructed, (B) the Property so leased, acquired or constructed is
to be used in the textile or apparel business or any business ancillary thereto
and (C) the aggregate principal amount of all Indebtedness Incurred pursuant to
this clause (x) does not exceed $35 million at any one time outstanding; (xi)
Indebtedness of the Issuer Incurred pursuant to industrial revenue or similar
tax-free obligations not to exceed $10 million at any one time outstanding;
(xii) Indebtedness of the Issuer not otherwise permitted to be Incurred pursuant
to this Section in an aggregate principal amount not to exceed $25 million; and
--
(xiii) Indebtedness Incurred by the Issuer or a Subsidiary in exchange for, or
the proceeds of which are used to refinance, Indebtedness Incurred by the Issuer
or such Subsidiary, respectively, referred to in clauses (i) through (xii) of
this paragraph, provided that (A) such Indebtedness is in an aggregate principal
amount not in excess of the aggregate principal amount then outstanding of the
Indebtedness being exchanged or refinanced plus any premium required by the
terms thereof and the amount of customary fees and expenses payable by the
Issuer in connection therewith and (B) if the Indebtedness being exchanged or
refinanced is a Subordinated Obligation, (1) such Indebtedness is subordinate to
the Securities to at least the same extent, (2) such Indebtedness has a final
maturity date later than the final maturity date of the Indebtedness being
exchanged or refinanced and (3) such Indebtedness has an Average Life to Stated
Maturity at the time such Indebtedness is Incurred that is greater than the
Average Life to Stated Maturity of the Indebtedness being exchanged or
refinanced.
"Permitted Investments" means any and all of the following: (a)
---------------------
U.S. Government Obligations maturing within one year of the date of purchase;
(b) certificates of deposit from or acceptances accepted or guaranteed by
Acceptable Banks due within one year, or demand deposits maintained in the
ordinary course of business with Acceptable Banks; (c) commercial paper maturing
within 180 days of original issue rated at the time of acquisition A-1 by S&P or
P-1 by Moody's; (d) Investments in a wholly-owned Subsidiary or in any other
Person as a result of which such other Person becomes a wholly-owned Subsidiary;
(e) Investments in money market funds organized under the laws of the United
States or any State thereof that invest substantially all their assets in any of
the Investments described in clause (a), (b) or (c) above; (f) loans or advances
to employees made in the ordinary course of business and not to exceed $1
million in the aggregate at any one time outstanding; and (g) negotiable
instruments held for collection, lease, utility and similar deposits, or stock,
obligations or securities received in settlement of debts owing to the Issuer or
a Subsidiary as a result of foreclosure, perfection or enforcement of any Lien,
in each case as to debt that arose in the ordinary course of business of the
Issuer or such Subsidiary.
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, trust, unincorporated organization,
government or any agency or political subdivision thereof or any other entity.
"Preferred Stock" of any Person means Capital Stock of such
---------------
Person of any class or series (however designated, whether voting or non-voting,
now outstanding or hereafter
11
issued) which is preferred as to the payment of dividends or distributions, or
as to the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, over shares of Capital Stock of any
other class or series of such Person; provided, however, that "Preferred Stock"
-------- -------
shall not include Redeemable Stock.
"Property" means, with respect to any Person, any interest of
--------
such Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including, without limitation, Capital Stock in any
other Person.
"Public Equity Offering" means a bona fide underwritten public
----------------------
offering of Capital Stock of the Issuer or the Parent pursuant to an effective
registration statement under the Securities Act, as a result of which Capital
Stock of the Issuer or the Parent, as applicable, is distributed to the public.
"Redeemable Stock" of any Person means any equity security of
----------------
such Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or otherwise (including upon the
happening of an event), is required to be redeemed or is redeemable at the
option of the holder thereof, in whole or part, on or prior to the first
anniversary of the Stated Maturity of the Securities, or is exchangeable for
debt at any time, in whole or in part, on or prior to the first anniversary of
the Stated Maturity of the Securities.
"Relevant Company" means either (A) if the Issuer is a wholly-
----------------
owned subsidiary of the Parent, the Parent, or (B) if the Issuer is not a
wholly-owned subsidiary of the Parent, the Issuer.
"Representative" means the trustee, agent or representative (if
--------------
any) for an issue of Senior Indebtedness.
"Restricted Payment" means (i) a dividend or other distribution
------------------
declared and paid on the Capital Stock of the Issuer (including any payment in
connection with any merger or consolidation involving the Issuer) or to the
Issuer"s shareholders (other than dividends, distributions or payments made
solely in Capital Stock of the Issuer), or declared and paid to any Person other
than the Issuer or any of its wholly-owned Subsidiaries on the Capital Stock of
any Subsidiary, (ii) a payment made by the Issuer or any of its Subsidiaries to
purchase, redeem, acquire or retire for value any Capital Stock of the Issuer or
of any Affiliate of the Issuer (other than a purchase, redemption or acquisition
of Capital Stock from a wholly-owned Subsidiary of the Issuer), (iii) a payment
made by the Issuer or any of its Subsidiaries to redeem, repurchase, defease or
otherwise acquire or retire for value (including pursuant to mandatory
repurchase covenants), prior to any scheduled maturity, scheduled sinking fund
or mandatory redemption payment, any Subordinated Obligation or any Indebtedness
of the Parent, or (iv) any Investment other than a Permitted Investment by the
Issuer or a Subsidiary in any Person. The amount of any Restricted Payment, if
other than in cash, shall be the Fair Market Value of the Property transferred
by the Issuer or a Subsidiary, as the case may be.
"S&P" means Standard & Poor"s Corporation, or any successor
---
thereto.
"Sale and Leaseback Transaction" means, with respect to any
------------------------------
Person, any direct or indirect arrangement pursuant to which Property is sold or
transferred by such Person or a
12
Subsidiary of such Person and is thereafter leased back from the purchaser or
transferee thereof by such Person or one of its Subsidiaries.
"SEC" means the Securities and Exchange Commission and any
---
government agency succeeding to its functions.
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Senior Indebtedness" means, at any date, the principal of,
-------------------
premium (if any) and interest on (including interest accruing after the filing
of a petition initiating any proceeding under any Bankruptcy Law, whether or not
such interest is an allowed claim in such proceeding) any Indebtedness (other
than as otherwise provided in this definition) of the Issuer (or any successor
Issuer under this Indenture), whether outstanding on the date of this Indenture
or thereafter Incurred and whether at any time owing, actually or contingent,
unless, in the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities. Without limiting the generality of the foregoing, "Senior
Indebtedness" shall include all obligations of every nature of the Issuer from
time to time owed to the lenders under the Bank Credit Agreement, including fees
and expenses owing thereunder, and obligations with respect to any letters of
credit issued for the account of the Company under the Bank Credit Agreement,
whether outstanding on the date of this Indenture or thereafter Incurred;
provided, however, that any Indebtedness under any refinancing, refunding, or
-------- -------
replacement of the Bank Credit Agreement shall not constitute Senior
Indebtedness to the extent that the payment of the Indebtedness thereunder is
expressly subordinate to any other Indebtedness of the Issuer. Notwithstanding
the foregoing, "Senior Indebtedness" shall not include (i) Indebtedness
evidenced by the Securities, (ii) Indebtedness that is expressly subordinate or
junior in right of payment to any Indebtedness of the Issuer, (iii) Indebtedness
which, when Incurred and without respect to any election under Section 1111(b)
of Xxxxx 00, Xxxxxx Xxxxxx Code, is without recourse to the Issuer, (iv)
Indebtedness which is represented by Redeemable Stock, (v) to the extent that it
might constitute Indebtedness, any liability for foreign, federal, state, local
or other taxes owed or owing by the Issuer, (vi) that portion of any
Indebtedness which at the time of Incurrence is in violation of this Indenture,
(vii) any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities), and (viii) Indebtedness of or amounts owed by the
Issuer for compensation to employees or for services.
"Special Record Date" for the payment of any Defaulted Interest
-------------------
means a date fixed by the Issuer pursuant to Section 2.12.
"Specified Asset Sale" means an Asset Sale by the Issuer or any
--------------------
of its Subsidiaries in which the Fair Market Value of the shares, ownership
interests or other Property being sold, leased or otherwise disposed of, in a
single transaction or series of related transactions, exceeds $1 million.
"Specified Senior Indebtedness" means (i) all Senior Indebtedness
-----------------------------
under the Bank Credit Agreement and (ii) any other Senior Indebtedness which, at
the time of Incurrence, has an aggregate principal amount outstanding, together
with any commitments to lend additional
13
amounts, of at least $20,000,000 and is specifically designated in the
instrument evidencing such Senior Indebtedness as "Specified Senior
Indebtedness" by the Issuer.
"Stated Maturity" means, when used with respect to any security
---------------
or debt obligation, the date specified in such security or obligation as the
fixed date on which the principal or redemption price of such security or
obligation is due and payable and, when used with respect to any installment of
interest on a security or debt obligation, the fixed date on which such
installment of interest is due and payable. The Stated Maturity of the deemed
principal amount of a Capital Lease Obligation shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date
upon which such lease may be terminated by the lessee without payment of a
penalty. The Stated Maturity of the deemed principal amount of any Redeemable
Stock shall be the earlier of (i) the date on which such Redeemable Stock could
be redeemed and (ii) the Stated Maturity of any debt securities into which such
Redeemable Stock is convertible or exchangeable. With respect to any guarantee,
the dates on which principal or interest is due or payable shall be deemed, for
this purpose, to be the dates on which principal or interest is due on the
Indebtedness thereby guaranteed.
"Subordinated Obligation" means any Indebtedness of the Issuer
-----------------------
(whether outstanding on the date of this Indenture or thereafter Incurred) which
is subordinate or junior in right of payment to the Securities.
"Subsidiary" means, with respect to any Person any corporation,
----------
association, partnership or other business entity a majority of whose Voting
Stock is at the time, directly or indirectly, owned or controlled by (i) such
Person, (ii) such Person and one or more Subsidiaries of such Person or (iii)
one or more Subsidiaries of such Person. Unless the context otherwise indicates,
"Subsidiary" or "Subsidiaries" refer to Subsidiaries of the Issuer.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
---
77aaa-77bbbb), as in effect on the date of this Indenture (except as otherwise
provided in Section 9.03).
"Trustee" means the party named as such above until a successor
-------
replaces it pursuant to this Indenture and thereafter means the successor.
"Trust Officer" means any officer in the Corporate Trust Office
-------------
of the Trustee or any other officer of the Trustee assigned by the Trustee to
administer this Indenture.
"U.S. Government Obligations" means direct obligations of the
---------------------------
United States of America or any agency thereof for the payment of which the full
faith and credit of the United States of America is pledged and which are
noncallable at the option of the issuer thereof.
"Voting Stock" of any Person means any class or classes of
------------
Capital Stock which entitle the holders thereof under ordinary circumstances to
elect at least a majority of the Board of Directors of such Person (irrespective
of whether or not, at the time, stock of any other class or classes shall have,
or might have, voting power by reason of the happening of any contingency).
14
"wholly-Owned Subsidiary" means any Subsidiary of the Issuer of
-----------------------
which 100% of the outstanding Capital Stock (other than directors' qualifying
shares) is owned by the Issuer and/or another wholly-owned Subsidiary of the
Issuer.
SECTION 1.02. Other Definitions.
-----------------
Term Defined in
----
Section
-----------
"Bankruptcy Law"......................................... 6.01
"Change of Control Offer"................................ 3.11(a)
"Change of Control Payment Date"......................... 3.12(b)(ii)
"Custodian".............................................. 6.01
"Discharged"............................................. 8.01
"Event of Default"....................................... 6.01
"Excess Proceeds"........................................ 3.08(a)
"Expiration Date"........................................ 3.08(b)
"Interest Payment Date".................................. Section 1 of Exh. A hereto
"Legal Holiday".......................................... 11.07
"Paying Agent"........................................... 2.03
"Prepayment offer"....................................... 3.08(a)
"Prepayment Offer Notice"................................ 3.08(b)
"Purchase Date".......................................... 3.08(b)
"Registrar".............................................. 2.03
"Repurchase Price"....................................... 3.12(a)
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 Securities;
--------------------
"indenture security holder" means a Securityholder;
-------------------------
"indenture to be qualified" means this Indenture;
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee;
-----------------
and
"obligor" on the Securities means the Issuer and any other
-------
obligor on the indenture securities.
SECTION 1.04. Rules of Construction. Unless the context
---------------------
otherwise requires: (i) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP and all accounting calculations will be
determined in accordance with such principles; and (ii) words in the singular
include the plural, and in the plural include the singular.
15
ARTICLE II
The Securities
--------------
SECTION 2.01. Form and Dating. The Securities and the Trustee's
---------------
certificate of authentication shall be substantially in the form of Exhibit A,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, which Exhibit A is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
usage or as may, consistently herewith, be determined by the Officers executing
such Securities, as evidenced by their execution of the Securities in accordance
with Section 2.02. Any portion of the text of any Security may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Security. Each Security shall be dated the date of its authentication.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods or may be produced in
any other manner permitted by the rules of any securities exchange on which such
Securities may then be listed, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities in accordance
with Section 2.02.
SECTION 2.02. Execution and Authentication. The Chief Executive
----------------------------
Officer, President or any Vice President of the Issuer shall sign the Securities
for the Issuer. The Issuer's seal shall be reproduced on the Securities and may
be in facsimile form and shall be attested by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the Issuer. The
signatures required by this paragraph may be by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds
that office at the time the Security is authenticated, the Security shall be
valid nevertheless.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose until authenticated by the manual
signature of a duly authorized signatory of the Trustee. This signature shall be
conclusive evidence, and the only evidence, that the Security has been
authenticated under this Indenture and is entitled to the benefits hereunder.
The Trustee shall authenticate and deliver Securities for
original issue, in the aggregate principal amount of not more than $120,000,000,
pursuant to a written order of the Issuer signed by an Officer of the Issuer.
The order shall specify the amount of Securities to be authenticated and the
date upon which the original issue of Securities is to be authenticated. The
aggregate principal amount of Securities which may be outstanding at any time
pursuant to this Indenture may not exceed $120,000,000, except as provided in
Section 2.07.
With the approval of the Issuer, the Trustee may appoint an
authenticating agent to authenticate Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Issuer.
16
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and integral multiples thereof.
SECTION 2.03. Registrar and Paying Agent. The Issuer shall
--------------------------
maintain in the Borough of Manhattan, New York, New York, an office or agency
where Securities shall be registered and may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"), and the Issuer
shall maintain in the Borough of Manhattan, New York, New York, an office or
agency where notices or demands to or upon the Issuer in respect of the
Securities and this Indenture may be served. The Registrar shall keep a register
for the Securities and of their transfer and exchange. The Issuer may appoint
one or more co-registrars and one or more additional paying agents, which may be
located either within or outside the Borough of Manhattan, New York, New York.
The term "Paying Agent" includes any additional paying agent and the term
"Registrar" includes any additional registrar. The Issuer may change any Paying
Agent or Registrar without prior notice to any Securityholder.
The Issuer shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
applicable terms of the TIA. The agreement shall implement the provisions of
this Indenture that relate to such Agent. The Issuer shall give prompt written
notice to the Trustee of the name and address of any Agent who is not a party to
this Indenture. If the Issuer fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Issuer or any
Affiliate of the Issuer may act as Paying Agent or Registrar.
The Issuer initially appoints the Trustee at the address
specified in Section 11.02 as Registrar and Paying Agent, and as agent for
service of notices and demands.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to the
-----------------------------------
Stated Maturity of principal of, premium (if any) and interest on any Security,
the Issuer shall deposit with the Paying Agent money sufficient to pay such
principal, premium (if any) and interest so becoming due. The Issuer shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal of,
premium (if any) and interest on the Securities (whether such money has been
paid to it by the Issuer or any other obligor on the Securities) and shall
notify the Trustee of any failure by the Issuer (or any other obligor on the
Securities) in making any such payment. While any such failure continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed. The Issuer 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 Issuer) shall have no further
liability for the money so paid over to the Trustee. If the Issuer acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Securityholders all money held by it as Paying Agent.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in
--------------------
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Registrar shall furnish to the Trustee or the Paying Agent on or
before each interest payment date for the Securities and at such other
17
times as the Trustee may reasonably request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of Securityholders.
SECTION 2.06. Registration of Transfer and Exchange. When
-------------------------------------
Securities are presented to the Registrar with a request to register their
transfer or to exchange them for an equal principal amount of Securities of
other authorized denominations, the Registrar shall register the transfer or
make the exchange if its requirements for such transaction are met; provided
that a Security surrendered for registration of transfer or exchange shall be
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Registrar duly executed by, the Holder thereof or his
attorney duly authorized in writing. To permit registrations of transfer and
exchange, the Issuer shall issue Securities and the Trustee shall authenticate
Securities at the Registrar's request. No service charge shall be made for any
registration of transfer or exchange, but the Issuer may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with registration of transfer or exchange of Securities other than
exchanges pursuant to Section 2.10, 3.08(d), 3.12(e), 4.06 or 9.05 not involving
any transfer. The Issuer shall not be required to make and the Registrar need
not register transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portions thereof
not to be redeemed) or any Securities for a period of 15 days before a selection
of Securities to be redeemed.
SECTION 2.07. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Trustee or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Issuer shall issue
and the Trustee, at the Issuer's written order signed by an Officer, shall,
subject to requirements of law, authenticate a replacement Security if the
requirements of the Trustee and the Issuer are met. The Trustee or the Issuer
may require the Holder to provide an indemnity bond sufficient in the judgment
of each of the Trustee and the Issuer to protect the Issuer, the Trustee, any
Agent or any authenticating agent from any loss which any of them may suffer if
a Security is replaced. The Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation to
the issuance of any new Security under this Section and any other expense
(including the fees and expenses of the Trustee) in connection therewith. In
case any such lost, destroyed or wrongfully taken Security has become or within
15 days is to become due and payable, the Issuer in its discretion may, instead
of issuing a replacement Security, pay such Security. The provisions of this
Section are exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement or payment of lost, destroyed or
wrongfully taken Securities.
Every replacement Security is an additional obligation of the
Issuer and shall be entitled to the benefits of this Indenture.
SECTION 2.08. Outstanding Securities. The Securities outstanding
----------------------
at any time are all the Securities duly authenticated by the Trustee except for
those cancelled by it, those delivered to it for cancellation and those
described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to
be outstanding and interest ceases to accrue unless the Trustee receives proof
satisfactory to it that the replaced Security is held by a bona fide purchaser.
18
If all principal of, premium (if any) and interest on any of the
Securities is considered paid under Section 3.01, such Securities shall cease to
be outstanding and interest on them shall cease to accrue.
Except as provided in Section 2.09, a Security does not cease to
be outstanding because the Issuer or an Affiliate of the Issuer holds such
Security.
SECTION 2.09. Treasury Securities. In determining whether the
-------------------
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Issuer or any other
obligor, or by an Affiliate of the Issuer or such other obligor, shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded.
SECTION 2.10. Temporary Securities. Until definitive Securities
--------------------
are ready for delivery, the Issuer may prepare and execute and the Trustee, at
the Issuer's written order signed by an officer, shall authenticate temporary
Securities, substantially in the form of definitive Securities, with such
variations that the Issuer considers appropriate for temporary Securities, as
conclusively evidenced by the execution of such temporary Securities by Officers
of the Issuer in accordance with Section 2.02.
If temporary Securities are issued, the Issuer will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for such definitive Securities upon surrender of such temporary
Securities at the Corporate Trust Office, without charge to the Holder. Upon
surrender for exchange of any one or more temporary Securities, the Issuer shall
execute and the Trustee, at the Issuer's written order signed by an Officer,
shall authenticate and deliver in exchange therefor a like aggregate principal
amount of definitive Securities having the same date as such temporary
Securities. Until so exchanged, temporary securities shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities.
SECTION 2.11. Cancellation. The Issuer at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange, payment or repurchase. The Trustee shall promptly cancel all
Securities surrendered for registration of transfer, exchange, payment,
repurchase, replacement or cancellation and shall destroy canceled Securities
unless the Issuer directs them to be returned to it by written order signed by
an Officer. The Trustee shall from time to time as requested by the Issuer, but
not less frequently than annually, provide the Issuer with a certificate of
destruction. The Issuer may not issue new Securities to replace Securities that
it has paid or that have been delivered to the Trustee for cancellation, except
as otherwise provided herein.
SECTION 2.12. Defaulted Interest. If and to the extent the Issuer
------------------
fails to make or duly provide for a payment of interest on the Securities, it
shall pay such interest, plus interest payable on the defaulted interest (to the
extent permitted by law) at the rate borne by the Securities, to the Persons who
are Securityholders at the close of business on a special record date (the
"Special Record Date"), which the Issuer shall establish for such payment,
notice of
19
which shall be delivered by the Trustee to each Holder of a Security, not less
than 10 days prior to the Special Record Date.
SECTION 2.13. Persons Deemed Owners. Prior to due presentment for
---------------------
registration of transfer, the Issuer, the Trustee, the authenticating agent, if
any, and any Agent may treat the Holder of a Security as the owner of such
Security for the purpose of receiving payment of principal of, premium (if any)
and, subject to Section 2.12, interest on, such Security and for all other
purposes whatsoever whether or not such Security is overdue, and none of the
Issuer, the Trustee, the authenticating agent, if any, or any Agent shall be
affected by notice to the contrary.
SECTION 2.14. Computation of Interest. Interest on the Securities
-----------------------
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 2.15. Predecessor Securities. All Securities issued upon
----------------------
any registration of transfer or exchange of Securities or in replacement of a
lost, destroyed or stolen Security pursuant to Section 2.07 shall evidence the
same debt, and be entitled to the same benefits under this Indenture, as the
predecessor Security or Securities surrendered upon such registration of
transfer or exchange or lost, destroyed or stolen, as the case may be.
ARTICLE III
Covenants
SECTION 3.01. Payment of Securities. The Issuer shall pay the
---------------------
principal of, premium (if any) and interest on, the Securities on the dates and
in the manner provided in the Securities and in this Indenture. Principal,
premium (if any) and interest shall be considered paid on the date due if the
Trustee or Paying Agent (other than the Issuer or an Affiliate of the Issuer)
holds on that date money designated for and sufficient to pay all principal,
premium (if any) and interest then due.
SECTION 3.02. Limitation on Indebtedness. The Issuer shall not,
--------------------------
directly or indirectly, Incur any Indebtedness and the Issuer shall not permit
any Subsidiary, directly or indirectly, to Incur any Indebtedness or Preferred
Stock, other than Permitted Indebtedness, except that, the Company may Incur
Indebtedness if (a) after giving pro forma effect to the Incurrence of such
Indebtedness and the receipt and application of the proceeds thereof, the
Consolidated Fixed Charge Coverage Ratio exceeds 2.25 to 1 or (b) such
Indebtedness or Preferred Stock is Permitted Indebtedness.
For purposes of determining compliance with this Section 3.02, in
the event that an item of Indebtedness is described in more than one clause of
the definition of Permitted Indebtedness, the Issuer, in its sole discretion,
shall classify such item of Indebtedness and only be required to include the
amount and type of such of Indebtedness in one of such clauses.
SECTION 3.03. Limitation on Guarantees by Subsidiaries of
-------------------------------------------
Issuer's Indebtedness. The Issuer shall not permit any of its Subsidiaries to
---------------------
Incur or permit to exist any guarantee of any Indebtedness of the Issuer unless
such Subsidiary contemporaneously guarantees the Securities on a senior
subordinated basis. Notwithstanding the foregoing, any
20
guarantee by a Subsidiary of the Securities pursuant to this Section 3.03 shall
provide by its terms that it shall be automatically and unconditionally released
and discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Issuer, of all of the Issuer's Capital Stock in, or all or
substantially all of the assets of, such Subsidiary (which sale, exchange or
transfer is not prohibited by this Indenture) or (ii) the release or discharge
of the guarantee that resulted in the creation of the guarantee required by this
Section, except a discharge or release by or as a result of payment under such
guarantee. The requirements of this Section 3.03 shall not apply to any
Subsidiary that has issued a guarantee unless and until (i) as of the end of the
most recently completed fiscal quarter for which financial statements of the
Issuer have been published, the total consolidated assets of such Subsidiary
exceeded 5% of the Issuer's consolidated total assets or (ii) for the most
recently completed four fiscal quarters for which financial statements have been
published (including as part of annual financial statements), consolidated net
sales of such Subsidiary exceeded 5% of the Issuer's consolidated net sales, in
each case determined in accordance with GAAP on a basis consistent with past
practices. All calculations made pursuant to the immediately preceding sentence
shall give pro forma effect to (x) any Asset Sale or (y) any acquisition of
material assets out of the ordinary course of business that has occurred during
such four fiscal quarter period or is probable as if such Asset Sale or
acquisition had occurred (A) as of the end of such period in the case of clause
(i) of the immediately preceding sentence or (B) as of the beginning of such
four fiscal quarter period in the case of clause (ii) of the immediately
preceding sentence.
SECTION 3.04. Limitation on Liens. The Issuer shall not, and shall not
-------------------
permit any of its Subsidiaries to, directly or indirectly, Incur any Lien on or
with respect to any Property of the Issuer or such Subsidiary, or any interest
therein or any income or profits therefrom, unless the Securities are secured
equally and ratably with (or, in the case of Liens securing Subordinated
Obligations, prior to) any and all other Indebtedness secured by such Lien,
except for: (i) any Lien existing on any Property of a Person at the time such
Person is merged or consolidated with or into the Issuer or any Subsidiary or
becomes a Subsidiary (and not Incurred concurrently with or in anticipation of
such transaction), provided that such Liens are not extended to other Property
of the Issuer and its other Subsidiaries; (ii) any Lien existing on any Property
at the time of the acquisition thereof (and not Incurred concurrently with or in
anticipation of such transaction); (iii) any Lien Incurred to secure the
performance of statutory obligations, performance bonds or other obligations of
a like nature Incurred in the ordinary course of business; (iv) any Lien to
secure a Capital Lease Obligation or Capital Expenditure Indebtedness permitted
by clause (x) of the definition of Permitted Indebtedness; (v) Liens for taxes
not yet due or which are being contested in good faith by appropriate
proceedings, so long as reserves have been established to the extent required by
GAAP; (vi) Liens existing as of the date of this Indenture; (vii) Liens on
Property of the Issuer to secure Senior Indebtedness; and (viii) Liens to secure
any permitted extension, renewal, refinancing, refunding or exchange, in whole
or in part, of or for any Indebtedness secured by Liens referred to in the
foregoing clauses (i) through (vii) (except with respect to Senior Indebtedness
referred to in clause (vii) which, after any such extension, renewal,
refinancing, refunding or exchange, is subordinate in right of payment to any
other Indebtedness of the Issuer), provided that such Liens do not extend to any
other Property and that the principal amount of the Indebtedness secured by such
Liens is not increased.
21
SECTION 3.05. Limitation on Sale and Leaseback Transactions. The
---------------------------------------------
Issuer shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale and Leaseback Transaction, unless the net proceeds from such
transaction are at least equal to the Fair Market Value of the Property being
transferred and, at the Issuer's option, (i) the obligations of the Issuer or
such Subsidiary with respect thereto are included as Indebtedness under Section
3.02 and would be permitted thereunder and the Issuer or such Subsidiary would
be permitted to Incur a Lien to secure such Indebtedness under Section 3.04
without equally and ratably securing the Securities or (ii) the Issuer treats
such transaction as an Asset Sale and complies with the provisions of Section
3.08 with respect thereto.
SECTION 3.06. Limitation on Restricted Payments. (a) The Issuer shall
---------------------------------
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
make any Restricted Payment if, at the time of and after giving-effect to the
proposed Restricted Payment: (i) any Default or Event of Default has occurred
and is continuing; or (ii) the Issuer could not Incur at least $1.00 of
additional Indebtedness pursuant to Section 3.02 (other than as Permitted
Indebtedness); or (iii) the aggregate amount expended or declared for all
Restricted Payments from the date of this Indenture exceeds the sum of (A) the
aggregate net proceeds (including the Fair Market Value of Property other than
cash) from sales of Capital Stock of the Issuer (other than to a Subsidiary of
the Issuer) and cash capital contributions to the Issuer from its stockholders,
plus (B) 50% of the aggregate cumulative Consolidated Net Income of the Issuer
(or, if Consolidated Net Income shall be a deficit, minus 100% of such deficit)
beginning on the first day of the fiscal quarter beginning immediately after the
date of this Indenture and ending on the last day of the fiscal quarter
immediately preceding the date of such Restricted Payment, plus (C) $1 million.
(b) The foregoing shall not prohibit any of the following (and none
of the following shall be included in calculating the amount of Restricted
Payments made or available to be made pursuant to Section 3.06(a)(iii)):
(i) any purchase or redemption of Capital Stock or Subordinated
Obligations out of the proceeds from the substantially concurrent sale of
Capital Stock;
(ii) any purchase or redemption of Subordinated Obligations out of
the proceeds from the substantially concurrent sale of Subordinated
Obligations; and
(iii) dividends paid by the Issuer on or within one Business Day
following the Issue Date out of proceeds of the offering of the Securities.
(c) So long as no Default or Event of Default shall have occurred
and be continuing (or would result therefrom), the foregoing shall not prohibit
any of the following (but the following shall be included in calculating the
amount of Restricted Payments made and available to be made pursuant to Section
3.06(a)(iii)):
(iv) dividends paid by the Issuer within 60 days after declaration if
they were permitted at the time of declaration;
(v) dividends paid by the Issuer to the Parent to be used by the
Parent to pay any tax liability of the Parent or the Issuer;
22
(vi) dividends paid by the Issuer to the Parent, in an aggregate
amount not to exceed $500,000 in any 12 month period, to be used by the
Parent to repurchase Capital Stock of the Parent from employees and
management of the Parent or the Issuer, at the Fair Market Value thereof,
upon any such individual's death, disability or termination of employment;
and
(vii) Restricted Payments not otherwise permitted to be made by
Section 3.06(a), made on or after the third anniversary of the Issue Date,
in an aggregate amount not to exceed $7 million.
SECTION 3.07. Limitation on Issuance and Sale of Capital Stock of
---------------------------------------------------
Subsidiaries. The Issuer shall not (i) permit any wholly-owned Subsidiary to
------------
issue any Capital Stock other than to the Issuer or one of its wholly-owned
Subsidiaries or (ii) permit any Person other than the Issuer or a wholly-owned
Subsidiary to own any Capital Stock of a wholly-owned Subsidiary (other than
directors' qualifying shares), except for (a) a sale of 100% of the Capital
Stock of a wholly-owned Subsidiary effected in accordance with the provisions of
Section 3.08, and (b) an issuance of Preferred Stock permitted under the
provisions of Section 3.02.
SECTION 3.08. Limitation on Specified Asset Sales. (a) The Issuer
-----------------------------------
shall not, and shall not permit any Subsidiary to, consummate any Specified
Asset Sale-unless: (i) the Issuer or such Subsidiary, as the case may be,
receives consideration at the time of such Specified Asset Sale at least equal
to the Fair Market Value of the Property disposed of and (ii) at least 75% of
the consideration received by the Issuer or such Subsidiary for such Property is
in the form of cash or cash equivalents. The Issuer or such Subsidiary may,
within 360 days of such Specified Asset Sale, at its option, (1) reinvest an
amount equal to the Net Cash Proceeds (or any portion thereof) from such
disposition in Additional Assets so long as the Issuer has notified the Trustee
in writing within 330 days of such Asset Sale that it has determined to apply
Net Cash Proceeds from such Asset Sale to an investment in such Additional
Assets and/or (2) offer to apply an amount equal to such Net Cash Proceeds (or
remaining Net Cash Proceeds) to the repayment of any Senior Indebtedness of the
Issuer or Indebtedness of Subsidiaries, and repay such Indebtedness of any
lender or debtholder who accepts such offer. Any Net Cash Proceeds from any
Specified Asset Sale that are not used in accordance with (1) or (2) above shall
constitute "Excess Proceeds". When the aggregate amount of Excess Proceeds
exceeds the greater of $10 million and 15% of Consolidated Net Tangible Assets,
the Issuer shall make an offer in accordance with the provisions of paragraphs
(b), (c) and (d) of this Section 3.08 (the "Prepayment Offer") to purchase on a
pro rata basis according to the principal amount of the Securities validly
tendered by each Securityholder and not properly withdrawn, from all holders of
the Securities, an aggregate principal amount of Securities equal to the Excess
Proceeds, at a price in cash at least equal to 100% of the outstanding principal
amount thereof plus accrued interest, if any, to the Purchase Date (as defined
in paragraph (b) below). To the extent that any portion of the amount of Net
Cash Proceeds remains after compliance with the preceding sentence and provided
that all Holders have been given the opportunity to tender their Securities for
repurchase as provided in accordance with this Indenture, the Issuer or such
Subsidiary may use such remaining amount for general corporate purposes and the
amount of Excess Proceeds shall be reset to zero.
23
(b) Within five Business Days after 360 days from the date of a
Specified Asset Sale, the Issuer shall, if it chooses (or is obligated pursuant
to paragraph (a) above) to apply an amount equal to any remaining Net Cash
Proceeds (or any portion thereof) to fund an offer to repurchase the Securities,
send written notice (a "Prepayment Offer Notice") to the Holders of the
Securities offering to purchase from such Holders the maximum principal amount
(expressed as a multiple of $1,000) of Securities that may be purchased with the
aggregate Excess Proceeds at a price, payable in cash, equal to at least 100% of
the principal amount of the Securities plus accrued and unpaid interest, if any,
to the Purchase Date. The Prepayment Offer Notice will contain all instructions
and materials necessary to enable such Holder to tender pursuant to the
Prepayment Offer. The Prepayment Offer Notice will also state (i) that the
Issuer is offering to purchase Securities pursuant to the provisions of this
Section 3.08, (ii) that, to the extent Securities in an aggregate amount in
excess of the Excess Proceeds are validly tendered and not properly withdrawn,
the Issuer will repurchase Securities on a pro rata basis according to the
principal amount of the Securities validly tendered by each Securityholder and
not properly withdrawn, (iii) that any Security (or any portion thereof)
accepted for payment (and duly paid on the Purchase Date (as defined below))
pursuant to the Prepayment Offer will cease to accrue interest after the
Purchase Date, (iv) the expiration date (the "Expiration Date") of the
Prepayment Offer, which will be, subject to any contrary requirements of
applicable law, not less than 30 days nor more than 60 days after the date of
such Prepayment Offer, (v) a settlement date (the "Purchase Date") for the
purchase of Securities within five Business Days after the Expiration Date, (vi)
the maximum aggregate principal amount of Securities to be purchased and the
purchase price thereof and (vii) a description of the procedures which a Holder
must follow to tender all or any portion of such Holder's Securities. At the
Issuer's written order signed by an Officer, the Trustee shall give the
Prepayment Offer Notice required by this paragraph (b) in the Issuer's name and
at the Issuer's expense. In such event, the Issuer shall provide the Trustee
with the information required by this paragraph (b).
To tender any Security, a Holder must surrender such Security, with
the form entitled "Election of Holder to Require Repurchase" on the reverse of
the Security completed, at the place or places specified in the Prepayment Offer
Notice prior to the close of business on the Expiration Date. Any Holder will be
entitled to withdraw all or any portion of the Securities tendered by such
Holder if the Paying Agent receives, not later than the close of business on the
Expiration Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Securities the Holder
tendered, the certificate numbers of the Securities tendered and a statement
that such Holder is withdrawing all or a portion of such tender. Any portion of
Securities so tendered or withdrawn must be tendered or withdrawn in an integral
multiple of $1,000 principal amount.
On the Purchase Date, the Issuer shall (i) accept for payment any
Security (or a portion thereof) tendered pursuant to the Prepayment offer and
not validly withdrawn, (ii) deposit with the Paying Agent money sufficient to
pay the purchase price thereof and (iii) deliver to the Trustee each Security so
accepted together with an Officers' Certificate that states the aggregate
principal amount of Securities tendered to the Issuer. The Paying Agent shall
promptly mail to each Holder of Securities so accepted payment in an amount
equal to the purchase price thereof.
24
(c) Notwithstanding the foregoing, if any Security (or any portion
thereof) accepted for payment shall not be so paid pursuant to the provisions of
Section 3.08(b), then, from the Purchase Date until the principal of, premium
(if any) and interest on such Security is paid, interest shall be paid on the
unpaid principal and premium (if any) and, to the extent permitted by law, on
any accrued but unpaid interest thereon, in each case, at the rate prescribed
therefor by such Security.
(d) Upon surrender of any Security tendered or accepted in part, the
Issuer shall execute, and the Trustee shall authenticate and deliver, a new
Security, of any authorized denomination, in an aggregate principal amount equal
to the unpaid portion of the surrendered Security.
SECTION 3.09. Transactions with Affiliates. The Issuer shall not, and
----------------------------
shall not permit any of its Subsidiaries to, directly or indirectly, enter into
any transaction or series of related transactions (including, but not limited
to, the sale, transfer, disposition, purchase, exchange or lease of assets or
Property, the making of any Investment, the giving of any guarantee or the
rendering of any service) with or for the benefit of any Affiliate of the
Issuer, unless (i) such transaction or series of related transactions is in the
best interest of the Issuer or such Subsidiary, (ii) such transaction or series
of related transactions is on terms no less favorable to the Issuer or such
Subsidiary than those that could be obtained in a comparable arm's-length
transaction with a Person that is not an Affiliate of the Issuer and (iii) (A)
with respect to a transaction or series of related transactions involving
aggregate payments or Fair Market Value in excess of $1 million, the Issuer
delivers an Officers' Certificate to the Trustee to the effect that such
transaction or series of related transactions complies with clauses (i) and (ii)
of this paragraph, (B) with respect to a transaction or series of related
transactions involving aggregate payments or Fair Market Value in excess of $5
million the Board of Directors, including a majority of the disinterested
members of the Board of Directors, of the Issuer approves such transaction or
series of related transactions and, in its good faith judgment, believes that
such transaction or series of related transactions complies with clauses (i) and
(ii) above, as evidenced by a Board Resolution and (C) with respect to a
transaction or series of related transactions involving aggregate payments or
Fair Market Value in excess of $10 million or, with respect to a transaction or
series of related transactions involving aggregate payments or Fair Market Value
in excess of $5 million as to which no member of the Board of Directors of the
Issuer is disinterested, the Issuer shall receive the written opinion of a
nationally recognized firm of investment bankers, accountants, industry
consultants or other appropriately qualified experts that such transaction (or
series of related transactions) is fair to the Issuer or such Subsidiary.
Notwithstanding the foregoing, the purchase by the Issuer or any Subsidiary of
insurance from an Affiliate of the Issuer, in the ordinary course of business of
the Issuer or such Subsidiary, need only comply with clauses (i) and (ii) above.
For purposes of this Section 3.09, the Issuer and its wholly-owned Subsidiaries
shall be deemed not to be Affiliates.
SECTION 3.10. Limitation on Dividend Restrictions Affecting
---------------------------------------------
Subsidiaries. The Issuer shall not, and shall not permit any of its Subsidiaries
------------
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction on the ability of any
Subsidiary to (i) pay dividends or make any other distribution on its Capital
Stock, (ii) pay any Indebtedness owed to the Issuer or a Subsidiary, (iii) make
any Investment in the Issuer or a Subsidiary or (iv) transfer any Property to
the Issuer or any Subsidiary, except (a)
25
any encumbrance or restriction pursuant to an agreement in effect on the date of
this Indenture; (b) any encumbrance or restriction with respect to a Subsidiary
that is not a Subsidiary of the Issuer on the date of this Indenture in
existence at the time such Person becomes a Subsidiary of the Issuer and not
Incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary; (c) restrictions contained in security agreements or leases securing
Indebtedness or rental payments of a Subsidiary to the extent such restrictions
restrict the transfer of the specific Property under lease or being financed and
only if the Incurrence of such Indebtedness and such Lien were permitted by the
terms of this Indenture; (d) any encumbrance or restriction existing under any
agreement that extends, renews refinances or replaces the agreements containing
the restrictions in the foregoing clauses, provided that the terms and
conditions of any such restriction are not materially less favorable to the
Securityholders than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced; and (e) any
restriction with respect to the transfer of all or substantially all the Capital
Stock of a Subsidiary or any of the assets of a Subsidiary imposed pursuant to
an agreement entered into for the sale or disposition of such Capital Stock or
such assets pending the closing of such sale or disposition.
SECTION 3.11. Limitation on Certain Subordinated Indebtedness. The
-----------------------------------------------
Issuer shall not Incur any Indebtedness that is expressly by its terms (i)
subordinate or junior in right of payment to any of its Indebtedness and (ii)
senior in right of payment to the Securities.
SECTION 3.12. Repurchase of Securities at Option of the Holder upon
-----------------------------------------------------
Change of Control. (a) Upon the occurrence of a Change of Control, each Holder
-----------------
shall have the right to require the Issuer to repurchase such Holder's
Securities, in whole or in part, in integral multiples of $1,000, pursuant to
the offer described in paragraph (b) below (the "Change of Control Offer") at a
purchase price (the "Repurchase Price") in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the Change of Control Payment Date (as defined below).
(b) Within 30 calendar days following any Change of Control, the
Issuer shall mail a notice to each Holder and to the Trustee stating:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made pursuant to this Section 3.12, and that all Securities
that are timely tendered will be accepted for payment;
(ii) the Repurchase Price and the repurchase date, which shall be a
date occurring no earlier than 30 days and no later than 60 days subsequent
to the date on which such notice is mailed (the "Change of Control Payment
Date");
(iii) that any Security (or any portion thereof) not tendered will
continue to accrue interest;
(iv) that any Security (or any portion thereof) accepted for payment
pursuant to the Change of Control Offer (and duly paid on the Change of
Control Payment Date) will cease to accrue interest after the Change of
Control Payment Date;
26
(v) that any Holder electing to have a Security (or any portion
thereof) repurchased pursuant to a Change of Control Offer will be required
to surrender the Security, with the form entitled "Election of Holder to
Require Repurchase" on the reverse of the Security completed, to the Paying
Agent at the address specified in the notice on or prior to the close of
business on the fifth Business Day prior to the Change of Control Payment
Date;
(vi) that any Holder will be entitled to withdraw all or a portion
(in a principal amount in an integral multiple of $1,000) of the Securities
delivered for repurchase if the Paying Agent receives, not later than the
close of business on the third 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 Securities the Holder
delivered for repurchase, the certificate numbers of such Securities and a
statement that such Holder is withdrawing all or a portion of the
Securities delivered for repurchase; and
(vii) that any Holder that elects to have a portion of its Securities
repurchased must specify the principal amount that is being tendered for
repurchase, which principal amount must be in an integral multiple of
$1,000.
At the Issuer's written order signed by an Officer, the Trustee shall
give the notice required in this clause (b) in the Issuer's name and at the
Issuer's expense. In such event, the Issuer shall provide the Trustee with the
information required by clauses (i) - (vii) above.
(c) On the Change of Control Payment Date, the Issuer shall (i)
accept for payment any Security (or portion thereof) tendered pursuant to the
Change of Control Offer and not validly withdrawn, (ii) deposit with the Paying
Agent money sufficient to pay the Repurchase Pride of any Security so tendered
and (iii) deliver to the Trustee each Security so accepted together with an
Officers' Certificate that states the aggregate principal amount of Securities
tendered to the Issuer. The Paying Agent shall promptly mail to each Holder of
Securities so accepted payment in an amount equal to the Repurchase Price
therefor. The Trustee shall notify the Holders of the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date. For purposes of this Section 3.12, the Trustee shall act as the Paying
Agent.
(d) Notwithstanding the foregoing, if any Security (or any portion
thereof) accepted for payment shall not be so paid pursuant to the provisions of
this Section 3.12, then, from the Change of Control Payment Date until the
principal of (and premium) and interest on such Note is paid, interest shall be
paid on the unpaid principal (and premium) and, to the extent permitted by law,
on any accrued but unpaid interest thereon, in each case at the rate prescribed
therefor by such Security.
(e) Upon surrender of any Security tendered in part, the Issuer shall
execute, and the Trustee shall authenticate and deliver, a new Security, of any
authorized denomination, in an aggregate principal amount equal to the
untendered portion of the surrendered Security.
27
SECTION 3.13. Covenant to Comply with Securities Laws upon Purchase
-----------------------------------------------------
of Securities. In connection with any purchase of Securities under Section 3.08
-------------
or Section 3.12 by the Issuer, the Issuer shall, to the extent then applicable,
comply with all applicable tender offer rules, including Rule 14e-1 (which term,
as used herein, includes any successor provisions thereto) under the Exchange
Act.
SECTION 3.14. Corporate Existence. Subject to Article V, the Issuer
-------------------
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate existence of each of
its Subsidiaries, and each of their respective corporate rights (charter-and
statutory), licenses and franchises; provided, however, that the Issuer shall
-------- -------
not be required to preserve any such existence (except of itself) or any such
corporate right, license or franchise, if its Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of its
business and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 3.15. SEC Reports. The Issuer shall file with the SEC the
-----------
annual reports, quarterly reports and the information, documents and other
reports required to be filed with the SEC pursuant to Sections 13 and 15(d) of
the Exchange Act and the rules and regulations promulgated thereunder, whether
or not the Issuer has a class of securities registered under the Exchange Act.
The Issuer shall make available without cost to each Holder and shall file with
the Trustee within 15 days after the Issuer files them with the SEC, copies of
the annual reports, quarterly reports and of the information, documents, and
other reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe), if any, which the Issuer is required to
file with the SEC either pursuant to Section 13 or 15(d) of the Exchange Act and
the rules and regulations promulgated thereunder or pursuant to the preceding
sentence. The Issuer also shall comply with the other provisions of TIA
(S) 314(a).
SECTION 3.16. Compliance Certificates. The Issuer shall deliver to
-----------------------
the Trustee, within 120 days after the end of each fiscal year of the Issuer, an
Officers' Certificate (one signatory to which shall be its principal executive
officer, principal financial officer or principal accounting officer) stating
that a review of the activities of the Issuer 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 Issuer has complied with all its
covenants and conditions under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of such Officer's
knowledge, the Issuer has complied with each applicable covenant and condition
contained in this Indenture and no Default or Event of Default exists (or, if a
Default or Event of Default shall have occurred, describing all such Defaults or
Events of Default of which he may have knowledge and the nature and status
thereof).
SECTION 3.17. Notice of Defaults. Upon the occurrence of any Default
------------------
or Event of Default under this Indenture, the Issuer promptly after it becomes
aware thereof shall deliver to the Trustee an Officers' Certificate specifying
such Default or Event of Default and what action the Issuer is taking or
proposes to take with respect thereto.
SECTION 3.18. Payment of Taxes and Other Claims. The Issuer shall pay
---------------------------------
or discharge or cause to be paid or discharged, before any penalty accrues from
the failure to so pay or discharge, (a) all taxes, assessments and governmental
charges levied or imposed upon the
28
Issuer or any of its Subsidiaries or upon the income, profits or property of the
Issuer or any of its Subsidiaries, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a Lien upon the
property of the Issuer or any Subsidiary; provided, however, that the Issuer
-------- -------
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim the amount, applicability or validity of
which is being contested in good faith by appropriate proceedings and for which
adequate provision has been made to the extent required by GAAP or where the
failure to effect such payment or discharge is not adverse in any material
respect to the Holders.
SECTION 3.19. Maintenance of Properties; Insurance; Books and
-----------------------------------------------
Records; Compliance with Law. (a) The Issuer shall, and shall cause each of its
----------------------------
Subsidiaries to, cause all properties and assets to be maintained and kept in
good condition, repair and working order (reasonable wear and tear excepted) and
supplied with all necessary equipment, and shall cause to be made all necessary
repairs, renewals, replacements, additions, betterments and improvements
thereto, as shall be reasonably necessary for the proper conduct of its
business; provided, however, that nothing in this Section 3.19(a) shall prevent
-------- -------
the Issuer or any of its Subsidiaries from discontinuing the operation and
maintenance of any of its properties if such discontinuance is (x) in the sole
discretion of the Issuer or such Subsidiary, desirable in the conduct of its
business and (y) if such discontinuance is not materially adverse to either the
Issuer and its Subsidiaries taken as a whole or the ability of the Issuer to
otherwise satisfy its obligations hereunder or under the Securities.
(b) The Issuer shall, and shall cause each of its Subsidiaries to,
maintain such insurance as may be required by law and such other insurance to
such extent and against such hazards and liabilities as is consistent with
industry practices (which may include self-insurance in the same form as is
consistent with industry practices).
(c) The Issuer shall, and shall cause each of its Subsidiaries to,
keep proper books of record and account, in which full and correct entries shall
be made of all business and financial transactions of the Issuer and each
Subsidiary and reflect on its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP consistently applied to
the Issuer and its Subsidiaries taken as a whole.
SECTION 3.20. Waiver of Stay, Extension or Usury Laws. The Issuer
---------------------------------------
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim, and shall resist
any and all efforts to be compelled to take the benefit or advantage of, any
stay or extension law or any usury law or other law which would prohibit or
forgive the Issuer from paying all or any portion of the principal of, premium
(if any) or interest on the Securities as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Issuer hereby expressly waives all benefit or advantage of any such law and
covenants that it shall not 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 had been enacted.
29
ARTICLE IV
Redemption
----------
SECTION 4.01. Notice to Trustee. If the Issuer elects to redeem
-----------------
Securities pursuant to paragraph 5(a) or (b) of the Securities it shall notify
the Trustee in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.
The Issuer shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate to the effect that such redemption will comply with the conditions
herein. If fewer than all the Securities are to be redeemed, the record date
relating to such redemption for determining the Holders to whom notice of
redemption will be sent pursuant to Section 4.03 shall be selected by the Issuer
and given to the Trustee, which record date shall be not less than 15 days after
the date of notice to the Trustee.
SECTION 4.02. Selection of Securities to be Redeemed. If fewer than
--------------------------------------
all the Securities are to be redeemed, the Trustee in its discretion shall
select the Securities to be redeemed pro rata or by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in similar circumstances.
The Trustee shall make the selection from outstanding Securities not previously
called for redemption. The Trustee may select for redemption portions of the
principal of Securities that have denominations larger than $1,000. Securities
and portions thereof the Trustee selects shall be in amounts of $1,000 or a
whole multiple of $1,000; except that if all the Notes of a Holder are to be
redeemed, the entire outstanding amount of Notes held by such Holder, even if
not d multiple of $1,000, shall be redeemed. Provisions of this Indenture that
apply to Securities called for redemption also apply to portions of Securities
called for redemption. The Trustee shall notify the Issuer promptly in writing
of the Securities or portions of Securities to be redeemed.
SECTION 4.03. Notice of Redemption. At least 30 days but not more
--------------------
than 60 days before a date for redemption of Securities, the Issuer shall mail a
notice of redemption to each Holder of Securities to be redeemed.
The notice shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
30
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Issuer defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Issuer's written order signed by an Officer, the Trustee shall
give the notice of redemption in the Issuer's name and at the Issuer's expense.
In such event, the Issuer shall provide the Trustee with the information
required by this Section.
SECTION 4.04. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date.
Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION 4.05. Deposit of Redemption Price. On or prior to the
---------------------------
redemption date, the Issuer shall deposit with the Paying Agent (or, if the
Issuer or an Affiliate of the Issuer is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which have been delivered by the
Issuer to the Trustee for cancellation. If the Issuer complies with this Section
4.05, then, unless the Issuer defaults in the payment of such redemption price,
interest on the Securities to be redeemed will cease to accrue on and after the
applicable redemption date, whether or not such Securities are presented for
payment. If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium (if any) shall,
until paid, bear interest from the redemption date at the rate provided in the
Securities.
SECTION 4.06. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Issuer shall execute and the Trustee
shall authenticate for the Holder (at the Issuer's expense) a new Security equal
in principal amount to the unredeemed portion of the Security surrendered.
31
ARTICLE V
Merger, Consolidation and Sale of Assets
----------------------------------------
SECTION 5.01. When Issuer May Merge, etc. The Issuer shall not merge
--------------------------
or consolidate with any other entity or sell, transfer, assign, lease, convey or
otherwise dispose of all or substantially all of its Property to any Person or
Persons, and the Issuer shall not permit any of its Subsidiaries to enter into
any such transaction or series of related transactions if such transaction or
series of related transactions, in the aggregate, would result in a sale,
transfer, assignment, lease, conveyance or other disposition of all or
substantially all of the Property of the Issuer to any Person or Persons, unless
(i) the entity formed by or surviving any such consolidation or merger (if the
Issuer is not the surviving entity) or to which such sale, transfer or
conveyance is made (the "Surviving Entity") shall be a corporation organized and
existing under the laws of the United States of America or a State thereof or
the District of Columbia and such corporation expressly assumes, by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee by
such corporation, the due and punctual payment of the principal of, premium (if
any) and interest on all the Securities, according to their tenor, and the due
and punctual performance and observance of all of the covenants and conditions
of this Indenture to be performed by the Issuer; (ii) immediately after giving
effect to such transaction or series of transactions, no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction or series of transactions on a pro forma basis
(including, without limitation, any Indebtedness Incurred or anticipated to be
Incurred in connection with such transaction or series of transactions), the
Issuer or the Surviving Entity, as the case may be, would be able to Incur at
least $1.00 of additional Indebtedness under clause (a) of the definition of
Permitted Indebtedness; and (iv) immediately after giving effect to such
transaction or series of transactions on a pro forma basis (including, without
limitation, any Indebtedness Incurred or anticipated to be Incurred in
connection with such transaction or series of transactions) the Issuer or the
Surviving Entity, as the case may be, shall have a Consolidated Net Worth equal
to or greater than the Consolidated Net Worth of the Issuer immediately prior to
the transaction or series of transactions.
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 Property or assets of the
Issuer in accordance with Section 5.01, the successor corporation formed by such
consolidation or into which the Issuer is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such successor
corporation had been originally named as the Issuer herein. Thereafter, the
predecessor Issuer shall be discharged from all obligations and covenants under
this Indenture and the Securities.
ARTICLE VI
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
-----------------
32
(i) the Issuer defaults in the payment of interest on any Security
when it becomes due and payable and such default continues for a period of
30 days; or
(ii) the Issuer defaults in the payment of the principal of or
premium (if any) on any Security when the same becomes due and payable at
maturity, upon acceleration, required repurchase or otherwise; or
(iii) the Issuer fails to comply with Section 5.01 or fails to make
or consummate an offer to purchase securities required by Section 3.08 or
3.12; or
(iv) the Issuer fails to comply with any of the covenants and
agreements contained in Sections 3.02 through 3.11 and such Default
continues for the period and after the notice specified below; or
(v) the Issuer fails to comply with any of its agreements or
covenants in, or provisions of, the Securities or this Indenture (other
than obligations specified in clause (i), (ii), (iii) or (iv) above) and
such Default continues for the period and after the notice specified below;
or
(vi) any Indebtedness of the Issuer or any Subsidiary of the Issuer
in the outstanding principal amount of $5 million or more in the aggregate,
whether. such Indebtedness now exists or shall hereafter be created, is (A)
declared to be due and payable prior to its Stated Maturity or (B) not paid
when due by the Issuer or any Subsidiary (after giving effect to any
extension of such due date by the holder of such Indebtedness and after the
expiration of any grace period in respect of such due date contained in the
instrument under which such Indebtedness is outstanding), or any
combination of (A) and (B); or
(vii) one or more final judgments or orders for the payment of money
are entered by a court of competent jurisdiction (other than judgments or
orders which are fully and effectively covered by insurance) against the
Issuer or any Subsidiary which require the payment of money in an aggregate
amount in excess of $5 million and such final judgment or order is not
discharged, waived, stayed or satisfied for a period of 60 consecutive days
after judgment is entered; or
(viii) the Issuer or any Subsidiary, pursuant to or within the meaning
of any Bankruptcy Law: (A) commences a voluntary case or proceeding, (B)
consents to the entry of an order for relief against it in an involuntary
case or proceeding, (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) admits in writing its
inability to pay its debts as they come due; or
(ix) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that: (A) is for relief against the Issuer or any
Subsidiary in an involuntary case or proceeding, (B) appoints a Custodian
of the Issuer or any Subsidiary or for all or substantially all of its
Property or (C) orders the liquidation of the Issuer or any Subsidiary; and
in case of (A), (B) or (C) the order or decree remains unstayed and in
effect for 60 days.
33
The term "Bankruptcy Law" means Title 11 of the U.S. Code, or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A Default under clause (iv) or (v) of this Section 6.01 is not an
Event of Default until the Trustee notifies the Issuer in writing, or the
Holders of at least 25% in principal amount of the Securities then outstanding
notify the Issuer and the Trustee, in writing, of the Default, and the Issuer
does not cure the Default within 30 days (in the case of a Default specified in
clause (iv)) or 60 days (in the case of a Default specified in clause (v)) after
receipt of the notice. The notice must specify the Default, demand that it be
remedied and state that the notice is a "Notice of Default". Such notice to the
Issuer shall be given by the Trustee if so requested in writing by the Holders
of at least 25% of the principal amount of the Securities then outstanding.
Except for a Default under Section 6.01(i) or (ii) of this Indenture,
the Trustee shall not be deemed to know of a Default unless a Trust Officer has
received written notice of such Default with specific reference to this
Indenture and such Default.
SECTION 6.02. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in clause (viii) or (ix) of Section 6.01 with respect
to the Issuer) occurs and is continuing, the Trustee or the Holders of at least
25% of the principal amount of the Securities then outstanding, by written
notice to the Issuer (and to the Trustee, if given by the Holders), may declare
due and payable all of the principal and premium (if any) of the Securities plus
any accrued interest to the date of payment. Upon a declaration of acceleration,
such principal, premium (if any) and accrued interest to the date of such
acceleration, shall immediately become due and payable. If an Event of Default
specified in clause (viii) or (ix) of Section 6.01 with respect to the Issuer
occurs, all of the principal and premium (if any) of the Securities plus any
accrued interest shall become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority of the outstanding principal amount of the Securities by written
notice to the Trustee may rescind an acceleration and its consequences if (i)
all existing Events of Default, other than the nonpayment of principal of,
premium (if any) or interest on, the Securities which have become due solely
because of the acceleration, have been cured or waived, (ii) all sums paid or
advanced by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel are duly
reimbursed to the Trustee and (iii) the rescission would not conflict with any
judgment or decree of a court of competent jurisdiction.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium (if any) or interest
on, the Securities or to enforce the performance of any provision of the
Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All remedies are cumulative to the extent
permitted by law.
34
SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, 6.07
-----------------------
and 9.02, the Holders of at least a majority in principal amount of the
Securities then outstanding by notice to the Trustee may waive an existing
Default or Event of Default and its consequences, except a Default in the
nonpayment of the principal of, premium (if any) or interest on any Security.
When a Default or Event of Default is waived, it is cured and ceases.
SECTION 6.05. Control by Majority. The Holders of at least a majority
-------------------
in principal amount of the Securities then outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
that the Trustee determines may be unduly prejudicial to the rights of other
Securityholders or that may involve the Trustee in personal liability.
SECTION 6.06. Limitation on Suits. A Holder of a Security may not
-------------------
pursue a remedy with respect to this Indenture or the Securities unless: (i) the
Holder gives to the Trustee written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in principal amount of the Securities then
outstanding make a written request to the Trustee to pursue the remedy; (iii)
such Holder or Holders offer to the Trustee indemnity satisfactory to the
Trustee against any loss, liability, cost or expense; (iv) the Trustee does not
comply with the request within 60 days after receipt of the request and the
offer of indemnity; and (v) during such 60-day period the Holders of at least a
majority in principal amount of the Securities then outstanding do not give the
Trustee a direction inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal of, premium (if any) or interest on the Security on
or after the respective due dates expressed or provided for in such Security, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 6.01(i) or (ii) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Issuer or any other obligor on the Securities for the whole amount of principal,
premium (if any) and accrued interest remaining unpaid on the Securities. The
Issuer or any other obligor on the Securities shall pay interest on overdue
principal and premium, if any (including interest accruing on or after filing of
any petition in bankruptcy or reorganization relating to the Issuer or any other
obligor on the Securities, whether or not a claim for post-filing interest is
allowed in such proceeding), and the Issuer or any other obligor on the
Securities shall pay interest on overdue installments of interest, to the extent
permitted by law (including interest accruing on or after the filing of any
petition in bankruptcy or reorganization relating to the Issuer or any other
obligor on the Securities, whether or not a claim for post-filing interest is
allowed in such proceeding), in each case at the rate then borne by the
Securities, and such further amount as shall be sufficient to cover the costs
and expense of
35
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
--------------------------------
such proofs of claim (including any claim for reasonable compensation to the
Trustee and each agent, attorney and counsel, and any expenses and liabilities
incurred and all advances made by the Trustee and all other amounts due to the
Trustee under Section 7.07 hereof) and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceeding relative to the Issuer or any
other obligor upon the Securities, its creditors or its Property under any
Bankruptcy Law, and shall be entitled and empowered to collect and receive any
moneys or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Securityholder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee any amount due to it
under Section 7.07. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Securityholder in
any such proceeding.
SECTION 6.10. Application of Moneys Collected by Trustee. Any moneys
------------------------------------------
collected by the Trustee pursuant to this Article VI shall be a applied in the
order following, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal, premium (if any) or
interest, upon presentation of the several Securities, and the notation thereon
of the payment, if only partially paid, and upon surrender thereof, if fully
paid:
FIRST: to the payment of all amounts due to the pursuant to Section
7.07;
SECOND: to holders of Senior Indebtedness to the extent required by
Article X;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal, premium (if any) and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, premium (if any) and interest,
respectively; and
FOURTH: to the Issuer, its successors or assigns, or to whosoever may
be lawfully entitled to receive the same, or as a court of competent
jurisdiction may direct.
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 pursuant to
36
Section 6.07 or a suit by Holders of more than 10% in principal amount of the
Securities then outstanding.
SECTION 6.12. Parties May Be Restored to Former Position and Rights
-----------------------------------------------------
in Certain Circumstances. In the event the Trustee shall have proceeded to
------------------------
enforce any right under this Indenture by suit, foreclosure or otherwise and
such proceedings shall have been discontinued or abandoned for any reason, or
shall have been determined adversely to the Trustee, then in every such case,
the Issuer and the Trustee shall be restored without further act to their
respective former positions and rights hereunder, and all rights, remedies and
powers of the Trustee shall continue as though no such proceedings had been
taken, except to the extent determined in litigation adversely to the Trustee.
ARTICLE VII
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
-----------------
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default: (1) the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into this
Indenture against the Trustee and (2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to determine
whether or not, on their face, they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct
except that: (1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01, (2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer or other officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts and (3) the
Trustee shall not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section
6.05.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability, cost or expense (including,
without limitation, reasonable fees and disbursements of counsel).
37
(f) The Trustee shall not be obligated to pay interest on any money
received by it unless otherwise agreed in writing with the Issuer. 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. Subject to the provisions of
-----------------
Section 7.01 hereof and TIA (S) 315: (a) The Trustee may rely on any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
an Officers' Certificate or opinion of Counsel.
(c) The Trustee may act through attorneys and agents and shall not be
responsible for the misconduct or negligence of any attorney or agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within 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 Issuer shall be sufficient if
signed by an Officer of the Issuer.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Issuer or an Affiliate of the Issuer with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights. However, the Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee makes no
--------------------
representation as to the validity or adequacy of this Indenture or the
Securities; it shall not be accountable for the Issuer's use of the proceeds
from the Securities, or any money paid to the Issuer upon the Issuer's direction
under any provision hereof; and it shall not be responsible for any statement in
the Securities other than its authentication.
SECTION 7.05. Notice of Default. If a Default or Event of Default
-----------------
occurs and is continuing and if a Trust Officer has received written notice
thereof, the Trustee shall mail to Securityholders a notice of the Default or
Event of Default within 90 days after the occurrence thereof. Except in the case
of a Default or Event of Default in payment of any Security (including any
failure to: make any mandatory repurchase required hereunder), the Trustee may
withhold the notice if and so long as it in good faith determines that
withholding the notice is in the interests of the Securityholders.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after
-----------------------------
each September 15 beginning with September 15, 1994, the Trustee shall mail to
Securityholders a brief report dated as of such reporting date that complies
with TIA (S) 313(a) (but if no event described in TIA (S) 313(a) has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). Commencing at such time, the Trustee also shall comply with
38
TIA (S) 313(b)(2). The Trustee shall also transmit reports required by TIA (S)
313 by mail as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be delivered to the Issuer and filed with the SEC, if required, and each
stock exchange, if any, on which the Securities are listed. The Issuer shall
notify the Trustee when the Securities are listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity. The issuer shall pay to the
--------------------------
Trustee from time to time reasonable compensation for its services hereunder.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. Except as otherwise provided herein, the Issuer
shall reimburse the Trustee upon request for all reasonable disbursements,
advances (if any) and expenses incurred by it in accordance with the provisions
of this Indenture, including in particular, but without limitation, those
incurred in connection with the enforcement of any remedies hereunder. Such
expenses may include the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel.
Except as set forth in the next paragraph, the Issuer shall indemnify
and hold harmless the Trustee against any loss, liability, cost or expense
(including, without limitation, fees and expenses of counsel) incurred by it
arising out of or in connection with the acceptance or administration of its
duties under this Indenture, including without limitation the costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of, or failure to exercise or perform, any of its powers
or duties hereunder. The Trustee shall notify the Issuer promptly of any claim
for which it may seek indemnity. The Issuer may defend such claim and the
Trustee shall cooperate in such defense. In the event of a conflict between the
Issuer and the Trustee, the Trustee may have separate counsel and the Issuer
shall pay the reasonable fees and expenses of such counsel.
The Issuer need not reimburse any expense or indemnify against any
loss, liability, cost or expense incurred by the Trustee through negligence,
wilful misconduct or bad faith.
To secure the Issuer's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the principal of,
premium (if any) and interest on particular Securities. Such obligations shall
survive the satisfaction and discharge of this Indenture, and the resignation or
removal of the Trustee.
When the Trustee incurs expenses or renders services before or after
an Event of Default specified in clause (viii) or (ix) of Section 6.01 occurs,
the expenses and the compensation for the services are intended to constitute
expenses of administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
----------------------
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
39
The Trustee may resign by so notifying the Issuer. The Holders of a
majority in principal amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Issuer. The Issuer may remove the
Trustee if: (i) the Trustee fails to comply with Section 7.10 or TIA (S) 310;
(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 (iv)
the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of the Trustee for any reason, the Issuer shall promptly appoint a
successor Trustee. The Trustee shall be entitled to payment of its fees and
reimbursement of its expenses while acting as Trustee. Within one year after the
successor Trustee takes office, the Holders of at least a majority in principal
amount of then outstanding Securities may appoint a successor Trustee to replace
the successor Trustee appointed by the Issuer.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer or the
Holders of at least 10% in principal amount of the then outstanding Securities
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with clauses (i) through (iv) of the
second paragraph of this Section, any Securityholder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of the successor Trustee's
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Issuer's obligations under Section 7.07
hereof shall continue for the benefit or the retiring Trustee with respect to
expenses, losses and liabilities incurred by it prior to such replacement.
SECTION 7.09. Successor Trustee by Merger, Etc. Subject to Section
--------------------------------
7.10, if the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation
or national banking association, the successor entity without any further act
shall be the successor Trustee provided such corporation shall otherwise be
eligible under this Article. In case any Securities have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation of such authenticating trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
SECTION 7.10. Eligibility; Disqualification. There shall at all times
-----------------------------
be a Trustee hereunder which shall be a corporation organized and doing business
under the laws of the United States of America or of any State thereof or the
District of Columbia authorized under
40
such laws to exercise corporate trust powers, which shall be subject to
supervision or examination by a federal or state authority or a District of
Columbia authority and shall have combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition.
Subject to the preceding paragraph, this Indenture shall always have a
Trustee who satisfies the requirements of TIA (S) 310(a)(1) and (5). The Trustee
is subject to TIA (S) 310(b).
SECTION 7.11. Preferential Collection of Claims Against the Issuer.
----------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE VIII
Defeasance; Satisfaction and Discharge of Indenture; Unclaimed Moneys
---------------------------------------------------------------------
SECTION 8.01. Defeasance. At the Issuer's option, either (i) the
----------
Issuer shall be deemed to have been Discharged (as defined below) from its
obligations with respect to the Securities on the 100th day after the applicable
conditions set forth below have been satisfied or (ii) the Issuer shall cease to
be under any obligation to comply with any term, provision or condition set
forth in Sections 3.02 through 3.13 (and the Securities shall thereafter be
deemed to be not outstanding for purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed outstanding for
all other purposes hereunder), Section 5.01 and Article X on the date and any
time after the applicable conditions set forth below have been satisfied:
(a) the Issuer shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust for the purpose of
making the following payment, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders (1) money in an amount, or
(2) U.S. Government Obligations, which through the payment of interest and
principal in respect thereof in accordance with their terms will provide
(without any reinvestment of such interest or principal), not later than
one day before the due date of any payment, money in an amount, or (3) a
combination of (1) and (2), sufficient, in the opinion of a nationally
recognized firm of independent public accountants (with respect to (2) and
(3)) expressed in a written certification thereof delivered to the Trustee
at or prior to the time of such deposit, to pay and discharge each
installment of principal of and interest on, the outstanding Securities on
the dates such installments of interest or principal are due;
(b) if the Securities are then listed on a stock exchange, the Issuer
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Issuer's exercise of its option under this Section would not cause
such Securities to be delisted;
(c) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit;
41
(d) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that (and containing no qualification and only
assumptions customary for opinions of such type) Holders will not recognize
income, gain or loss for federal income tax purposes as a result of the
Issuer's exercise of its option under this Section and will be subject to
federal income tax on the same amounts and in the same manner and at the
same times as would have been the case if such option had not been
exercised and, in the case of Securities being Discharged, accompanied by a
ruling to that effect received from or published by the Internal Revenue
Service;
(e) the Issuer's exercise of its option under this provision shall
not result in any of the Issuer, the Trustee or the trust created by the
Issuer's deposit hereunder becoming or being deemed to be an "investment
company" under the Investment Company Act of 1940, as amended, or the
Issuer, the Trustee or the trust so created shall be qualified under such
act or exempt from regulation thereunder;
(f) the Issuer shall have paid or duly provided for payment of all
amounts then due to the Trustee pursuant to Section 7.07; and
(g) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an opinion of Counsel, each stating that all conditions
precedent provided for herein relating to the satisfaction and discharge of
the Securities have been complied with.
"Discharged" means that the Issuer shall be deemed to have paid and
----------
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Issuer, shall
execute proper instruments acknowledging the same and satisfaction of and
discharging this Indenture), except (1) the rights of Holders of Securities to
receive, from the trust fund described in clause (a) above, payment of the
principal and interest on the Securities when such payments are due, (2) the
Issuer's obligations with respect to the Securities under Sections 2.03, 2.04,
2.05, 2.06, 2.07, 2.13, 7.07, 7.08, 8.04, 8.05 and 8.06 and (3) the rights,
powers, trusts, duties and immunities of the Trustee hereunder. Subject to
compliance with this Article VIII, the Issuer may exercise its option to
discharge Securities pursuant to Section 8.01(i) notwithstanding the prior
exercise of its rights pursuant to Section 8.01(ii).
SECTION 8.02. Satisfaction and Discharge. If at any time (a) all
--------------------------
Securities theretofore authenticated (other than any Securities which shall have
been replaced as provided in Section 2.07) shall have been delivered to the
Trustee for cancellation or (b) all outstanding Securities shall have become due
and payable or will become due and payable in accordance with their terms within
one year, and the Issuer shall deposit or cause to be deposited with the
Trustee, in trust funds sufficient to pay at maturity the entire indebtedness on
the Securities for principal and interest due or to become due to such date of
maturity and if the Issuer with respect to the Securities shall also pay or
cause to be paid all other sums payable hereunder by the Issuer then this
Indenture shall cease to be of further effect, and on demand of and at the cost
and expense of the Issuer and subject to the Issuer's compliance with the
provisions of Section 11.04, the Trustee shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture. The Issuer agrees
to reimburse the Trustee for any costs or expenses thereafter
42
reasonably and properly incurred by the Trustee in connection with this
Indenture or the Securities.
SECTION 8.03. Application by Trustee of Funds Deposited for Payment
-----------------------------------------------------
of Securities. All moneys and U.S. Government Obligations deposited with the
-------------
Trustee pursuant to Section 8.01 or 8.02 shall be held in trust and applied by
it to the payment, either directly or through any Paying Agent (including the
Issuer acting as its own Paying Agent), to the Holders of all sums due and to
become due thereon for principal and interest.
SECTION 8.04. Paying Agent to Repay Moneys Held. Upon satisfaction
---------------------------------
and discharge of this Indenture all moneys then held by any Paying Agent under
the provisions of this Indenture shall, upon demand of the Issuer, be repaid to
it or paid to the Trustee (or, if then held by the Issuer, shall be discharged
from trust), and thereupon such Paying Agent shall be released from all further
liability with respect to such moneys.
SECTION 8.05. Return of Unclaimed Moneys. All moneys or U.S.
--------------------------
Government Obligations deposited with or paid to the Trustee or any Paying Agent
under any provision of this Indenture for the payment of the principal, premium
(if any) or interest an any Security, and not applied but remaining unclaimed
for two years after the date upon which such principal, premium (if any) or
interest shall have become due and payable, shall be repaid to the Issuer by the
Trustee or such Paying Agent on written demand (or, if then held by the Issuer,
shall be discharged from trust), and the Holder of such Security shall
thereafter look only to the Issuer for any payment which such Holder may be
entitled to collect.
SECTION 8.06. Indemnity for Government Obligations. The Issuer shall
------------------------------------
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations.
SECTION 8.07. Reinstatement. If the Trustee or Paying Agent is unable
-------------
to apply any money with respect to Securities in accordance with this Article
VIII by reason of any legal proceeding or by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer's obligations under this Indenture and
the Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article VIII until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article VIII; provided, however, that if the Issuer has made any
-------- -------
payment of principal of, premium (if any) or interest on, any Security because
of the reinstatement of its obligations, the Issuer shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Issuer and the Trustee
--------------------------
may amend this Indenture or the Securities without the consent of any
Securityholder: (i) to cure any
43
ambiguity, defect or inconsistency, provided that such change does not adversely
affect the rights hereunder of any Securityholder; (ii) to make any change
required to qualify the Indenture under the TIA; (iii) to comply with Article V;
(iv) to provide for uncertificated Securities in addition to certificated
Securities; (v) to make any change in Article X that would limit or terminate
the benefits available to any holder of Senior Indebtedness (or Representatives
therefor) under Article X; (vi) to add guarantees with respect to the Securities
or to secure the Securities; (vii) to add to the covenants of the Issuer for the
benefit of the Holders or to surrender any right or power herein conferred upon
the Issuer; or (viii) to make any change that does not adversely affect the
rights hereunder of any Securityholder.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Indebtedness then
outstanding unless such holder of such Senior Indebtedness (or a Representative
therefor) consents to such change.
SECTION 9.02. With Consent of Holders. The Issuer and the Trustee may
-----------------------
amend this Indenture or the Securities with the written consent of the Holders
of at least a majority in principal amount of the then outstanding Securities.
Upon the request of the Issuer, accompanied by a Board Resolution of the Issuer
authorizing the execution of any such amendment to this Indenture, and upon the
filing with the Trustee of evidence of the consent of the Securityholders as
aforesaid, the Trustee, subject to Section 9.06, shall join with the Issuer in
the execution of any amendment to this Indenture.
The Holders of at least a majority in principal amount of the
Securities then outstanding may waive compliance in a particular instance by the
Issuer with any provision of this Indenture or the Securities.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments signed by such Holders
in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Issuer. After an amendment or waiver under this
Section becomes effective, the Issuer shall mail to the Holder of each Security
affected thereby a notice briefly describing the amendment or waiver. Any
failure of the Issuer to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment or
waiver.
It shall not be necessary for the Securityholders to approve the
particular form of any proposed supplemental indenture, but it shall be
sufficient that they shall approve the substance thereof.
Notwithstanding anything in this Indenture to the contrary, without
the consent of each Securityholder affected, an amendment or waiver under this
Section may not: (i) reduce the amount of Securities whose Holders must consent
to an amendment or waiver; (ii) reduce the rate of or extend the time for
payment of interest on any Security; (iii) reduce the principal of or any
premium on or change the Stated Maturity for payment of principal or premium of
any Security or add or alter any redemption or repurchase provisions with
respect thereto; (iv) make
44
any Security payable in money other than that stated in the Security; (v) make
any change in Section 6.04, 6.07 or this paragraph of Section 9.02; or (vi)
adversely affect the relative ranking of any Security or the rights of any
Securityholder under Article X.
An amendment under this Section may not make any change that adversely
affects the rights under Article X of any holder of Senior Indebtedness then
outstanding unless such holder of such Senior Indebtedness (or a Representative
therefor) consents to such change.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
-----------------------------------
this Indenture or the Securities shall be set forth in a supplemental indenture
that complies with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. Until an amendment
---------------------------------
or waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security if the Trustee receives written notice of revocation
before the date the amendment or waiver becomes effective. An amendment or
waiver becomes effective in accordance with its terms and thereafter binds every
Securityholder.
The Issuer may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then notwithstanding the provisions of the
immediately preceding paragraph, those persons who were Holders at such record
date (or their duly designated proxies), and only those persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such persons continue to be Holders after such
record date. The consent shall expire 90 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If directed to
-------------------------------------
do so by the Issuer, the Trustee shall place an appropriate notation prepared by
the Issuer about an amendment or waiver on any Security thereafter
authenticated. The Issuer in exchange for all Securities may issue, and the
Trustee shall authenticate, new Securities that reflect the amendment or waiver.
SECTION 9.06. Trustee to Sign Amendments, etc. The Trustee shall sign
-------------------------------
any amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may, but need not sign it. In signing such amendment,
the Trustee shall be entitled to receive and shall be fully protected in relying
upon an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment is authorized or permitted by this Indenture.
ARTICLE X
Subordination of Securities
---------------------------
SECTION 10.01. Agreement to Subordinate. The Issuer agrees, and each
------------------------
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities
45
is subordinated in right of payment, to the extent and in the manner provided in
this Article X, to the prior payment in full in cash or cash equivalents of all
Senior Indebtedness and that this subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. Only Indebtedness of the
Issuer which is Senior Indebtedness shall rank senior to the Securities in
accordance with the provisions set forth herein.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. (a) In the event
------------------------------------
of (i) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to-the Issuer or its assets, or (ii) any liquidation,
dissolution or other winding-up of the Issuer, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (iii) any assignment
for the benefit of creditors or any other marshalling of assets or liabilities
of the Issuer, then:
(A) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or cash equivalents of all Senior Indebtedness, or
provision shall be made for such payment, before the Securityholders shall
be entitled to receive any payment or distribution of any kind or character
(excluding securities of the Issuer or any other corporation provided for
by a plan of reorganization or readjustment that are equity securities or
are subordinated in right of payment to all Indebtedness of the Issuer
issued to the holders of Senior Indebtedness in such plan of reorganization
or readjustment to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article X
(such equity securities or subordinated securities being herein called
"Permitted Junior Securities")) on account of principal of, premium (if
any) or interest on the Securities;
(B) any payment or distribution of assets of the Issuer of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), to which the Securityholders would be entitled but for
the provisions of this Article X shall be paid by the Custodian or other
Person making such payment or distribution directly to the holders of
Senior Indebtedness or their Representative or Representatives ratably
according to the aggregate amounts remaining unpaid on account of the
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full, in cash or cash equivalents, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness; and
(C) in the event that, notwithstanding the foregoing provisions of
this Section 10.02, the Trustee, a Paying Agent or any Securityholder shall
receive any payment or distribution of assets of the Issuer of any kind or
character, whether in cash, property or securities, in respect of
principal, premium (if any) or interest on the Securities before all Senior
Indebtedness is, paid in full, in cash or cash equivalents, or payment
thereof provided for, such payment or distribution (excluding Permitted
Junior Securities) shall be paid over or delivered forthwith to the
Custodian or other Person making payment or distribution of assets of the
Issuer for application to the payment of all Senior Indebtedness remaining
unpaid, to the extent necessary to pay all Senior Indebtedness in full, in
cash or cash equivalents, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
46
(b) The consolidation of the Issuer with, or the merger of the Issuer
with or into, another Person, or the liquidation or dissolution of the Issuer
following the conveyance, transfer or lease of all or substantially all of its
properties or assets to another Person in compliance with Article V shall not be
deemed a liquidation, dissolution, winding-up, assignment for the benefit of
creditors or marshalling of assets or liabilities for the purposes of this
Section 10.02.
SECTION 10.03. Payment and Non-Payment Defaults. (a) Unless Section
--------------------------------
10.02 shall be applicable, upon the occurrence of a Payment Default and receipt
by the Trustee of written notice thereof from the Issuer or a Representative or
a holder of Senior Indebtedness (except that, if an issue of Senior Indebtedness
has a Representative, only such Representative may give such notice), then no
payment or distribution of any assets of the Issuer of any kind or character,
whether in cash or property, by setoff or otherwise, shall be made by the Issuer
on account of the principal of, premium (if any) or interest on the securities
or on account of the purchase or redemption or other acquisition of any of the
Securities, and the Issuer may not make any deposit pursuant to Section 8.01 (to
make any such payment, distribution, purchase, redemption, acquisition or
deposit being referred to herein as to "pay the Securities") unless and until
such Payment Default shall have been cured or waived in writing or shall have
ceased to exist or such Senior Indebtedness shall have been discharged or paid
in full.
(b) Unless Section 10.02 shall be applicable, upon the occurrence of
a Non-Payment Default and receipt by the Trustee of written notice thereof from
a Representative or a holder of Specified Senior Indebtedness (except that, if
an issue of Specified Senior Indebtedness has a Representative, only such
Representative may give such notice) specifying an election to commence a
Payment Blockage Period (as defined below) pursuant to this Section 10.03(b),
then the Issuer shall not pay the Securities for a period (a "Payment Blockage
Period") commencing upon the receipt by the Trustee of such notice and (subject
to any blockage of payments that may then be in effect under Section 10.03(a))
ending on the earliest of (i) the 179th day thereafter, (ii) the date on which
such Non-Payment Default (and all other Non-Payment Defaults as to which written
notice is given as aforesaid during the continuance of such Payment Blockage
Period) shall have been cured or waived in writing or shall have ceased to
exist, (iii) the date on which such Specified Senior Indebtedness shall have
been discharged or paid in full, (iv) the date on which such Payment Blockage
Period shall have been terminated by written notice to the Trustee from the
Person initiating such Payment Blockage Period, (v) the occurrence of an Event
of Default specified in Section 6.01 (viii) or (ix), or (vi) the acceleration of
any Specified Senior Indebtedness, after which, in the case of clause (i), (ii),
(iii), (iv) or (vi), the Issuer shall resume making any and all required
payments in respect of the Securities, including any missed payments, and, in
the case of clause (v), the principal of all of the Securities shall be
immediately due and payable without any declaration or other act on the part of
the Trustee or any of the Securityholders. In no event shall a Payment Blockage
Period pursuant to this Section 10.03(b) extend beyond 179 days from the date of
receipt by the Trustee of the written notice referred to above specifying an
election to commence a Payment Blockage Period. Any number of notices of Non-
Payment Defaults may be given during a Payment Blockage Period, but not more
than one Payment Blockage Period pursuant to this Section 10.03(b) may commence
in any consecutive 365-day period, irrespective of the number of Non-Payment
Defaults occurring during such period.
47
(c) In the event that, notwithstanding the foregoing, the Trustee, a
Paying Agent or any Securityholder shall receive a payment or distribution
prohibited by the foregoing provisions of this Section 10.03, then the Trustee,
Paying Agent or Securityholder receiving such payment or distribution shall
promptly pay it over and deliver the same to the Issuer.
SECTION 10.04. Acceleration of Payment of Securities. If Payment of
-------------------------------------
the Securities is accelerated because of an Event of Default, the Issuer or the
Trustee shall promptly notify the holders of the Specified Senior Indebtedness
(or their Representatives) of the acceleration.
SECTION 10.05. Subrogation. After all Senior Indebtedness is paid in
-----------
full in cash or cash equivalents and until the Securities are paid in full, the
Securityholders shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments and distributions applicable to the Senior
Indebtedness, to the extent payments or distributions otherwise payable to the
Securityholders have been applied to the payment of Senior Indebtedness. For
purposes of such subrogation, no payments or distributions to the holders of
Senior Indebtedness of any cash, property or Securities to which the
Securityholders would be entitled except for the provisions of this Article X,
and no payments over pursuant to the provisions of this Article X to the holders
of the Senior Indebtedness by the Trustee, a Paying Agent or the
Securityholders, shall, as among the Issuer its creditors other than holders of
Senior Indebtedness, and the Trustee, Paying Agent and the Securityholders, be
deemed to be a payment or distribution by the Issuer to or on account of the
Senior Indebtedness.
SECTION 10.06. Relative Rights. The provisions of this Article X are
---------------
and are intended solely for the purpose of defining the relative rights of the
Trustee and the Securityholders on the one hand and the holders of Senior
Indebtedness on the other hand. Nothing in this Article X or elsewhere in this
Indenture or the Securities is intended to or shall:
(i) impair, as between the Issuer and Securityholders, the
obligation of the Issuer, which is absolute and unconditional, to pay to
the Securityholders principal of, premium (if any) and interest on the
Securities in accordance with their terms; or
(ii) prevent the Trustee or any Securityholder from exercising its
available rights and remedies upon a Default or Event of Default, as the
case may be, subject to the rights of holders of Senior Indebtedness to
receive payments and distributions, in accordance with the provisions of
this Article X, otherwise payable to the Securityholders.
SECTION 10.07. Subordination May Not Be Impaired. (a) No right of any
---------------------------------
present or future holder of Senior Indebtedness to enforce the subordination of
the Indebtedness evidenced by the Securities shall at any time or in any way be
prejudiced or impaired by any act or failure to act on the part of the Issuer or
any such holder or by any non-compliance by the Issuer with the terms,
provisions and covenants of this Indenture or the Securities, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
(b) Without in any way limiting the generality of Section 10.07(a),
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Securityholder, without
incurring responsibility to the Trustee or the
48
Securityholders and without impairing or releasing the subordination provided in
this Article X or the obligations hereunder of the Trustee, Paying Agent or the
Securityholders, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or refund or
refinance, or renew or alter, Senior Indebtedness, or change, modify, or amend
any other term of any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; (iv) exercise or refrain from exercising any rights
against the Issuer or any other Person; and (v) take any other action which
might otherwise constitute a defense available to, or discharge of, the Trustee,
Paying Agent or the Securityholders in respect of their obligations under this
Article X.
SECTION 10.08. Rights of Trustee and Paying Agent. Notwithstanding
----------------------------------
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives written notice satisfactory to it that payments may not be made under
this Article X.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and the Paying Agent may do the same with like rights. The Trustee
shall be entitled to all the rights set forth in this Article X with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness; and nothing in Article VII shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
X shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.
SECTION 10.09. Distribution of Notice to Representative. Whenever a
----------------------------------------
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.10. Article X Not to Prevent Events of Default or Limit
---------------------------------------------------
Right to Accelerate. The failure to make a payment pursuant to the Securities by
-------------------
reason of any provision in this Article X shall not be construed as preventing
the occurrence of a Default. Nothing contained in this Article X shall have any
effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities pursuant to Section 6.02 or to pursue any rights or
remedies hereunder or under applicable law.
SECTION 10.11. Trust Moneys Not Subordinated. Notwithstanding anything
-----------------------------
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations deposited with, and held in trust under Article VIII by,
the Trustee for the payment of principal of and interest on the Securities
shall, provided such deposit was not in violation of the provisions of this
Article X, not be subordinated to the prior payment of any Senior Indebtedness
or subject to the restrictions set forth in this Article X, and neither the
Trustee nor the Securityholders shall be obligated to pay over any such amount
to the Issuer or any holder of Senior Indebtedness.
49
SECTION 10.12. Trustee Entitled to Rely. Upon any payment or
------------------------
distribution pursuant to this Article X, so long as the provisions of this
Article X have been brought to the attention of the court, tribunal, Custodian
or other Person making the payment or distribution, the Trustee and the
Securityholders shall be entitled to rely upon (i) any order or decree entered
by any court of competent jurisdiction in which any proceedings of the nature
referred to in Section 10.02 are pending, (ii) a certificate of the Custodian or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) the Representatives for the holders of Senior
Indebtedness, in each case for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior
Indebtedness and other Indebtedness of the Issuer, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article X. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness to participate in any payment
or distribution pursuant to this Article X, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article X, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article X.
SECTION 10.13. Trustee to Effectuate Subordination. Each
-----------------------------------
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article X and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.14. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
------------
holders of Senior Indebtedness.
SECTION 10.15. Reliance by Holders of Senior Indebtedness on
---------------------------------------------
Subordination Provisions. Each Securityholder by accepting a Security shall be
------------------------
deemed to acknowledge and agree that the subordination provisions of this
Article X are, and are intended to be, an inducement and a consideration to each
holder of any Senior Indebtedness, whether such Senior Indebtedness was created
or acquired before or after the issuance of the Securities, to acquire, hold, or
to continue to hold, such Senior Indebtedness and each holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring or holding, or in continuing to hold, such Senior
Indebtedness.
SECTION 10.16. Reinstatement. The provisions of this Article X shall
-------------
continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Senior Indebtedness is rescinded or must otherwise be
disgorged by the holders thereof upon the insolvency, bankruptcy or
reorganization of the Issuer, all as though such payment had not been made.
50
ARTICLE XI
Miscellaneous
-------------
SECTION 11.01. Trust Indenture Act Controls. If and to the extent that
----------------------------
any provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an "incorporated provision") included in
this Indenture by operation of, Sections 310 to 318, inclusive, of the TIA, such
imposed duties or incorporated provision shall control.
SECTION 11.02. Notices. Any notice or communication to the Issuer or
-------
the Trustee is duly given if in writing and delivered in person or mailed by
first-class mail, or sent by facsimile transmission confirmed in writing, in
each case to the address set forth below:
If to the Issuer:
Xxx River Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Attention of Xxxxx X. Xxxxxxxx
If to the Trustee:
Marine Midland Bank, N.A.
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Corporate Trust Administration
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
Attention of Corporate Trust Department
The Issuer and the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Securityholder or any defect in
such notice or communication shall not affect its sufficiency with respect to
other Securityholders.
51
If a notice or communication is mailed or sent in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it, except that notice to the Trustee shall only be effective upon
receipt thereof by the Trustee.
If the Issuer mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Issuer, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 11.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Issuer to the Trustee to take any action
under this Indenture, the Issuer shall furnish to the Trustee: (i) an Officers'
Certificate (which shall include the statements set forth in Section 11.05)
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 complied with; and (ii) an opinion of Counsel (which shall
include the statements set forth in Section 11.05) stating that, in the opinion
of such counsel, all such conditions precedent and covenants have been complied
with.
SECTION 11.05. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (i) a statement that the person
making such certificate or opinion has read and understands such covenant or
condition; (ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (iii) a statement that, in the opinion of such
person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with;
provided that such counsel shall be entitled to rely as to matters of fact upon
an Officers' Certificate.
SECTION 11.06. Rules by Trustee and Agents. The Trustee may make
---------------------------
reasonable rules for action by or for a meeting of Securityholders. The
Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.
SECTION 11.07. Legal Holidays. A "Legal Holiday" is a Saturday, a
--------------
Sunday or a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to remain closed. If a payment
date is a Legal Holiday, payment may be made on the next succeeding day that is
not a Legal Holiday, and no Interest shall accrue on such payment for the
intervening period.
SECTION 11.08. No Recourse Against Others. No shareholder, as such,
--------------------------
director, officer, employee or shareholder, as such, of the Issuer shall have
any liability for any obligations of the Issuer under the Securities or this
Indenture. Each Holder by accepting a Security waives and releases all such
liability.
52
SECTION 11.09. Duplicate Originals. The parties may sign any number
-------------------
of copies of this Indenture. One signed copy is enough to prove this Indenture.
SECTION 11.10. Governing Law. This Indenture and the Securities shall
-------------
be governed by and construed in accordance with the laws of the State of New
York, without regard to conflicts of law principles.
SECTION 11.11. Successors. All agreements of the Issuer in this
----------
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12. Severability. In case any provision in this Indenture
------------
or in the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not-in any way be
affected or impaired thereby.
SECTION 11.13. Counterpart Originals. This Indenture may be signed in
---------------------
one or more counterparts. Each signed copy shall be an original, but all of them
together represent the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
XXX RIVER INC., as
Issuer,
by:________________________________
Name: Xxxxx X. Xxxxxx
Title: Director of Finance
[seal]
Attest:
____________________________________
Name: Xxxxx X. Xxxxxxxx
Title: Secretary and General Counsel
MARINE MIDLAND BANK, N.A., as
Trustee
by:________________________________
Name: Xxxxxxx Xxxx XxXxxxxx
Title: Assistant Vice President
[seal]
53
Attest:
______________________________
Name: Xxxxxx X. Xxxxxx
Title: Corporate Trust Officer
54
[EXHIBIT A]
[FORM OF FACE OF SECURITY]
10-1/8% DOLLARS
Senior XXX RIVER INC.
Subordinated Note
Due 2003
Xxx River inc., a Georgia corporation, CUSIP
promises to pay to
, or registered assigns, Dollars on
the principal sum of December 15, 2003
Interest Payment Dates: June 15 and December 15.
Record Dates: June 1 and December 1
Additional provisions of this Security are set forth on
the other side of this Security.
Xxx River Inc.
Dated: By
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
MARINE MIDLAND BANK, N.A., Chief Executive Officer
as Trustee, certifies that this is
one of the securities referred to
in the Indenture.
By Secretary
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
XXX RIVER INC.
10 1/8% SENIOR SUBORDINATED NOTE DUE 2003
1. Interest
Xxx River Inc., a Georgia corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Issuer"), promises to pay interest on the principal amount of this
Security and, to the extent permitted by law, on any overdue interest, at the
rate per annum shown above. The Issuer will pay interest semiannually on June 15
and December 15 of each year (each an "Interest Payment Date"), commencing June
15, 1994. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from December 16,
1993. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
The Issuer will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the June 1 or December 1 next preceding an Interest Payment Date
even if Securities are canceled after the record date and on or before such
Interest Payment Date. Holders must surrender Securities to a Paying Agent to
collect payments of principal and premium (if any). The Issuer will pay
principal, premium (if any) and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.
However, the Issuer may pay principal, premium (if any) and interest by check
payable in such money. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
Initially, Marine Midland Bank, N.A., a national banking association
(the "Trustee"), will act as Paying Agent and Registrar. The Issuer may appoint
and change any Paying Agent or Registrar without notice. The Issuer may act as
Paying Agent or Registrar.
4. Indenture
The Issuer issued the Securities under an Indenture dated as of
December 15, 1993 (the "Indenture"), between the Issuer and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.
Code (S) (S) 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Issuer limited
to $120,000,000 aggregate principal amount (subject to Section 2.07 of the
Indenture). The Indenture imposes certain limitations on the Issuer and its
Subsidiaries including, among others, on the Incurrence of Indebtedness by the
Issuer and its Subsidiaries, the issuance of Preferred Stock by Subsidiaries of
the Issuer, the payment of dividends and other distributions and acquisitions or
retirements of the Issuer's Capital Stock and Subordinated Obligations,
2
the sale or transfer of assets, the Incurrence of Liens and transactions with
Affiliates. In addition, the Indenture limits the ability of the Issuer and its
Subsidiaries to restrict distributions and dividends from Subsidiaries.
5. Optional Redemption
Except as set forth in this Section 5, the Issuer may not redeem the
Securities prior to December 15, 1998.
(a) On or after December 15, 1998, the Issuer may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount), plus, in each
case, accrued interest to the date fixed for redemption:
if redeemed during the 12-month period beginning December 15,
Year Percentage
---- ----------
1998............................. 105.1%
1999............................. 103.4%
2000............................. 101.7%
and thereafter at 100%.
(b) Until December 15, 1996, the Issuer may redeem a portion of the
Securities then outstanding out of the net proceeds of, and within 90 days of
the consummation of, a Public Equity Offering of the Issuer or Braelan Corp.,
the sole shareholder of the Issuer (the "Parent"), at a redemption price of
109.125% of the principal amount thereof, plus accrued interest to the
redemption date; provided, however, that immediately after any redemption
-------- -------
permitted by this paragraph (b), Securities in an aggregate principal amount of
$84 million must be outstanding.
A "Public Equity Offering" means a bona fide underwritten public
offering of Capital Stock of the Issuer or the Parent pursuant to an effective
registration statement under the Securities Act, as a result of which Capital
Stock of the Issuer or the Parent, as applicable, is distributed to the public.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000, if money sufficient to
pay the redemption price of and accrued interest on all Securities (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying
Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the right
to cause the Issuer to repurchase all or any part (in multiples of $1,000) of
the Securities of such Holder at a repurchase price equal to 101% of the
principal amount of the Securities to be repurchased plus accrued interest to
the date of repurchase as provided in, and subject to the terms of, the
Indenture.
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined in
the Indenture. To the extent provided in the Indenture, Senior Indebtedness must
be paid before the Securities may be paid. The
3
Issuer agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give effect thereto and appoints the Trustee as attorney-in-fact for such
purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form, without coupons, in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer or exchange of any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
10. Persons Deemed Owners
The registered holder of this Security may be treated as the owner of
its for all purposes.
11. Defeasance
Subject to certain conditions, the Issuer at any time may terminate
some or all of its obligations under the Securities and the Indenture if the
Issuer deposits with the Trustee money or U.S. Government Obligations for the
payment of principal and interest on the securities to redemption or maturity,
as the case may be.
12. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of a least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Issuer and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, defect or inconsistency,
or to comply with Article V of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
guarantees with respect to the Securities or to secure the Securities, or to add
additional covenants or surrender rights and powers conferred on the Issuer, or
to make any change required to qualify the Indenture under the Act, or to make
certain changes in the subordination provisions, or to make any change that does
not adversely affect the rights of any Securityholder.
13. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
or premium, if any, on the Securities at maturity, upon acceleration required
purchase or otherwise; (iii) failure by the Issuer to comply with other
agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain payment defaults or accelerations of
other Indebtedness of the Issuer or any Subsidiary if the amount defaulted or
accelerated exceeds $5 million; (v) certain events of bankruptcy or insolvency
with respect to the Issuer or any Subsidiary; and (vi) certain judgments or
decrees for the payment of money in excess of $5 million. If an Event of Default
occurs and is continuing, the
4
Trustee or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency involving the Issuer are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.
Securityholders may not enforce the Indenture of the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a Default
in payment of principal or interest) if it determines that withholding notice is
in their interest.
14. Trustee Dealings with the Issuer
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or
its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
No director, officer, employee or shareholder, as such, of the Issuer
shall have any liability for any obligations of the Issuer under the Securities
or his Indenture. Each Holder by accepting a Security waives and releases all
such liability.
I or we assign and transfer to
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
_________________________________
_________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
this Note and irrevocably appoint
_____________________________________
to transfer this Note on the books of
the Corporation. The agent may
substitute another to act for him.
5
Dated:___________________ Signed:_______________________________
(Sign exactly as name appears
on the other side of this Note)
Election of Holder To Require Purchase
If you elect to have this Security repurchased by the Issuer pursuant
to Section 3.08 (Limitation on Specified Asset Sales) of 3.12 (Change of
Control) of the Indenture, check the box below:
[_] Section 3.08 (Limitation on Specified Asset Sales) or
3.12 (Change of Control)
If you elect to have only part of the Security repurchased by the
Issuer pursuant to Section 3.08 or 3.12 of the Indenture, as applicable, state
the principal amount you elect to have repurchased: $ .
Note: The amount you elect to have repurchased must be an integral multiple of
$1,000.
Dated:___________________ Signed:_______________________________
(Sign exactly as name appears
on the other side of this Note)
Signature Guarantee:
