EXHIBIT 4.1
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Jacuzzi Brands, Inc.
Issuer
9 5/8% Senior Secured Notes due 2010
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INDENTURE
Dated as of July 15, 2003
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Wilmington Trust Company
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310 (a)(1) ........................................... 7.10
(a)(2) ........................................... 7.10
(a)(3) ........................................... N.A.
(a)(4) ........................................... N.A.
(a)(5) ........................................... 7.10
(b) ........................................... 7.08; 7.10
(c) ........................................... N.A.
311 (a) ........................................... 7.11
(b) ........................................... 7.11
(c) ........................................... N.A.
312 (a) ........................................... 2.05
(b) ........................................... 13.03
(c) ........................................... 13.03
313 (a) ........................................... 7.06
(b)(1) ........................................... 7.06
(b)(2) ........................................... 7.06
(c) ........................................... 13.02
(d) ........................................... 7.06
314 (a) ........................................... 4.02; 4.10; 13.02
(b) ........................................... 11.02
(c)(1) ........................................... 13.04
(c)(2) ........................................... 13.04
(c)(3) ........................................... 13.04
(d) ........................................... 11.05; 12.03
(e) ........................................... 13.05
(f) ........................................... N.A.
315 (a) ........................................... 7.01
(b) ........................................... 7.05; 13.02
(c) ........................................... 7.01
(d) ........................................... 7.01
(e) ........................................... 6.11
316 (a)(last sentence) ........................................... 13.06
(a)(1)(A) ........................................... 6.05
(a)(1)(B) ........................................... 6.04
(a)(2) ........................................... N.A.
(b) ........................................... 6.07
(c) ........................................... 9.04
317 (a)(1) ........................................... 6.08
(a)(2) ........................................... 6.09
(b) ........................................... 2.04
318 (a) ........................................... 13.01
(b) ........................................... N.A.
(c) ........................................... N.A.
N.A. means Not Applicable.
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Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
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Article 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions................................................................. 1
SECTION 1.02 Other Definitions........................................................... 40
SECTION 1.03 Incorporation by Reference of Trust Indenture Act........................... 41
SECTION 1.04 Rules of Construction....................................................... 41
Article 2
The Securities
SECTION 2.01 Form and Dating............................................................. 42
SECTION 2.02 Execution and Authentication................................................ 43
SECTION 2.03 Registrar and Paying Agent.................................................. 44
SECTION 2.04 Paying Agent To Hold Money in Trust......................................... 44
SECTION 2.05 Securityholder Lists........................................................ 45
SECTION 2.06 Transfer and Exchange....................................................... 45
SECTION 2.07 Replacement Securities...................................................... 45
SECTION 2.08 Outstanding Securities...................................................... 46
SECTION 2.09 Temporary Securities........................................................ 46
SECTION 2.10 Cancellation................................................................ 46
SECTION 2.11 Defaulted Interest.......................................................... 47
SECTION 2.12 CUSIP Numbers............................................................... 47
Article 3
Redemption
SECTION 3.01 Notices to Trustee.......................................................... 47
SECTION 3.02 Selection of Securities to Be Redeemed...................................... 48
SECTION 3.03 Notice of Redemption........................................................ 48
SECTION 3.04 Effect of Notice of Redemption.............................................. 49
SECTION 3.05 Deposit of Redemption Price................................................. 49
SECTION 3.06 Securities Redeemed in Part................................................. 49
Article 4
Covenants
SECTION 4.01 Payment of Securities....................................................... 50
SECTION 4.02 SEC Reports................................................................. 50
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SECTION 4.03 Limitation on Indebtedness.................................................. 51
SECTION 4.04 Limitation on Restricted Payments........................................... 55
SECTION 4.05 Limitation on Restrictions on Distributions from Restricted Subsidiaries.... 59
SECTION 4.06 Limitation on Sales of Assets and Subsidiary Stock.......................... 62
SECTION 4.07 Limitation on Affiliate Transactions........................................ 69
SECTION 4.08 Limitation on Line of Business.............................................. 71
SECTION 4.09 Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries ............................................................. 71
SECTION 4.10 Change of Control........................................................... 72
SECTION 4.11 Limitation on Liens......................................................... 74
SECTION 4.12 Limitation on Sale/Leaseback Transactions................................... 74
SECTION 4.13 Future Guarantors........................................................... 74
SECTION 4.14 Impairment of Security Interest............................................. 75
SECTION 4.15 Amendment to Security Documents............................................. 75
SECTION 4.16 Material After-Acquired Property............................................ 76
SECTION 4.17 Compliance Certificate...................................................... 76
SECTION 4.18 Further Instruments and Acts................................................ 76
Article 5
Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets................................... 77
Article 6
Defaults and Remedies
SECTION 6.01 Events of Default........................................................... 79
SECTION 6.02 Acceleration................................................................ 82
SECTION 6.03 Other Remedies.............................................................. 83
SECTION 6.04 Waiver of Past Defaults..................................................... 83
SECTION 6.05 Control by Majority......................................................... 83
SECTION 6.06 Limitation on Suits......................................................... 84
SECTION 6.07 Rights of Holders to Receive Payment........................................ 84
SECTION 6.08 Collection Suit by Trustee.................................................. 84
SECTION 6.09 Trustee May File Proofs of Claim............................................ 85
SECTION 6.10 Priorities.................................................................. 85
SECTION 6.11 Undertaking for Costs....................................................... 85
SECTION 6.12 Waiver of Stay or Extension Laws............................................ 86
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Article 7
Trustee
SECTION 7.01 Duties of Trustee........................................................... 86
SECTION 7.02 Rights of Trustee........................................................... 88
SECTION 7.03 Individual Rights of Trustee................................................ 88
SECTION 7.04 Trustee's Disclaimer........................................................ 88
SECTION 7.05 Notice of Defaults.......................................................... 89
SECTION 7.06 Reports by Trustee to Holders............................................... 89
SECTION 7.07 Compensation and Indemnity.................................................. 89
SECTION 7.08 Replacement of Trustee...................................................... 90
SECTION 7.09 Successor Trustee by Merger................................................. 91
SECTION 7.10 Eligibility; Disqualification............................................... 92
SECTION 7.11 Preferential Collection of Claims Against Company........................... 92
Article 8
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance............................ 92
SECTION 8.02 Conditions to Defeasance.................................................... 94
SECTION 8.03 Application of Trust Money.................................................. 95
SECTION 8.04 Repayment to Company........................................................ 95
SECTION 8.05 Indemnity for Government Obligations........................................ 95
SECTION 8.06 Reinstatement............................................................... 96
Article 9
Amendments
SECTION 9.01 Without Consent of Holders.................................................. 96
SECTION 9.02 With Consent of Holders..................................................... 97
SECTION 9.03 Compliance with Trust Indenture Act......................................... 99
SECTION 9.04 Revocation and Effect of Consents and Waivers............................... 99
SECTION 9.05 Notation on or Exchange of Securities....................................... 99
SECTION 9.06 Trustee To Sign Amendments.................................................. 100
SECTION 9.07 Payment for Consent......................................................... 100
Article 10
Subsidiary Guaranties
SECTION 10.01 Guaranties.................................................................. 100
SECTION 10.02 Limitation on Liability..................................................... 103
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SECTION 10.03 Successors and Assigns...................................................... 103
SECTION 10.04 No Waiver................................................................... 103
SECTION 10.05 Modification................................................................ 103
SECTION 10.06 Release of Subsidiary Guarantor............................................. 104
SECTION 10.07 Contribution................................................................ 104
Article 11
Security Documents
SECTION 11.01 Collateral and Security Documents........................................... 105
SECTION 11.02 Recordings and Opinions..................................................... 106
SECTION 11.03 Release of Collateral....................................................... 107
SECTION 11.04 Eminent Domain, Expropriation and Other Governmental Takings................ 111
SECTION 11.05 Permitted Releases Not To Impair Lien; Trust Indenture Act Requirements..... 112
SECTION 11.06 Suits To Protect the Collateral............................................. 113
SECTION 11.07 Purchaser Protected......................................................... 114
SECTION 11.08 Powers Exercisable by Receiver or Trustee................................... 114
SECTION 11.09 Disposition of Obligations Received......................................... 114
SECTION 11.10 Determinations Relating to Collateral....................................... 115
SECTION 11.11 Release upon Termination of the Company's Obligations....................... 116
SECTION 11.12 Notes Collateral Agent's Duties............................................. 116
SECTION 11.13 Additional Secured Obligations.............................................. 116
Article 12
Application of Trust Moneys
SECTION 12.01 "Trust Moneys" Defined...................................................... 117
SECTION 12.02 Retirement of Securities.................................................... 118
SECTION 12.03 Withdrawals of Trust Moneys................................................. 119
SECTION 12.04 Powers Exercisable Notwithstanding Event of Default......................... 122
SECTION 12.05 Powers Exercisable by Trustee or Receiver................................... 122
SECTION 12.06 Disposition of Securities Retired........................................... 123
SECTION 12.07 Investment and Use of Trust Moneys.......................................... 123
Article 13
Miscellaneous
SECTION 13.01 Trust Indenture Act Controls................................................ 124
SECTION 13.02 Notices..................................................................... 124
SECTION 13.03 Communication by Holders with Other Holders................................. 125
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SECTION 13.04 Certificate and Opinion as to Conditions Precedent.......................... 125
SECTION 13.05 Statements Required in Certificate or Opinion............................... 126
SECTION 13.06 When Securities Disregarded................................................. 126
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar................................ 126
SECTION 13.08 Legal Holidays.............................................................. 126
SECTION 13.09 Governing Law............................................................... 127
SECTION 13.10 No Recourse Against Others.................................................. 127
SECTION 13.11 Successors.................................................................. 127
SECTION 13.12 Multiple Originals.......................................................... 127
SECTION 13.13 Table of Contents; Headings................................................. 127
Schedule A - List of Subsidiary Guarantors
Exhibit 1 - Form of Supplemental Indenture for Future Guarantors
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange Security
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INDENTURE dated as of July 15, 2003, among
Jacuzzi Brands, Inc., a Delaware corporation (the
"Company"), the Subsidiary Guarantors from time to
time party hereto and Wilmington Trust Company, a
Delaware corporation, not in its individual capacity
but solely as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other
parties and for the equal and ratable benefit of the Holders of the Initial
Securities and, if and when issued pursuant to a registered exchange for Initial
Securities, the Exchange Securities and if and when issued pursuant to a private
exchange for Initial Securities, the Private Exchange Securities:
Article 1
Definitions and Incorporation by Reference
SECTION 1.01 Definitions.
"Additional Assets" means (1) any (A) property, plant or
equipment or (B) other long-term tangible assets, in each case used in a Related
Business; (2) the Capital Stock of a Person that becomes a Restricted Subsidiary
as a result of the acquisition of such Capital Stock by the Company or another
Restricted Subsidiary; or (3) Capital Stock constituting a minority interest in
any Person that at such time is a Restricted Subsidiary; provided, however, that
any such Restricted Subsidiary described in clause (2) or (3) above is primarily
engaged in a Related Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of Capital Stock representing 10%
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or more of the total voting power of the Voting Stock (on a fully diluted basis)
of the Company or of rights or warrants to purchase such Capital Stock (whether
or not currently exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.
"Asset Based Facility" means (i) the asset based revolving
credit facility contained in the Credit Agreement, (ii) any other facility or
financing arrangement that Refinances, in whole or in part, the borrowings and
commitments then outstanding or permitted to be outstanding under any such asset
based revolving credit facility or (iii) any other revolving credit facility.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Restricted
Subsidiary);
(2) all or substantially all the assets of any division
or line of business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or such
Restricted Subsidiary
other than, in the case of clauses (1), (2) and (3) above, (A) a disposition by
a Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to another Restricted Subsidiary, (B) for purposes of Section 4.06
only, (i) a disposition (other than a disposition of Notes Collateral) that
constitutes a Restricted Payment (or would constitute a Restricted Payment but
for the exclusions from the definition thereof) and that is not prohibited by
Section 4.04 and (ii) a disposition of all or substantially all the assets of
the Company in accordance with Section 5.01; (C) a disposition of cash or
Temporary Cash Investments; (D) the creation of a Lien (but not the sale
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or other disposition of the property subject to such Lien, except in connection
with a strict foreclosure on such property); (E) a disposition of assets with a
fair market value of less than $1.0 million; provided, however, that the
aggregate amount of such fair market value with respect to assets that
constitute Notes Collateral may not exceed $2.5 million in any calendar year;
(F) the disposition of assets in connection with a Sale/Leaseback Transaction
within 90 days after the acquisition of such assets; (G) any sale of Capital
Stock of an Unrestricted Subsidiary; and (H) sales of accounts receivable and
related assets of the type specified in the definition of "Qualified Receivables
Transaction" to a Receivables Subsidiary for the fair market value thereof,
including cash in an amount at least equal to 90% of the fair market value
thereof as determined in accordance with GAAP.
For purposes of Section 4.06 only, the disposition of Capital
Stock of a Person will be treated as a disposition of all Collateral owned by
such Person if after giving effect to such disposition of such Capital Stock,
the Company and the Restricted Subsidiaries do not control such Person.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended); provided, however, that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of "Capital Lease Obligation".
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (1) the sum of
the products of the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of or redemption or similar
payment with respect to such Indebtedness multiplied by the amount of such
payment by (2) the sum of all such payments.
"Bank Collateral" means all Collateral that does not
constitute Notes Collateral.
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"Bank Collateral Agent" means Fleet Capital Corporation and
any successor under the Credit Agreement.
"Bank Credit Facility" means the Asset Based Facility and the
Term Loan Facility.
"Bank Lenders" means the lenders or holders of Indebtedness
issued under the Credit Agreement.
"Bank Representative" means any trustee, agent or
representative with respect to Indebtedness issued under the Credit Agreement.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is
required to be classified and accounted for as a capital lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty. For purposes of Section 4.11, a Capital
Lease Obligation will be deemed to be secured by a Lien on the property being
leased.
"Capital Stock" of any Person means any and all shares,
interests (including partnership interests), rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such Person, including any Preferred Stock, but excluding
any debt securities convertible into such equity.
"Change of Control" means the occurrence of any of the
following events:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of
this
5
clause (1) such person shall be deemed to have "beneficial ownership" of all
shares 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 more than 35% of the total voting power of the Voting Stock of
the Company;
(2) individuals who on the Issue Date constituted the
Board of Directors (together with any new directors whose election by such Board
of Directors or whose nomination for election by the shareholders of the Company
was approved by a majority of the directors of the Company then still in office
who were either directors on the Issue Date or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office;
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) the merger or consolidation of the Company with or
into another Person or the merger of another Person with or into the Company, or
the sale of all or substantially all the assets of the Company (determined on a
consolidated basis) to another Person, other than a transaction following which
(A) in the case of a merger or consolidation transaction, holders of securities
that represented 100% of the Voting Stock of the Company immediately prior to
such transaction (or other securities into which such securities are converted
as part of such merger or consolidation transaction) own directly or indirectly
at least a majority of the voting power of the Voting Stock of the surviving
Person in such merger or consolidation transaction immediately after such
transaction and in substantially the same proportion as before the transaction
and (B) in the case of a sale of assets transaction, each transferee becomes an
obligor in respect of the Securities and a Subsidiary of the transferor of such
assets.
"Class A Collateral Agreement" means the Class A Collateral
Agreement dated as of July 15, 2003, among the Company, the Subsidiary
Guarantors and the Notes Collateral Agent, as the same may be amended from time
to time in accordance with its terms and this Indenture.
6
"Class A Security Documents" means the Class A Collateral
Agreement, the Notes Collateral Agency Agreement, the Intercreditor Agreement,
the Mortgages, any agreements pursuant to which assets are added to the Notes
Collateral and any other instruments or documents entered into or delivered in
connection with any of the foregoing, as such agreements, instruments or
documents may from time to time be amended.
"Class B Collateral Agreement" means the Class B Collateral
Agreement dated as of July 15, 2003, among the Company, the Subsidiary
Guarantors and the Notes Collateral Agent, as the same may be amended from time
to time in accordance with its terms and this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all the collateral provided for under and
described in the Security Documents.
"Collateral Agreements" means the Class A Collateral Agreement
and the Class B Collateral Agreement.
"Company" means the party named as such in this Indenture
until a successor replaces it and, thereafter, means the successor and, for
purposes of any provision contained herein and required by the TIA, each other
obligor on the Securities.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of
(1) the aggregate amount of EBITDA for the period of the
most recent four consecutive fiscal quarters ending at least 45 days
prior to the date of such determination to
(2) Consolidated Interest Expense for such four fiscal
quarters;
provided, however, that
(1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period that
remains outstanding or if the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio is an Incurrence of
7
Indebtedness, or both, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been Incurred on
the first day of such period;
(2) if the Company or any Restricted Subsidiary has
repaid, repurchased, defeased or otherwise discharged any Indebtedness
since the beginning of such period or if any Indebtedness is to be
repaid, repurchased, defeased or otherwise discharged (in each case
other than Indebtedness Incurred under any revolving credit facility
unless such Indebtedness has been permanently repaid and has not been
replaced) on the date of the transaction giving rise to the need to
calculate the Consolidated Coverage Ratio, EBITDA and Consolidated
Interest Expense for such period shall be calculated on a pro forma
basis as if such discharge had occurred on the first day of such period
and as if the Company or such Restricted Subsidiary has not earned the
interest income actually earned during such period in respect of cash
or Temporary Cash Investments used to repay, repurchase, defease or
otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or
any Restricted Subsidiary shall have made any Asset Disposition, EBITDA
for such period shall be reduced by an amount equal to EBITDA (if
positive) directly attributable to the assets which are the subject of
such Asset Disposition for such period, or increased by an amount equal
to EBITDA (if negative), directly attributable thereto for such period
and Consolidated Interest Expense for such period shall be reduced by
an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in
connection with such Asset Disposition for such period (or, if the
Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company
and its continuing Restricted Subsidiaries are no longer liable for
such Indebtedness after such sale);
8
(4) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction
requiring a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment or acquisition occurred on the
first day of such period; and
(5) if since the beginning of such period any Person
(that subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of
such period) shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (3) or (4) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition
occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term in excess
of 12 months).
"Consolidated Current Liabilities" as of the date of
determination means the aggregate amount of liabilities of the Company and its
consolidated Restricted Subsidiaries
9
which may properly be classified as current liabilities (including taxes accrued
as estimated), on a consolidated basis, after eliminating (1) all intercompany
items between the Company and any Restricted Subsidiary and (2) all current
maturities of long-term Indebtedness, all as determined in accordance with GAAP
consistently applied.
"Consolidated Interest Expense" means, for any period, the
total interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such total interest expense,
and to the extent incurred by the Company or its Restricted Subsidiaries,
without duplication:
(1) interest expense attributable to Capital Lease
Obligations;
(2) amortization of debt discount and debt issuance cost
(other than debt issuance costs associated with the Refinancing Transactions);
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing;
(6) net payments pursuant to Hedging Obligations;
(7) dividends accrued in respect of all Preferred Stock
held by Persons other than the Company or a Wholly Owned Subsidiary (other than
dividends payable solely in Capital Stock (other than Disqualified Stock) of the
Company); provided, however, that such dividends will be multiplied by a
fraction, the numerator of which is one and the denominator of which is one
minus the effective combined tax rate of the issuer of such Preferred Stock
(expressed as a decimal) for such period (as estimated by the chief financial
officer of the Company in good faith);
(8) interest incurred in connection with Investments in
discontinued operations;
(9) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed
10
by (or secured by the assets of) the Company or any Restricted Subsidiary; and
(10) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust.
"Consolidated Net Income" means, for any period, the net
income of the Company and its consolidated Subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company)
if such Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause
(4) below, the Company's equity in the net income of any such
Person for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company
or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid
to a Restricted Subsidiary, to the limitations contained in
clause (3) below); and
(B) the Company's equity in a net loss of any
such Person for such period shall be included in determining
such Consolidated Net Income;
(2) any net income (or loss) of any Person acquired by
the Company or a Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition;
(3) any net income of any Restricted Subsidiary (other
than a Subsidiary Guarantor) to the extent that such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that:
11
(A) subject to the exclusion contained in clause
(4) below, the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of
cash actually distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as
a dividend or other distribution (subject, in the case of a
dividend or other distribution paid to another Restricted
Subsidiary, to the limitation contained in this clause); and
(B) the Company's equity in a net loss of any
such Restricted Subsidiary for such period shall be included
in determining such Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated Subsidiaries or any
other Person (including pursuant to any sale-and-leaseback arrangement) which
are not sold or otherwise disposed of in the ordinary course of business and any
gain (or loss) realized upon the sale or other disposition of any Capital Stock
of any Person;
(5) extraordinary gains or losses; and
(6) the cumulative effect of a change in accounting
principles;
in each case, for such period. Notwithstanding the foregoing, for the purpose of
Section 4.04 only, (i) there shall be excluded from Consolidated Net Income any
repurchases, repayments or redemptions of Investments, proceeds realized on the
sale of Investments or return of capital to the Company or a Restricted
Subsidiary to the extent such repurchases, repayments, redemptions, proceeds or
returns increase the amount of Restricted Payments permitted pursuant to Section
4.04(a)(3)(D) or Section 4.04(b)(6) and (ii) for purposes only of calculating
Consolidated Net Income for the fiscal quarter during which the Issue Date
occurs, there shall be excluded non-recurring fees, charges (including non-cash
charges) or other expenses paid, made or incurred in connection with the
Refinancing Transactions that are accounted for within 90 days of the
consummation of the Refinancing Transactions.
12
"Consolidated Net Tangible Assets" as of any date of
determination, means the total amount of assets (less accumulated depreciation
and amortization, allowances for doubtful receivables, other applicable reserves
and other properly deductible items) which would appear on a consolidated
balance sheet of the Company and its consolidated Restricted Subsidiaries,
determined on a consolidated basis in accordance with GAAP, and after giving
effect to purchase accounting and after deducting therefrom Consolidated Current
Liabilities and, to the extent otherwise included, the amounts of:
(1) minority interests in consolidated Subsidiaries held
by Persons other than the Company or a Restricted Subsidiary;
(2) excess of cost over fair value of assets of
businesses acquired, as determined in good faith by the Board of Directors;
(3) any revaluation or other write-up in book value of
assets subsequent to the Issue Date as a result of a change in the method of
valuation in accordance with GAAP consistently applied;
(4) unamortized debt discount and expenses and other
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, licenses, organization or developmental expenses and
other intangible items;
(5) treasury stock;
(6) cash set apart and held in a sinking or other
analogous fund established for the purpose of redemption or other retirement of
Capital Stock to the extent such obligation is not reflected in Consolidated
Current Liabilities; and
(7) Investments in and assets of Unrestricted
Subsidiaries.
"Credit Agreement" means the Loan and Security Agreement to be
entered into by and among the Company, certain of its Subsidiaries, the
revolving loan lenders and term loan lenders referred to therein, Fleet Capital
Corporation, as Administrative Agent, Credit Suisse First Boston, Cayman Islands
Branch and Bank One, NA, as Co-
13
Syndication Agents, and the term loan agent named therein, setting forth as of
the date hereof, the terms of the Bank Credit Facility, together with the
related documents thereto (including the term loans and revolving loans
thereunder, any guarantees and security documents), as amended, extended,
renewed, restated, supplemented or otherwise modified (in whole or in part, and
without limitation as to amount, terms, conditions, covenants and other
provisions) from time to time, and any agreement (and related document)
governing Indebtedness incurred to Refinance, in whole or in part, the
borrowings and commitments then outstanding or permitted to be outstanding under
such Credit Agreement or a successor Credit Agreement (including without
limitation, the Bank Credit Facility), whether by the same or any other lender
or group of lenders.
"Currency Agreement" means any foreign exchange contract,
currency swap agreement or other similar agreement with respect to currency
values.
"Default" means any event which is, or after notice or passage
of time or both would be, an Event of Default.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable at the option of the holder) or
upon the happening of any event:
(1) matures or is mandatorily redeemable (other than
redeemable only for Capital Stock of such Person which is not itself
Disqualified Stock) pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon
the occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders thereof the right
to require such Person to purchase or redeem such
14
Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if (A) the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the terms applicable to the
Securities in Sections 4.06 and 4.10 of this Indenture and (B) any such
requirement only becomes operative after compliance with such terms applicable
to the Securities, including the purchase of any Securities tendered pursuant
thereto.
The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price will be calculated in accordance
with the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to the Indenture; provided,
however, that if such Disqualified Stock could not be required to be redeemed,
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price will be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary
(other than a Receivables Subsidiary) that is incorporated or otherwise
organized under the laws of the United States, any State thereof or the District
of Columbia.
"EBITDA" for any period means the sum of Consolidated Net
Income, plus the following to the extent deducted in calculating such
Consolidated Net Income:
(1) all income tax expense of the Company and its
consolidated Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation and amortization expense of the Company
and its consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in a
prior period);
(4) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any
15
such non-cash charge to the extent that it represents an accrual of or reserve
for cash expenditures in any future period); and
(5) any non-recurring fees, charges or other expenses
paid, made or incurred in connection with the Refinancing Transactions that are
paid or otherwise accounted for within 90 days of the consummation of the
Refinancing Transactions;
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion,
including by reason of minority interests) that the net income or loss of such
Restricted Subsidiary was included in calculating Consolidated Net Income and
only if a corresponding amount would be permitted at the date of determination
to be dividended to the Company by such Restricted Subsidiary without prior
approval (that has not been obtained), pursuant to the terms of its charter and
all agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to such Restricted Subsidiary or its
stockholders.
"Euro Equivalents" means with respect to any monetary amount
in a currency other than euros, at any time of determination thereof, the amount
of euros obtained by converting such foreign currency involved in such
computation into euros at the spot rate for the purchase of euros with the
applicable foreign currency as published in The Wall Street Journal in the
"Exchange Rates" column under the heading "Currency Trading" on the date two
Business Days prior to such determination.
"Exchange Act" means the U.S. Securities Exchange Act of 1934,
as amended.
"Exchange Securities" means the debt securities of the Company
issued pursuant to this Indenture in exchange for, and in an aggregate principal
amount at maturity equal to, the Initial Securities, in compliance with the
terms of the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or
property, the price which could be negotiated in
16
an arm's-length, free market transaction, for cash, between a willing seller and
a willing and able buyer, neither of whom is under undue pressure or compulsion
to complete the transaction. Fair Market Value will be determined by an
Independent Qualified Party.
"Foreign Subsidiary" means any Restricted Subsidiary of the
Company that is not a Domestic Restricted Subsidiary.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the Issue Date, including those set
forth in:
(1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial
Accounting Standards Board;
(3) such other statements by such other entity as
approved by a significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the
inclusion of financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
All ratios and computations based on GAAP contained in this
Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness of such Person (whether arising by
virtue of partnership arrangements, or by agreements to keep-well, to purchase
17
assets, goods, securities or services, to take-or-pay or to maintain financial
statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Guaranty Agreement" means a supplemental indenture, in
substantially the form included as Exhibit 1 to this Indenture, pursuant to
which a Subsidiary Guarantor guarantees the Company's obligations with respect
to the Securities on the terms provided for in this Indenture.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise
become liable for; provided, however, that any Indebtedness of a Person existing
at the time such Person becomes a Restricted Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Person at the time it becomes a Restricted Subsidiary. The term "Incurrence"
when used as a noun shall have a correlative meaning.
Solely for purposes of determining compliance with Section
4.03:
(1) amortization of debt discount or the accretion of
principal with respect to a non-interest bearing or other discount security;
(2) the payment of regularly scheduled interest in the
form of additional Indebtedness of the same instrument or the payment of
regularly scheduled dividends
18
on Capital Stock in the form of additional Capital Stock of the same class and
with the same terms; and
(3) the obligation to pay a premium in respect of
Indebtedness arising in connection with the issuance of a notice of redemption
or the making of a mandatory offer to purchase such Indebtedness;
will not be deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by notes, debentures,
bonds or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such indebtedness
to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into by such
Person;
(3) all obligations of such Person issued or assumed as
the deferred purchase price of property, all conditional sale obligations of
such Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary course
of business);
(4) all obligations of such Person for the reimbursement
of any obligor on any letter of credit, bankers' acceptance or similar credit
transaction (other than obligations with respect to letters of credit securing
obligations (other than obligations described in clauses (1) through (3) above)
entered into in the ordinary course of business of such Person to the extent
such letters of credit are not drawn upon or, if and to the extent drawn upon,
such drawing is reimbursed no later than the tenth Business Day following
payment on the letter of credit);
(5) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any Disqualified
Stock of such Person or, with respect to any Preferred Stock of any Subsidiary
of
19
such Person, the principal amount of such Capital Stock to be determined in
accordance with this Indenture (but excluding, in each case, any accrued
dividends);
(6) all obligations of the type referred to in clauses
(1) through (5) of other Persons and all dividends of other Persons for the
payment of which, in either case, such Person is responsible or liable, directly
or indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses
(1) through (6) of other Persons secured by any Lien on any property or asset of
such Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of such
property or assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase by the Company or
any Restricted Subsidiary of any business, the term "Indebtedness" will exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
however, that, at the time of closing, the amount of any such payment is not
determinable and, to the extent such payment thereafter becomes fixed and
determined, the amount is paid within 30 days thereafter.
The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations at such
date; provided, however, that in the case of Indebtedness sold at a discount,
the amount of such Indebtedness at any time will be the accreted value thereof
at such time.
"Indenture" means this Indenture as amended or supplemented
from time to time.
20
"Independent Qualified Party" means an investment banking
firm, accounting firm or appraisal firm of national standing; provided, however,
that such firm is not an Affiliate of the Company.
"Initial Purchasers" means Credit Suisse First Boston LLC,
Fleet Securities, Inc., Banc One Capital Markets, Inc. and Xxxxxxxxx & Company,
Inc.
"Intercreditor Agreement" means the Intercreditor Agreement
dated as of July 15, 2003, among the Company and certain of its subsidiaries,
the Trustee, the Notes Collateral Agent and the Bank Representative, as may be
amended or supplemented from time to time in accordance with its terms and this
Indenture.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement with respect to exposure to interest rates.
"Investment" in any Person means any direct or indirect
advance, loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of Guarantee or similar
arrangement) or capital contribution to (by means of any transfer of cash or
other property to others or any payment for property or services for the account
or use of others), or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by such Person. Except as otherwise provided
for herein, the amount of an Investment shall be its fair value at the time the
Investment is made and without giving effect to subsequent changes in value.
For purposes of the definition of "Unrestricted Subsidiary",
the definition of "Restricted Payment" and Section 4.04:
(1) "Investment" shall include the portion (proportionate
to the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall
be deemed to continue to have a permanent "Investment" in an
21
Unrestricted Subsidiary equal to an amount (if positive) equal to (A) the
Company's "Investment" in such Subsidiary at the time of such redesignation less
(B) the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of such Subsidiary at the
time of such redesignation; and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors.
"Issue Date" means July 15, 2003.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions are not required to be open in the State of New York.
"Lenders" has the meaning specified in the Credit Agreement.
"Lenders Debt" means any (i) Indebtedness outstanding from
time to time under the Credit Agreement, (ii) any Indebtedness which has a
priority security interest relative to the Securities in the Bank Collateral and
as to which the Securities have a priority security interest in the Notes
Collateral, (iii) all Obligations with respect to such Indebtedness and (iv) all
cash management Obligations incurred with any Bank Lender (or their affiliates).
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Material After-Acquired Property" means (i) equipment or
fixtures acquired by the Company or any Restricted Subsidiary after the Issue
Date which constitute accretions, additions or technological upgrades to the
equipment or fixtures that form part of the Notes Collateral, (ii) any
equipment, fixtures and real estate of the Company or any Domestic Restricted
Subsidiary acquired after the Issue Date and which is not subject to a Permitted
Lien pursuant to clause (6) of the definition thereof and (iii) any assets that
qualify as "Additional Assets" pursuant to clause (1) of the definition thereof
and that were acquired by the Company or any Restricted
22
Subsidiary in compliance with Section 4.06(a)(3) or Section 4.06(a)(4)(A).
"Mortgage" means a mortgage, deed of trust, deed to secure
debt, assignment of leases and rents, leasehold mortgage, land charge or other
security document granting a Lien on any Mortgaged Property to secure the
Security Obligations of the Company or the applicable Guarantor. Each Mortgage
shall be reasonably satisfactory in form and substance to the Notes Collateral
Agent.
"Mortgaged Property" means, initially, each parcel of real
property and the improvements thereto owned by the Company or any Guarantor and
identified on Schedule 8 of the Perfection Certificate and includes each other
parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to this Indenture.
"Net Available Cash" from an Asset Disposition means cash
payments received therefrom (including any cash payments received by way of
deferred payment of principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of any securities
received as consideration, but only as and when received, but excluding any
other consideration received in the form of assumption by the acquiring Person
of Indebtedness or other obligations relating to such properties or assets or
received in any other non-cash form), in each case net of:
(1) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be accrued as a liability under
GAAP, as a consequence of such Asset Disposition;
(2) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon or other security agreement of any kind with respect to
such assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the
proceeds from such Asset Disposition;
(3) all distributions and other payments required to be
made to minority interest holders in
23
Restricted Subsidiaries as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of
Capital Stock or Indebtedness, means the cash proceeds of such issuance or sale
net of attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Non-Qualifying Preferred Stock" means, with respect to any
Person, any Preferred Stock which by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable at the option of
the holder) or upon the happening of any event:
(1) is mandatorily redeemable (other than redeemable only
for Capital Stock of such Person which is not itself Non-Qualifying Preferred
Stock) pursuant to a sinking fund obligation or otherwise;
(2) is convertible or exchangeable at the option of the
holder for Non-Qualifying Preferred Stock; or
(3) is mandatorily redeemable or must be purchased upon
the occurrence of certain events or otherwise, in whole or in part.
"Notes Collateral" means the portion of the Collateral as to
which the Securities have a priority security interest relative to Lenders Debt.
"Notes Collateral Agency Agreement" means the Collateral
Agency Agreement dated as of July 15, 2003, among the Company, the Subsidiary
Guarantors, the Representatives and Unrepresented Holders referred to therein
and the Notes Collateral Agent, as the same may be amended from time to time in
accordance with its terms and this Indenture.
24
"Notes Collateral Agent" means Wilmington Trust Company and
any successor under the Notes Collateral Agency Agreement.
"Obligations" means with respect to any Indebtedness, all
obligations for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Circular" means the offering circular dated June 30,
2003, used in connection with the sale of the Initial Securities.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers.
"Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Pari Passu Debt" means any Refinancing Indebtedness in
respect of the Securities; provided, however, that if such Refinancing
Indebtedness contains or otherwise has the benefit of provisions effectively
requiring that proceeds from sales or transfers of property or assets by the
Company or any Subsidiary of the Company be applied to repay, redeem or retire
or offer to repay, redeem or retire such Refinancing Indebtedness, the terms
thereof shall be no more favorable to the holders of such Refinancing
Indebtedness than those set forth in the Indenture for the benefit of the
holders of the Securities.
"Pari Passu Debt Instrument" means the instruments evidencing
and the agreements governing any Pari Passu Debt that may be outstanding at any
time.
"Pari Passu Debt Representative" means any trustee, agent or
other representative of the holders of an issue of, or lenders under an
agreement or facility evidencing and governing, any Pari Passu Debt or, in case
any holders of the Pari Passu Debt have no such trustee, agent or other
representative, the holders of a majority in
25
aggregate principal amount of outstanding Pari Passu Debt under the applicable
Pari Passu Debt Instrument.
"Perfection Certificate" means the perfection certificate
delivered by the Company to the Notes Collateral Agent on the Issue Date.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that
will, upon the making of such Investment, become a Restricted Subsidiary;
provided, however, that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person, if as a result of such Investment,
such other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a Restricted
Subsidiary; provided, however, that such Person's primary business is a Related
Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of business and payable
or dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the Company
or any such Restricted Subsidiary deems reasonable under the circumstances;
(5) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business;
(6) loans or advances to employees made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary;
(7) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary or in satisfaction of judgments;
26
(8) any Person to the extent such Investment represents
the non-cash portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.06;
(9) any Person where such Investment was acquired by the
Company or any of its Restricted Subsidiaries (a) in exchange for any other
Investment or accounts receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other Investment or
accounts receivable or (b) as a result of a foreclosure by the Company or any of
its Restricted Subsidiaries with respect to any secured Investment or other
transfer of title with respect to any secured Investment in default;
(10) any Person to the extent such Investments consist of
prepaid expenses, negotiable instruments held for collection and lease, utility
and workers' compensation, performance and other similar deposits made in the
ordinary course of business by the Company or any Restricted Subsidiary;
(11) any Person to the extent such Investments consist of
(i) Hedging Obligations otherwise permitted under Section 4.03 or (ii)
agreements or arrangements designed to protect such Person against fluctuations
in commodity prices;
(12) Persons to the extent such Investments are in
existence on the Issue Date;
(13) any Person to the extent such Investment constitutes
the transfer or grant of a license to use the patents, trade secrets, know-how
or other intellectual property of the Company or any of its Restricted
Subsidiaries; provided, however, that such transfer or grant does not (i)
prohibit the Company or any of its Restricted Subsidiaries from using the
intellectual property licensed or require the Company or any Restricted
Subsidiary to pay any fees for any such use or (ii) materially impair the value
of such intellectual property to the Company and its Restricted Subsidiaries;
(14) Permitted Joint Venture Investments to the extent
that such Investments, when taken together with all other Investments made
pursuant to this clause (14)
27
outstanding on the date such Investment is made, do not exceed $15.0 million;
(15) any Investment by the Company or a Restricted
Subsidiary in a Receivables Subsidiary, or any Investment by a Receivables
Subsidiary in another Person, in each case in connection with a Qualified
Receivables Transaction; provided, however, that such Investment is in the form
of a purchase money note, equity or residual interest or limited liability
company interest; and
(16) Persons to the extent such Investments, when taken
together with all other Investments made pursuant to this clause (16)
outstanding on the date such Investment is made, do not exceed $10.0 million.
"Permitted Joint Venture" means any Person in which the
Company or any of its Restricted Subsidiaries has made a Permitted Joint Venture
Investment pursuant to clause (14) of the definition of "Permitted Investment".
"Permitted Joint Venture Investment" means any Investment by
the Company or any of its Restricted Subsidiaries in any Person in connection
with any joint venture or similar arrangement; provided, however, that such
Person is engaged in Related Business.
"Permitted Liens" means, with respect to any Person:
(1) pledges or deposits by such Person under worker's
compensation laws, unemployment insurance laws or similar legislation, or good
faith deposits in connection with bids, tenders, contracts (other than for the
payment of Indebtedness) or leases to which such Person is a party, or deposits
to secure public or statutory obligations of such Person or deposits of cash or
United States government bonds to secure surety or appeal bonds to which such
Person is a party, or deposits as security for contested taxes or import duties
or for the payment of rent, in each case Incurred in the ordinary course of
business;
(2) Liens imposed by law, such as carriers',
warehousemen's and mechanics' Liens, in each case for sums not yet due or being
contested in good faith by appropriate proceedings or other Liens arising out of
judgments or awards against such Person with respect to which such Person shall
then be proceeding with an appeal or other
28
proceedings for review and Liens arising solely by virtue of any statutory or
common law provision relating to banker's Liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution; provided, however, that (A) such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Company in excess of those set forth by
regulations promulgated by the Federal Reserve Board and (B) such deposit
account is not intended by the Company or any Restricted Subsidiary to provide
collateral to the depository institution;
(3) Liens for property taxes not yet subject to penalties
for non-payment or which are being contested in good faith by appropriate
proceedings;
(4) Liens in favor of issuers of surety bonds or letters
of credit issued pursuant to the request of and for the account of such Person
in the ordinary course of its business; provided, however, that such letters of
credit do not constitute Indebtedness;
(5) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, licenses, rights-of-way,
ingress, egress, parking, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real property or Liens incidental to the conduct of the business of such Person
or to the ownership of its properties which were not Incurred in connection with
Indebtedness and which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person;
(6) Liens securing Indebtedness Incurred to finance the
construction, purchase or lease of, or repairs, improvements or additions to,
property, plant or equipment of such Person; provided, however, that the Lien
may not extend to any other property owned by such Person or any of its
Restricted Subsidiaries at the time the Lien is Incurred (other than assets and
property affixed or appurtenant thereto), and the Indebtedness (other than any
interest thereon) secured by the Lien may not be Incurred more than 180 days
after the later of the acquisition, completion of construction, repair,
improvement, addition
29
or commencement of full operation of the property subject to the Lien;
(7) Liens to secure Lenders Debt on property that
constitutes Collateral; provided, however, that to the extent such Lien is on
property that constitutes Notes Collateral, such Lien does not rank prior to or
equally and ratably with the Liens in favor of the Securities and any Pari Passu
Indebtedness;
(8) Liens existing on the Issue Date;
(9) Liens on property or shares of Capital Stock of
another Person at the time such other Person becomes a Subsidiary of such
Person; provided, however, that the Liens may not extend to any other property
owned by such Person or any of its Restricted Subsidiaries (other than assets
and property affixed or appurtenant thereto);
(10) Liens on property at the time such Person or any of
its Subsidiaries acquires the property, including any acquisition by means of a
merger or consolidation with or into such Person or a Subsidiary of such Person;
provided, however, that the Liens may not extend to any other property owned by
such Person or any of its Restricted Subsidiaries (other than assets and
property affixed or appurtenant thereto);
(11) Liens securing Indebtedness or other obligations of a
Subsidiary of such Person owing to such Person or a Wholly Owned Subsidiary of
such Person;
(12) Liens securing Hedging Obligations so long as such
Hedging Obligations relate to Indebtedness that is, and is permitted to be under
this Indenture, secured by a Lien on the same property securing such Hedging
Obligations;
(13) Liens to secure any Refinancing (or successive
Refinancings) as a whole, or in part, of any Indebtedness secured by any Lien
referred to in the foregoing clause (6), (8), (9) or (10); provided, however,
that (A) such new Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which the
original Lien arose, could secure the original Lien (plus improvements and
accessions to such property or proceeds or distributions thereof) and (B) the
Indebtedness secured by
30
such Lien at such time is not increased to any amount greater than the sum of
(i) the outstanding principal amount or, if greater, committed amount of the
Indebtedness described under clause (6), (8), (9) or (10) at the time the
original Lien became a Permitted Lien and (ii) an amount necessary to pay any
fees and expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement; and
(14) Liens to secure Indebtedness or other Obligations in
an aggregate principal amount which, when taken together with all other
Indebtedness and Obligations secured by Liens pursuant to this clause (14) and
remaining outstanding, do not exceed $10.0 million.
Notwithstanding the foregoing, "Permitted Liens" will not include any Lien
described in clause (6), (9) or (10) above to the extent such Lien applies to
any Additional Assets acquired directly or indirectly from Net Available Cash
pursuant to Section 4.06. For purposes of this definition, the term
"Indebtedness" shall be deemed to include interest on such Indebtedness.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Pound Equivalents" means with respect to any monetary amount
in a currency other than pound sterling, at any time of determination thereof,
the amount of pound sterling obtained by converting such foreign currency
involved in such computation into pound sterling at the spot rate for the
purchase of pound sterling with the applicable foreign currency as published in
The Wall Street Journal in the "Exchange Rates" column under the heading
"Currency Trading" on the date two Business Days prior to such determination.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
31
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security which is due or overdue or is
to become due at the relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock or Preferred Stock (other than Disqualified Stock or
Non-Qualifying Preferred Stock) of the Company pursuant to an effective
registration statement under the Securities Act.
"Qualified Receivables Transaction" means any transaction or
series of transactions entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
sells, conveys or otherwise transfers to (i) a Receivables Subsidiary (in the
case of a transfer by the Company or any of its Restricted Subsidiaries) and
(ii) any other Person (in the case of a transfer by a Receivables Subsidiary),
or grants a security interest in, any accounts receivable (whether now existing
or arising in the future) of the Company or any of its Restricted Subsidiaries,
and any assets related thereto, including all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Subsidiary of the Company
which engages in no activities other than in connection with the financing of
accounts receivable and which is designated by the Board of Directors of the
Company (as provided below) as a Receivables Subsidiary (a) no portion of the
Indebtedness or any other Obligations (contingent or otherwise) of which (i) is
Guaranteed by the Company or any of its Restricted Subsidiaries (but excluding
customary representations, warranties, covenants and indemnities entered into in
the ordinary course of business in connection with a Qualified Receivables
Transaction), (ii) is recourse to or obligates the Company or any of its
Restricted Subsidiaries in any way other than pursuant to customary
representations, warranties, covenants and indemnities entered into in
connection with a Qualified Receivables Transaction or (iii) subjects any
property of asset of the Company or any of its Restricted
32
Subsidiaries (other than accounts receivable and related assets as provided in
the definition of "Qualified Receivables Transaction"), directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
customary representations, warranties, covenants and indemnities entered into in
the ordinary course of business in connection with a Qualified Receivables
Transaction, (b) with which neither the Company nor any of its Restricted
Subsidiaries has any material contract, agreement, arrangement or understanding
other than on terms no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who are
not Affiliates of the Company, other than fees payable in the ordinary course of
business in connection with servicing accounts receivable and (c) with which
neither the Company or any of its Restricted Subsidiaries has any obligation to
maintain or preserve such Subsidiary's financial condition or cause such
Subsidiary to achieve certain levels of operating results. Any such designation
by the Board of Directors of the Company will be evidenced to the Trustee by
filing with the Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an Officer's
Certificate certifying that such designation complied with the foregoing
conditions.
"Redeemable Notes" means the 7.125% Senior Notes due 2003, the
11.25% Senior Notes due 2005 and the 7.25% Senior Notes due 2006 of the Company
outstanding on the Issue Date.
"Refinance" means, in respect of any Indebtedness, to
refinance, replace, extend, renew, refund, repay, prepay, redeem, purchase,
defease or retire, or to issue other Indebtedness in exchange or replacement
for, such Indebtedness. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances
any Indebtedness of the Company or any Restricted Subsidiary existing on the
Issue Date or Incurred in compliance with this Indenture, including Indebtedness
that Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being Refinanced;
33
(2) such Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is equal to or greater
than the Average Life of the Indebtedness being Refinanced;
(3) such Refinancing Indebtedness has an aggregate
principal amount (or if Incurred with original issue discount, an aggregate
issue price) that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced; and
(4) if the Indebtedness being Refinanced is subordinated
in right of payment to the Securities, such Refinancing Indebtedness is
subordinated in right of payment to the Securities at least to the same extent
as the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary that Refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Refinancing Transactions" means the offering of the
Securities, the entering into of the Credit Agreement and the redemption of the
Redeemable Notes, each as more fully described in the Offering Circular.
"Registration Rights Agreement" means the Registration Rights
Agreement dated July 15, 2003, among the Company, the Subsidiary Guarantors and
the Initial Purchasers.
"Related Business" means any business in which the Company or
any of the Restricted Subsidiaries was engaged on the Issue Date and any
business related, ancillary or complementary to such business.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any
other distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such Person) or
similar
34
payment to the direct or indirect holders of its Capital Stock (other than
dividends or distributions payable solely in its Capital Stock (other than
Disqualified Stock) and dividends or distributions payable solely to the Company
or a Restricted Subsidiary, and other than pro rata dividends or other
distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to
minority stockholders (or owners of an equivalent interest in the case of a
Subsidiary that is an entity other than a corporation));
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company held by any Person or
of any Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including in connection with any
merger or consolidation and including the exercise of any option to exchange any
Capital Stock (other than into Capital Stock of the Company that is not
Disqualified Stock);
(3) the optional purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment of any
Subordinated Obligations of the Company or any Subsidiary Guarantor (other than
the purchase, repurchase, or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation, principal
installment or final maturity, in each case due within one year of the date of
such purchase, repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company
that is not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Subsidiary on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
35
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Secured Parties" means (a) the Trustee, (b) the Notes
Collateral Agent, (c) each Securityholder, (d) the beneficiaries of each
indemnification obligation undertaken by the Company or any Subsidiary Guarantor
under any Security Document and (e) the successors and assigns of each of the
foregoing.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the U.S. Securities Act of 1933, as
amended.
"Security Documents" means the Collateral Agreements, the
Notes Collateral Agency Agreement, the Intercreditor Agreement, the Mortgages,
any agreements pursuant to which assets are added to the Bank Collateral or the
Notes Collateral and any other instruments or documents entered into or
delivered in connection with any of the foregoing, as such agreements,
instruments or documents may from time to time be amended.
"Security Obligations" means (a) the due and punctual payment
by the Company of (i) the Obligations and (ii) all other monetary obligations of
the Company to any Secured Parties, in each case under the Indenture, the
Securities and each of the Security Documents, including obligations to pay
fees, expense reimbursement obligations and indemnification obligations, whether
primary, secondary, direct, contingent, fixed or otherwise (including, monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership, other similar proceeding, regardless of whether allowed or
allowable in such proceeding), (b) the due and punctual performance of all other
obligations of the Company under or pursuant to the Indenture, the Securities
and each of the Security Documents and (c) the due and punctual payment and
performance of all the obligations of each Subsidiary Guarantor under or
pursuant to the Indenture and each of the Security Documents.
"Senior Indebtedness" means with respect to any Person:
36
(1) Indebtedness of such Person, whether outstanding on
the Issue Date or thereafter Incurred; and
(2) all other Obligations of such Person (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person whether or not post-filing interest is
allowed in such proceeding) in respect of Indebtedness described in clause (1)
above,
unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such Indebtedness or other Obligations are subordinate in right of payment
to the Securities or the Subsidiary Guaranty of such Person, as the case may be;
provided, however, that Senior Indebtedness shall not include:
(1) any obligation of such Person to the Company or any
Subsidiary;
(2) any liability for Federal, state, local or other
taxes owed or owing by such Person;
(3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business (including
guarantees thereof or instruments evidencing such liabilities);
(4) any Indebtedness or other Obligation of such Person
which is subordinate or junior in right of payment to any other
Indebtedness or other Obligation of such Person; or
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC as such regulation is in effect
on the Issue Date; provided, however, that a Restricted Subsidiary shall not be
deemed to be a "Significant Subsidiary" solely because the equity of the Company
and its Subsidiaries in the loss of such Restricted Subsidiary from continuing
operations before income taxes, extraordinary items and cumulative effect of a
change in
37
accounting principles exceeds 10 percent of the income of the Company and its
Subsidiaries (calculated on the same basis).
"Specified Asset Sale" means the sale of any assets classified
as discontinued operations on the Issue Date.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
or a Subsidiary Guaranty of such Person, as the case may be, pursuant to a
written agreement to that effect.
"Subsidiary" means, with respect to any Person, any
corporation, association, partnership or other business entity of which more
than 50% of the total voting power of shares of Voting Stock is at the time
owned or controlled, directly or indirectly, by (1) such Person, (2) such Person
and one or more Subsidiaries of such Person or (3) one or more Subsidiaries of
such Person.
"Subsidiary Guarantor" means each Subsidiary of the Company
that executes this Indenture as a guarantor and each other Subsidiary of the
Company that thereafter guarantees the Securities pursuant to the terms of this
Indenture.
"Subsidiary Guaranty" means a Guarantee by a Subsidiary
Guarantor of the Company's obligations with respect to the Securities.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United
States of America or any agency thereof or
38
obligations guaranteed by the United States of America or any agency thereof;
(2) investments in demand and time deposit accounts,
certificates of deposit and money market deposits maturing within 180 days of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any State thereof or
any foreign country recognized by the United States of America, and which bank
or trust company has capital, surplus and undivided profits aggregating in
excess of $50.0 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (1) above
entered into with a bank meeting the qualifications described in clause (2)
above;
(4) investments in commercial paper, maturing not more
than 90 days after the date of acquisition, issued by a corporation (other than
an Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any investment therein is made
of "P-1" (or higher) according to Xxxxx'x Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group; and
(5) investments in securities with maturities of six
months or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A" by
Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service, Inc.
"Term Loan Facility" means (i) the term loan facility
contained in the Credit Agreement and (ii) any other facility or financing
arrangement that Refinances, in whole or in part, the borrowings and commitments
then outstanding or permitted to be outstanding under any such term loan
facility or any other Term Loan Facility.
39
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means Wilmington Trust Company until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform
Commercial Code as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in the manner provided below;
(2) any Subsidiary of the Company that constitutes a
Permitted Joint Venture; and
(3) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or holds any Lien on any property of, the Company or any other
Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so
designated; provided, however, that either (A) the Subsidiary to be so
designated has total assets of $1,000 or less or (B) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.04. The Board of Directors may designate any Unrestricted Subsidiary (other
than a Subsidiary that constitutes a Permitted Joint Venture) to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (A) the Company could Incur $1.00 of additional Indebtedness under
Section 4.03(a) and (B) no Default shall have occurred and be continuing. Any
such designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of
40
the resolution of the Board of Directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign currency
involved in such computation into U.S. dollars at the spot rate for the purchase
of U.S. dollars with the applicable foreign currency as published in The Wall
Street Journal in the "Exchange Rates" column under the heading "Currency
Trading" on the date two Business Days prior to such determination.
Except as described in Section 4.03, whenever it is necessary
to determine whether the Company has complied with any covenant in this
Indenture or a Default has occurred and an amount is expressed in a currency
other than U.S. dollars, such amount will be treated as the U.S. Dollar
Equivalent determined as of the date such amount is initially determined in such
currency.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock
of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Subsidiary" means a Restricted Subsidiary all
the Capital Stock of which (other than directors' qualifying shares) is owned by
the Company or one or more other Wholly Owned Subsidiaries.
SECTION 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"........................... 4.07(a)
41
"Bankruptcy Law".................................. 6.01
"Change of Control Offer"......................... 4.10(b)
"covenant defeasance option"...................... 8.01(b)
"Custodian"....................................... 6.01
"Event of Default"................................ 6.01
"Guaranteed Obligations".......................... 10.01
"Initial Lien".................................... 4.11
"legal defeasance option"......................... 8.01(b)
"Offer"........................................... 4.06(d)
"Offer Amount".................................... 4.06(e)(2)
"Offer Period".................................... 4.06(e)(2)
"Paying Agent".................................... 2.03
"Purchase Date"................................... 4.06(e)(1)
"Registrar"....................................... 2.03
"Released Proceeds"............................... 11.03(e)(ii)
"Successor Company"............................... 5.01(a)(1)
"Trust Moneys".................................... 12.02
SECTION 1.03 Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities and the Subsidiary
Guaranties;
"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 indenture securities means the Company, each
Subsidiary Guarantor and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.04 Rules of Construction. Unless the context
otherwise requires:
42
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in
the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to be
subordinate or junior to secured Indebtedness merely by virtue of its nature as
unsecured Indebtedness;
(7) secured Indebtedness shall not be deemed to be
subordinate to any other secured Indebtedness merely because it has a junior
priority with respect to the same collateral;
(8) the principal amount of any noninterest bearing or
other discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(9) the principal amount of any Preferred Stock shall be
(A) the maximum liquidation value of such Preferred Stock or (B) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(10) all references to the date the Securities were
originally issued shall refer to the date the Initial Securities were originally
issued.
Article 2
The Securities
SECTION 2.01 Form and Dating. Provisions relating to the
Initial Securities, the Private Exchange Securities and the Exchange Securities
are set forth in the Rule 144A/Regulation S Appendix attached hereto (the
"Appendix") which is hereby incorporated in, and expressly made part of, this
Indenture. The Initial Securities and
43
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit 1 to the Appendix which is hereby incorporated in, and expressly made
a part of, this Indenture. The Exchange Securities, the Private Exchange
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in the Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02 Execution and Authentication. Two Officers shall
sign the Securities for the Company by manual or facsimile signature. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually signs the certificate of authentication on the Security.
The signature shall be conclusive evidence that the Security has been
authenticated under this Indenture.
The Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount of $380.0 million of 9.625%
Senior Secured Notes due 2010 upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated. The aggregate principal amount of Securities outstanding at
any time may not exceed $380.0 million except as provided in Section 2.07.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the
44
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 any Registrar, Paying
Agent or agent for service of notices and demands.
SECTION 2.03 Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities 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"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent in connection with the Securities.
SECTION 2.04 Paying Agent To Hold Money in Trust. Prior to
each due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company 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 or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If
45
the Company or a Subsidiary acts as Paying Agent, it shall segregate the money
held by it as Paying Agent and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed by the Paying Agent. Upon complying with
this Section, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
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 Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.06 Transfer and Exchange. The Securities shall be
issued in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met.
SECTION 2.07 Replacement Securities. If a mutilated Security
is surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may
46
charge the Holder for their expenses in replacing a Security.
Every replacement Security is an additional Obligation of the
Company.
SECTION 2.08 Outstanding Securities. Securities outstanding at
any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Securities (or portions thereof) to be redeemed or maturing, as the case
may be, then on and after that date such Securities (or portions thereof) cease
to be outstanding and interest on them ceases to accrue.
SECTION 2.09 Temporary Securities. Until definitive Securities
are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate definitive Securities
and deliver them in exchange for temporary Securities.
SECTION 2.10 Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer,
47
exchange, payment or cancellation and deliver a certificate of such destruction
to the Company unless the Company directs the Trustee to deliver canceled
Securities to the Company. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.11 Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12 CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers.
Article 3
Redemption
SECTION 3.01 Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 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 Company shall give each notice to the Trustee provided for
in this Section at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
48
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02 Selection of Securities to Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee 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 in its sole discretion shall deem to be 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 of them the Trustee selects shall be
in principal amounts of $1,000 or a whole multiple of $1,000. 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 Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03 Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and
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;
(5) if fewer than all the outstanding Securities are to
be redeemed, the identification and principal amounts of the particular
Securities to be redeemed;
49
(6) that, unless the Company defaults in making such
redemption payment, interest on Securities (or portion thereof) called for
redemption ceases to accrue on and after the redemption date; and
(7) 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 Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04 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
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment 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 3.05 Deposit of Redemption Price. Prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary 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 Company to the
Trustee for cancellation.
SECTION 3.06 Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
50
Article 4
Covenants
SECTION 4.01 Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02 SEC Reports. Notwithstanding that the Company may
not be subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC (to the extent the SEC will
accept such filings) and provide the Trustee and Securityholders with such
annual reports and such information, documents and other reports as are
specified in Sections 13 and 15(d) of the Exchange Act and applicable to a U.S.
corporation subject to such Sections, such information, documents and other
reports to be so filed and provided at the times specified for the filing of
such information, documents and reports under such Sections (other than any
information required by Section 3-16 of Regulation S-X promulgated by the SEC).
The Company shall not take any action solely for the purpose of causing the SEC
not to accept any such filing. If, notwithstanding the foregoing, the SEC will
not accept the Company's filings for any reason, the Company shall post the
reports, information and documents referred to in this paragraph on its website
within the time periods that would apply if the Company were required to file
those reports with the SEC.
At any time that any Significant Subsidiaries of the Company
are Unrestricted Subsidiaries, then the quarterly and annual financial
information required by the preceding paragraph will include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations", of the financial
51
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
In addition, the Company shall furnish to the Holder of the
Securities and to prospective investors, upon the requests of such Holders, any
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act so long as the Securities are not freely transferable under the
Securities Act. The Company also shall comply with the other provisions of TIA
Section 314(a).
SECTION 4.03 Limitation on Indebtedness. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company and the
Subsidiary Guarantors shall be entitled to Incur Indebtedness if, on the date of
such Incurrence and after giving effect thereto on a pro forma basis, the
Consolidated Coverage Ratio exceeds 2.25 to 1.
(b) Notwithstanding the foregoing paragraph (a), the
Company and the Restricted Subsidiaries shall be entitled to Incur any or all of
the following Indebtedness:
(1) Indebtedness Incurred by the Company and the
Subsidiary Guarantors pursuant to any Asset Based Facility; provided, however,
that, after giving effect to any such Incurrence, the aggregate principal amount
of all Indebtedness Incurred under this clause (b)(1) and then outstanding does
not exceed the greater of (A) $200.0 million and (B) the sum of (i) 50% of the
book value of the inventory of the Company and its Domestic Restricted
Subsidiaries and (ii) 70% of the book value of the accounts receivable of the
Company and its Domestic Restricted Subsidiaries, determined in each case as of
the end of the most recent month for which internal financial statements are
then available;
(2) Indebtedness Incurred by the Company or any
Subsidiary Guarantor pursuant to any Term Loan Facility; provided, however,
that, after giving effect to any such Incurrence, the aggregate principal amount
of all Indebtedness Incurred under this clause (2) and then outstanding does not
exceed $65.0 million less the sum of all principal payments actually made from
time to time after the Issue Date with respect to such Indebtedness
52
(other than principal payments made from Refinancings thereof that are treated
as Indebtedness Incurred pursuant to this clause (2));
(3) Indebtedness owed to and held by the Company or a
Restricted Subsidiary; provided, however, that (A) any subsequent issuance or
transfer of any Capital Stock which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or a Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such Indebtedness by the
obligor thereon, (B) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash of
all obligations with respect to the Securities and (C) if a Subsidiary Guarantor
is the obligor on such Indebtedness, such Indebtedness is expressly subordinated
to the prior payment in full in cash of all obligations of such obligor with
respect to its Subsidiary Guaranty;
(4) the Securities;
(5) Indebtedness outstanding on the Issue Date (other
than Indebtedness described in clause (1), (2), (3) or (4) of this Section
4.03(b)), including the Redeemable Notes;
(6) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary was acquired by the
Company (other than Indebtedness Incurred in connection with, or to provide all
or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Subsidiary
became a Subsidiary or was acquired by the Company); provided, however, that on
the date of such acquisition and after giving pro forma effect thereto, the
Company would have been able to Incur at least $1.00 of additional Indebtedness
pursuant to Section 4.03(a);
(7) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 4.03(a) or pursuant to clause (4), (5) (other than
the Redeemable Notes) or (6) of this Section 4.03(b) or this clause (7);
provided, however, that to the extent such Refinancing Indebtedness directly or
indirectly Refinances Indebtedness of a Subsidiary (other than a Subsidiary
Guarantor)
53
Incurred pursuant to clause (6), such Refinancing Indebtedness shall be Incurred
only by such Subsidiary;
(8) Hedging Obligations consisting of (i) Interest Rate
Agreements directly related to Indebtedness permitted to be Incurred by the
Company and the Restricted Subsidiaries pursuant to this Indenture or (ii)
Currency Agreements directly related to the foreign exchange exposure of the
Company and the Restricted Subsidiaries;
(9) obligations in respect of performance, bid and surety
bonds and completion guarantees provided by the Company or any Restricted
Subsidiary in the ordinary course of business;
(10) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business; provided,
however, that such Indebtedness is extinguished within two Business Days of its
Incurrence;
(11) Indebtedness consisting of the Subsidiary Guaranty of
a Subsidiary Guarantor and any Guarantee by a Subsidiary Guarantor of
Indebtedness Incurred pursuant to Section 4.03(a) or pursuant to clause (1),
(2), (3), (4) or (5) of this Section 4.03(b) or pursuant to clause (7) of the
Section 4.03(b) to the extent the Refinancing Indebtedness Incurred thereunder
directly or indirectly Refinances Indebtedness Incurred pursuant to Section
4.03(a) or pursuant to clause (4) or (5) of this Section 4.03(b);
(12) Indebtedness Incurred by a Receivables Subsidiary
pursuant to a Qualified Receivables Transaction;
(13) Indebtedness Incurred by a Foreign Subsidiary solely
for the working capital purposes of such Foreign Subsidiary or any of its
Subsidiaries; and
(14) Indebtedness of the Company or any of its Restricted
Subsidiaries in an aggregate principal amount which, when taken together with
all other Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the date of such Incurrence (other than Indebtedness permitted by
clauses (1) through (13) above or Section 4.03(a)) does not exceed $25.0
million.
54
(c) Notwithstanding the foregoing, neither the Company
nor any Subsidiary Guarantor shall Incur any Indebtedness pursuant to Section
4.03(b) if the proceeds thereof are used, directly or indirectly, to Refinance
any Subordinated Obligations of the Company or any Subsidiary Guarantor unless
either (i) such Indebtedness shall be subordinated to the Securities or to the
applicable Subsidiary Guaranty to at least the same extent as such Subordinated
Obligations or (ii) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement of such Subordinated Obligations in connection with
such Refinancing is treated as a Restricted Payment made pursuant to Section
4.04(a).
(d) For purposes of determining compliance with this
Section 4.03:
(1) any Indebtedness remaining outstanding under the
Credit Agreement after the application of the net proceeds from the sale of the
Securities will be initially treated as Incurred on the Issue Date under clauses
(1) and (2) of paragraph (b) above;
(2) in the event that an item of Indebtedness (or any
portion thereof) meets the criteria of more than one of the types of
Indebtedness described herein, the Company, in its sole discretion, shall
classify such item of Indebtedness (or any portion thereof) at the time of
Incurrence and shall only be required to include the amount and type of such
Indebtedness in one of the above clauses;
(3) the Company shall be entitled to divide and classify
an item of Indebtedness in more than one of the types of Indebtedness described
herein; and
(4) following the date of its Incurrence, any
Indebtedness originally classified as Incurred pursuant to one of the clauses in
Section 4.03(b) (other than pursuant to clause (1), (2), (4) or (5) of Section
4.03(b)) may later be reclassified by the Company such that it will be deemed as
having been Incurred pursuant to paragraph (a) or another clause in Section
4.03(b), as applicable, to the extent that such reclassified Indebtedness could
be Incurred pursuant to such new clause at the time of such reclassification.
(e) For purposes of determining compliance with any U.S.
dollar, pound sterling or euro-denominated
55
restriction on the Incurrence of Indebtedness where the Indebtedness Incurred is
denominated in a different currency, the amount of such Indebtedness shall be
the U.S. Dollar Equivalent, Pound Sterling Equivalent or Euro Equivalent, as the
case may be, determined on the date of the Incurrence of such Indebtedness;
provided, however, that if any such Indebtedness denominated in a different
currency is subject to a Currency Agreement with respect to U.S. dollars, pound
sterling or euros, as the case may be, covering all principal, premium, if any,
and interest payable on such Indebtedness, the amount of such Indebtedness
expressed in U.S. dollars, pound sterling or euros shall be as provided in such
Currency Agreement. The principal amount of any Refinancing Indebtedness
Incurred in the same currency as the Indebtedness being Refinanced shall be the
Euro Equivalent, Pound Sterling Equivalent or U.S. Dollar Equivalent, as
appropriate, of the Indebtedness Refinanced, except to the extent that (1) such
U.S. Dollar Equivalent, Pound Sterling Equivalent or Euro Equivalent was
determined based on a Currency Agreement, in which case the Refinancing
Indebtedness shall be determined in accordance with the preceding sentence, and
(2) the principal amount of the Refinancing Indebtedness exceeds the principal
amount of the Indebtedness being Refinanced, in which case the U.S. Dollar
Equivalent, Pound Sterling Equivalent or Euro Equivalent of such excess, as
appropriate, shall be determined on the date such Refinancing Indebtedness is
Incurred.
SECTION 4.04 Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) the Company is not entitled to Incur an additional
$1.00 of Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and
all other Restricted Payments since the Issue Date would exceed the sum of
(without duplication):
(A) 50% of the Consolidated Net Income accrued
during the period (treated as one accounting period) from July
1, 2003, to the end
56
of the most recent fiscal quarter ending at least 45 days
prior to the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such
deficit); plus
(B) 100% of the aggregate Net Cash Proceeds
received by the Company from the issuance or sale of its
Capital Stock (other than Disqualified Stock) subsequent to
the Issue Date (other than an issuance or sale to a Subsidiary
of the Company and other than an issuance or sale to an
employee stock ownership plan or to a trust established by the
Company or any of its Subsidiaries for the benefit of their
employees) and 100% of any cash capital contribution received
by the Company from its shareholders subsequent to the Issue
Date; plus
(C) the amount by which Indebtedness of the
Company is reduced on the Company's balance sheet upon the
conversion or exchange subsequent to the Issue Date of any
Indebtedness of the Company convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company
(less the amount of any cash, or the fair value of any other
property, distributed by the Company upon such conversion or
exchange) provided, however, that the foregoing amount shall
not exceed the Net Cash Proceeds received by the Company or
any Restricted Subsidiary from the sale of such Indebtedness
(excluding Net Cash Proceeds from sales to a Subsidiary of the
Company or to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the
benefit of their employees); plus
(D) an amount equal to the sum of (i) the cash
return on any Investments (other than Permitted Investments)
made by the Company or any Restricted Subsidiary in any Person
resulting from repurchases, repayments or redemptions of such
Investments by such Person, proceeds realized on the sale of
such Investment and proceeds representing the return of
capital (excluding dividends and distributions), in each case
received by the Company or any Restricted
57
Subsidiary and (ii) to the extent such Person is an
Unrestricted Subsidiary, the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Unrestricted Subsidiary
at the time such Unrestricted Subsidiary is designated a
Restricted Subsidiary; provided, however, that the foregoing
sum shall not exceed, in the case of any such Person or
Unrestricted Subsidiary, the amount of Investments (excluding
Permitted Investments) previously made (and treated as a
Restricted Payment) by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash
Proceeds of the substantially concurrent sale of, or made by exchange for,
Capital Stock of the Company (other than Disqualified Stock and other than
Capital Stock issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) or a substantially concurrent
cash capital contribution received by the Company from its shareholders;
provided, however, that (A) such Restricted Payment shall be excluded in the
calculation of the amount of Restricted Payments and (B) the Net Cash Proceeds
from such sale or such cash capital contribution (to the extent so used for such
Restricted Payment) shall be excluded from the calculation of amounts under
Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Subordinated Obligations of the
Company or any Subsidiary Guarantor made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Subordinated Indebtedness of the
Company or any Subsidiary Guarantor which is permitted to be Incurred pursuant
to Section 4.03; provided, however, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such
58
dividend would have complied with this Section 4.04; provided, however, that at
the time of payment of such dividend, no other Default shall have occurred and
be continuing (or result therefrom); provided further, however, that such
dividend shall be included in the calculation of the amount of Restricted
Payments;
(4) so long as no Default has occurred and is continuing
the repurchase or other acquisition of shares of Capital Stock of the Company or
any of its Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted transferees of
such employees, former employees, directors or former directors), pursuant to
the terms of the agreements (including employment agreements) or plans (or
amendments thereto) approved by the Board of Directors under which such
individuals purchase or sell or are granted the option to purchase or sell,
shares of such Capital Stock; provided, however, that the aggregate amount of
such repurchases and other acquisitions shall not exceed $1.0 million in any
calendar year; provided further, however, that such repurchases and other
acquisitions shall be excluded in the calculation of the amount of Restricted
Payments;
(5) dividends paid in respect of Disqualified Stock of
the Company or any Restricted Subsidiary which is permitted to be issued
pursuant Section 4.03; provided, however, that at the time of payment of such
dividend, no Default shall have occurred and be continuing (or result
therefrom); provided further, however, that such dividends shall be excluded in
the calculation of the amount of Restricted Payments; and
(6) Restricted Payments in an amount which, when taken
together with all Restricted Payments made pursuant to this Section 4.04(b)(6),
does not exceed $2.5 million; provided, however, that for purposes of
calculating the aggregate amount of Restricted Payments that have been made
pursuant to this Section 4.04(b)(6) as of any date, such amount shall be reduced
by an amount equal to the sum of (i) the cash return on any Investments made by
the Company or any Restricted Subsidiary in any Person (and treated as a
Restricted Payment made pursuant to this Section 4.04(b)(6)) resulting from
repurchases, repayments or redemptions of such Investments by such Person,
proceeds realized on the sale of such Investment and proceeds representing the
return of capital (excluding dividends and
59
distributions), in each case received by the Company or any Restricted
Subsidiary, and (ii) to the extent such Person is an Unrestricted Subsidiary,
the portion (proportionate to the Company's equity interest in such Unrestricted
Subsidiary) of the fair market value of the net assets of such Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary, provided that the foregoing sum shall not exceed, in the case of any
such Person or Unrestricted Subsidiary, the amount of Investments previously
made and treated as Restricted Payments pursuant to this Section 4.04(b)(6) by
the Company or any Restricted Subsidiary in such Person or Unrestricted
Subsidiary; provided further, however, that Restricted Payments made pursuant to
this Section 4.04(b)(6) shall be included in the calculation of the amount of
Restricted Payments.
SECTION 4.05 Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company shall not, and shall not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c),
(A) any encumbrance or restriction pursuant to
an agreement in effect at or entered into on the Issue Date
(including the Credit Agreement as in effect on the Issue
Date);
(B) any encumbrance or restriction with respect
to a Restricted Subsidiary pursuant to an agreement relating
to any Indebtedness Incurred or Capital Stock issued by such
Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Company (other than
Indebtedness Incurred as consideration in, or to provide all
or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a
Restricted
60
Subsidiary or was acquired by the Company) and outstanding on
such date;
(C) any encumbrance or restriction pursuant to
an agreement effecting a Refinancing of Indebtedness Incurred
pursuant to an agreement referred to in Section 4.05(1)(A) or
(B) or this clause (C) or contained in any amendment to an
agreement referred to in Section 4.05(1)(A) or (B) or this
clause (C); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary
contained in any such refinancing agreement or amendment are
not materially more restrictive, taken as a whole, than the
encumbrances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements;
(D) any encumbrance or restriction with respect
to a Restricted Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or
disposition;
(E) any encumbrance or restriction on cash or
other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business;
(F) any encumbrance or restriction pursuant to
applicable law, regulation or order;
(G) any customary encumbrance or restriction
pursuant to the terms of any joint venture or similar
agreement entered into in the ordinary course of business;
(H) any encumbrance or restriction pursuant to
the terms of any agreement entered into in connection with any
Qualified Receivables Transaction; provided, however, that
such encumbrance or restriction applies only to a Receivables
Subsidiary;
(I) any customary (as conclusively determined in
good faith by the Chief Financial
61
Officer of the Company) encumbrance or restriction with
respect to a Foreign Subsidiary pursuant to the terms of any
Indebtedness Incurred pursuant to Sections 4.03(b)(13) or
(14); provided, however, that either (x) such encumbrance or
restriction permits the distribution of funds to the Company
in an amount sufficient for the Company to make the timely
payment of interest, premium (if any) and principal (whether
at stated maturity, by way of a sinking fund applicable
thereto, by way of any mandatory redemption, defeasance,
retirement or repurchase thereof, including upon the
occurrence of designated events or circumstances or by virtue
of acceleration upon an event of default, or by way of
redemption or retirement at the option of the holders or
lenders of such Indebtedness, including pursuant to offers to
purchase) according to the terms of this Indenture and the
Securities and any other Indebtedness that is an obligation of
the Company; provided, however, that such agreement may
nevertheless contain customary (as so determined) net worth,
leverage, invested capital and other financial covenants,
customary (as so determined) covenants regarding the merger of
or sale of all or any substantial part of the assets of the
Company or any Restricted Subsidiary and restrictions on
transactions with affiliates and customary (as so determined)
subordination provisions governing Indebtedness owed to the
Company or any of its Restricted Subsidiaries; or (y) the
Company determines (as evidenced by an Officers' Certificate
executed by the Chief Executive Officer and Chief Financial
Officer of the Company) that at the time any such Indebtedness
is Incurred (and at the time of any modification of the terms
of any such encumbrance or restriction) that such encumbrance
or restriction is not reasonably expected to materially affect
the Company's ability to make timely payments of interest,
premium (if any) and principal (in any manner described in
clause (x) above) in respect of the Securities and any other
Indebtedness that is an obligation of the Company; and
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(2) with respect to clause (c) only,
(A) any encumbrance or restriction consisting of
customary nonassignment provisions in leases governing
leasehold interests to the extent such provisions restrict the
transfer of the lease or the property leased thereunder; and
(B) any encumbrance or restriction contained in
security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or
restriction restricts the transfer of the property subject to
such security agreements or mortgages.
SECTION 4.06 Limitation on Sales of Assets and Subsidiary
Stock. (a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, consummate any Asset Disposition of any Notes
Collateral unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors, of the shares and assets
subject to such Asset Disposition;
(2) except to the extent the Company or a Restricted
Subsidiary receives Additional Assets in exchange for such Asset Disposition
(other than Additional Assets that would not be added to the Notes Collateral as
a result of the proviso contained in Section 4.06(a)(3)(i)), at least 75% of the
consideration thereof received by the Company or such Restricted Subsidiary is
in the form of cash or cash equivalents; provided, however, that the terms of
this Section 4.06(a)(2) shall not apply to any Specified Asset Sale;
(3) (i) to the extent that the Additional Assets received
by the Company and its Restricted Subsidiaries in such Asset Disposition qualify
as "Additional Assets" pursuant to clause (1) of the definition thereof, such
Additional Assets are concurrently with their acquisition added to the Notes
Collateral securing the Securities; provided, however, that Additional Assets
that qualify as "Additional Assets" pursuant to clause (1)(B) of the definition
thereof shall only be added to the Notes
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Collateral pursuant to this clause (i) to the extent the terms of the
Intercreditor Agreement are amended, modified or terminated to permit the
addition of such Additional Assets to the Notes Collateral; and (ii) to the
extent that the Additional Assets received by the Company and its Restricted
Subsidiaries in such Asset Disposition constitute the Capital Stock of any
Person, assets of such Person that qualify as "Additional Assets" pursuant to
clause (1) of the definition thereof (excluding Additional Assets that qualify
as "Additional Assets" pursuant to clause (1)(B) of the definition thereof
unless and until the terms of the Intercreditor Agreement are amended, modified
or terminated to permit the addition of such Additional Assets to the Notes
Collateral) with a Fair Market Value that is equal to or greater than the Fair
Market Value of the Notes Collateral that is the subject of such Asset
Disposition are concurrently with the acquisition added to the Notes Collateral
securing the Securities; and
(4) an amount equal to 100% of the Net Available Cash
from such Asset Disposition is paid directly by the purchaser thereof to the
Notes Collateral Agent to be held in trust and applied by the Company (or such
Restricted Subsidiary, as the case may be) at the Company's election either:
(A) to acquire Additional Assets (other than
Additional Assets that would not be added to the Notes
Collateral pursuant to clause (i) of the following proviso)
(or to reimburse the Company for customary out-of-pocket costs
incurred by the Company and directly related to such
acquisition), which Additional Assets are concurrently with
their acquisition added to the Notes Collateral securing the
Securities; provided, however, that (i) to the extent that the
Additional Assets acquired by the Company and its Restricted
Subsidiaries in such Asset Disposition qualify as "Additional
Assets" pursuant to clause (1) of the definition thereof, such
Additional Assets are concurrently with their acquisition
added to the Notes Collateral securing the Securities
(provided that Additional Assets that qualify as "Additional
Assets" pursuant to clause (1)(B) of the definition thereof
shall only be added to the Notes
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Collateral pursuant to this clause (i) to the extent the terms
of the Intercreditor Agreement are amended, modified or
terminated to permit the addition of such Additional Assets to
the Notes Collateral) and (ii) to the extent that the
Additional Assets acquired by the Company and its Restricted
Subsidiaries in such Asset Disposition constitute the Capital
Stock of any Person, assets of such Person that qualify as
"Additional Assets" pursuant to clause (1) of the definition
thereof (excluding Additional Assets that qualify as
"Additional Assets" pursuant to clause (1)(B) of the
definition thereof unless and until the terms of the
Intercreditor Agreement are amended, modified or terminated to
permit the addition of such Additional Assets to the Notes
Collateral) with a Fair Market Value that is equal to or
greater than the Net Available Proceeds received by the
Company or any of its Restricted Subsidiaries in respect of
the Notes Collateral that is the subject of such Asset
Disposition are concurrently with the acquisition added to the
Notes Collateral securing the Securities, or
(B) to make an offer to the holders of the
Securities (and if applicable holders of any Pari Passu Debt)
to purchase Securities (and such Pari Passu Debt) pursuant to
and subject to the conditions contained in the Indenture,
in each case within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash; provided, however, that
in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (B) above, the Company or such Restricted Subsidiary shall
permanently retire such Indebtedness and shall cause the related loan commitment
(if any) to be permanently reduced in an amount equal to the principal amount so
prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section
4.06(a), the Company and the Restricted Subsidiaries will not be required to
apply any Net Available Cash in accordance with this Section 4.06(a), except to
the extent that the aggregate Net Available Cash from all Asset Dispositions of
Notes Collateral which is not applied in accordance with this Section 4.06(a)
exceeds $7.5 million.
65
(b) The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, consummate any Asset
Disposition (other than an Asset Disposition of Notes Collateral) unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration), as
determined in good faith by the Board of Directors, of the shares and assets
subject to such Asset Disposition;
(2) except to the extent the Company or a Restricted
Subsidiary receives Additional Assets in exchange for such Asset Disposition, at
least 75% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents; provided,
however, that the terms of this Section 4.06(b)(2) shall not apply to any
Specified Asset Sale; and
(3) an amount equal to 100% of the Net Available Cash
from such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be):
(A) first, to the extent the Company elects (or
is required by the terms of any Indebtedness), to prepay,
repay, redeem or purchase Senior Indebtedness of the Company
or Indebtedness (other than any Disqualified Stock) of a
Restricted Subsidiary (in each case other than Indebtedness
owed to the Company or an Affiliate of the Company) within one
year from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash;
(B) second, to the extent of the balance of such
Net Available Cash after application in accordance with clause
(A), to the extent the Company elects, to acquire Additional
Assets within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash
(or to reimburse the Company for customary out-of-pocket costs
incurred by the Company and directly related to such
acquisition); and
66
(C) third, to the extent of the balance of such
Net Available Cash after application in accordance with
clauses (A) and (B), to make an offer to the holders of the
Securities (and to holders of other Senior Indebtedness of the
Company designated by the Company) to purchase securities (and
such other Senior Indebtedness of the Company) pursuant to and
subject to the conditions contained in Section 4.06(d);
provided, however, that in connection with any prepayment,
repayment or purchase of Indebtedness pursuant to clause (A)
or (C) above, the Company or such Restricted Subsidiary shall
permanently retire such Indebtedness and shall cause the
related loan commitment (if any) to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or
purchased.
Notwithstanding the foregoing provisions of this Section
4.06(b), the Company and the Restricted Subsidiaries shall not be required to
apply any Net Available Cash in accordance with this Section 4.06(b) except to
the extent that the aggregate Net Available Cash from all Asset Dispositions
subject to this Section 4.06(b) which is not applied in accordance with this
paragraph Section 4.06(b) exceeds $7.5 million. Pending application of Net
Available Cash pursuant to this Section 4.06, such Net Available Cash may be
applied to temporarily reduce revolving credit indebtedness or invested in any
manner that is not prohibited by this Indenture.
(c) For the purposes of this Section 4.06, the following
are deemed to be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company (other
than obligations in respect of Disqualified Stock of the Company) or any
Restricted Subsidiary (other than obligations in respect of Disqualified Stock
or Preferred Stock of a Subsidiary Guarantor) and the release of the Company or
such Restricted Subsidiary from all liability on such Indebtedness in connection
with such Asset Disposition; and
(2) securities received by the Company or any Restricted
Subsidiary from the transferee that are promptly converted by the Company or
such Restricted Subsidiary into cash, to the extent of cash received in that
conversion.
67
(d) In the event of an Asset Disposition that results in
an offer to purchase Securities (and any other Indebtedness of the Company)
pursuant to Section (a)(4)(B) or (b)(3)(C) above, the Company shall purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Indebtedness) the ("Offer") at a purchase price of 100% of their
principal amount (or, in the event such other Indebtedness of the Company was
issued with significant original issue discount, 100% of the accreted value
thereof) without premium, plus accrued but unpaid interest (or, in respect of
such other Indebtedness of the Company, such lesser price, if any, as may be
provided for by the terms of such Indebtedness) in accordance with the
procedures (including prorating in the event of oversubscription) set forth in
Section 4.06(e). In each case, if the aggregate purchase price of the securities
tendered pursuant to the Offer exceeds the Net Available Cash allotted to their
purchase, the Company shall select the securities to be purchased on a pro rata
basis but in round denominations, which in the case of the Securities will be
denominations of $1,000 principal amount or multiples thereof. If any Net
Available Cash remains after the completion of any such offer to purchase, the
Company may use such Net Available Cash for any purpose not otherwise prohibited
by the Indenture. Upon completion of any such Offer, Net Available Cash will be
deemed to be reduced by the aggregate amount of such Offer.
(e) (1) Promptly, and in any event within 10 days after
the Company becomes obligated to make an Offer, the Company shall deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Securities purchased by the Company either
in whole or in part (subject to prorating as described in Section 4.06(d) in the
event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The notice shall specify a purchase
date not less than 30 days nor more than 60 days after the date of such notice
(the "Purchase Date") and shall contain or incorporate by reference such
information concerning the business of the Company which the Company in good
faith believes will enable such Holders to make an informed decision (which at a
minimum will include (A) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company, the most
recent subsequently filed Quarterly Report on
68
Form 10-Q and any Current Report on Form 8-K of the Company filed subsequent to
such Quarterly Report, other than Current Reports describing Asset Dispositions
otherwise described in the offering materials (or corresponding successor
reports), (B) a description of material developments in the Company's business
subsequent to the date of the latest of such Reports, and (C) if material,
appropriate pro forma financial information) and all instructions and materials
necessary to tender Securities pursuant to the Offer, together with the
information contained in clause (3).
(2) Not later than the date upon which written notice of
an Offer is delivered to the Trustee as provided below, the Company shall
deliver to the Trustee an Officers' Certificate as to (A) the amount of the
Offer (the "Offer Amount"), including information as to any other Senior
Indebtedness included in the Offer, (B) the allocation of the Net Available Cash
from the Asset Dispositions pursuant to which such Offer is being made and (C)
the compliance of such allocation with the provisions of Section 4.06(a), (b)
and (d). On or prior to the last day prior to the Purchase Date, the Company
shall also irrevocably deposit with the Trustee or with a Paying Agent (or, if
the Company is acting as its own Paying Agent, segregate and hold in trust) in
Temporary Cash Investments, maturing on the last day prior to the Purchase Date
or on the Purchase Date if funds are immediately available by open of business,
an amount equal to the Offer Amount to be held for payment in accordance with
the provisions of this Section; provided, however, that such amount shall be
reduced by the amount of any Trust Moneys held at such time by the Trustee (net
of any amounts payable to the Trustee pursuant to Section 7.07) that the Company
instructs the Trustee to use for payment in accordance with this Section. If the
Offer includes other Senior Indebtedness, the deposit described in the preceding
sentence may be made with any other paying agent pursuant to arrangements
satisfactory to the Trustee. Upon the expiration of the period for which the
Offer remains open (the "Offer Period"), the Company shall deliver to the
Trustee for cancellation the Securities or portions thereof which have been
properly tendered to and are to be accepted by the Company. The Trustee shall,
on the Purchase Date, mail or deliver payment (or cause the delivery of payment)
to each tendering Holder in the amount of the purchase price. In the event that
the aggregate purchase price of the
69
Securities delivered by the Company to the Trustee is less than the Offer Amount
applicable to the Securities, the Trustee shall deliver the excess to the
Company immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.
(3) Holders electing to have a Security purchased shall
be required to surrender the Security, with an appropriate form duly completed,
to the Company at the address specified in the notice not later than the close
of business on the third Business Days prior to the Purchase Date. Holders shall
be entitled to withdraw their election if the Trustee or the Company receives
not later than the close of business on the third Business Day prior to the
Purchase Date, a telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. Holders whose Securities are purchased
only in part shall be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the
Trustee which are to be accepted for purchase, the Company shall also deliver an
Officers' Certificate stating that such Securities are to be accepted by the
Company pursuant to and in accordance with the terms of this Section. A Security
shall be deemed to have been accepted for purchase at the time the Trustee,
directly or through an agent, mails or delivers payment therefor to the
surrendering Holder.
(f) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Securities
pursuant to this Section 4.06. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.06,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.06 by
virtue of its compliance with such securities laws or regulations.
SECTION 4.07 Limitation on Affiliate Transactions. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit
70
to exist any transaction (including the purchase, sale, lease or exchange of any
property, employee compensation arrangements or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company (an "Affiliate
Transaction") unless:
(1) the terms of the Affiliate Transaction are no less
favorable to the Company or such Restricted Subsidiary than those that could be
obtained at the time of the Affiliate Transaction in arm's-length dealings with
a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in
excess of $1.0 million, the terms of the Affiliate Transaction are set forth in
writing and a majority of the non-employee directors of the Company
disinterested with respect to such Affiliate Transaction have determined in good
faith that the criteria set forth in clause (1) are satisfied and have approved
the relevant Affiliate Transaction as evidenced by a resolution of the Board of
Directors; and
(3) if such Affiliate Transaction involves an amount in
excess of $5.0 million, the Board of Directors shall also have received a
written opinion from an Independent Qualified Party to the effect that such
Affiliate Transaction is fair, from a financial standpoint, to the Company and
its Restricted Subsidiaries or is not less favorable to the Company and its
Restricted Subsidiaries than could reasonably be expected to be obtained at the
time in an arm's-length transaction with a Person who was not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit;
(1) any Investment (other than a Permitted Investment) or
other Restricted Payment, in each case permitted to be made pursuant to Section
4.04;
(2) any issuance of securities, or other payments, awards
or grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, indemnification or similar arrangements, stock options
and stock ownership plans approved by the Board of Directors;
(3) loans or advances to employees in the ordinary course
of business in accordance with the past
71
practices of the Company or its Restricted Subsidiaries, but in any event not to
exceed $1.0 million in the aggregate outstanding at any one time;
(4) the payment of reasonable fees to directors of the
Company and its Restricted Subsidiaries who are not employees of the Company or
its Restricted Subsidiaries;
(5) any transaction with a Restricted Subsidiary or joint
venture or similar entity which would constitute an Affiliate Transaction solely
because the Company or a Restricted Subsidiary owns an equity interest in or
otherwise controls such Restricted Subsidiary, joint venture or similar entity;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
(7) any transaction with a Receivables Subsidiary
pursuant to a Qualified Receivables Transaction; and
(8) any agreement as in effect on the Issue Date or any
amendment or modification of any such agreement; provided, however, that the
terms of such agreement following any such amendment or modification are no less
favorable to the Company than the terms contained in such agreement prior to
such amendment or modification.
SECTION 4.08 Limitation on Line of Business. The Company shall
not, and shall not permit any Restricted Subsidiary, to engage in any business
other than a Related Business.
SECTION 4.09 Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries. The Company:
(1) shall not, and shall not permit any Restricted
Subsidiary to, sell, lease, transfer or otherwise dispose of any Capital Stock
of any Restricted Subsidiary to any Person (other than the Company or a Wholly
Owned Subsidiary), and
(2) shall not permit any Restricted Subsidiary to issue
any of its Capital Stock (other than if necessary, shares of its Capital Stock
constituting directors' or other legally required qualifying shares) to any
Person
72
(other than to the Company or a Wholly Owned Subsidiary) unless,
(A) immediately after giving effect to such
issuance, sale or other disposition, neither the Company nor
any of its Subsidiaries own any Capital Stock of such
Restricted Subsidiary; or
(B) immediately after giving effect to such
issuance, sale or other disposition, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person remaining after giving
effect thereto is treated as a new Investment by the Company
and such Investment would be permitted to be made under
Section 4.04 if made on the date of such issuance, sale or
other disposition.
SECTION 4.10 Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
repurchase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof on the date of purchase plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), in accordance with the terms contemplated in Section
4.10(b).
(b) Within 30 days following any Change of Control, the
Company shall mail a notice to each Holder with a copy to the Trustee (the
"Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such Holder's Securities
at a purchase price in cash equal to 101% of the principal amount thereof on the
date of purchase, plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record date
to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such
Change of Control (including information with respect to pro forma historical
income, cash flow and capitalization, in each case after giving effect to such
Change of Control);
73
(3) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company,
consistent with this Section 4.10, that a Holder must follow in order to have
its Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice not later than the close of
business on the third Business Day prior to the purchase date. Holders will be
entitled to withdraw their election if the Trustee or the Company receives not
later than the close of business on the third Business Day prior to the purchase
date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this
Section, the Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in this Section applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
(f) The Company shall comply, to the extent applicable,
with the requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the repurchase of Securities
pursuant to this Section 4.10. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Section 4.10,
the Company shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this
74
Section 4.10 by virtue of its compliance with such securities laws or
regulations.
SECTION 4.11 Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, Incur or
permit to exist any Lien (the "Initial Lien") of any nature whatsoever on any of
its properties (including Capital Stock of a Restricted Subsidiary), whether
owned at the Issue Date or thereafter acquired securing any Indebtedness, other
than Permitted Liens, without effectively providing that the Securities shall be
secured equally and ratably with (or prior to) the obligations so secured for so
long as such obligations are so secured. Any Lien created for the benefit of the
Holders of the Securities pursuant to the foregoing sentence shall provide by
its terms that such Lien shall be automatically and unconditionally released and
discharged upon the release and discharge of the Initial Lien.
SECTION 4.12 Limitation on Sale/Leaseback Transactions. The
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
any Sale/Leaseback Transaction with respect to any property unless (a) the
Company or such Restricted Subsidiary would be entitled to (1) Incur
Indebtedness in an amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 4.03 and (2) create a Lien on
such property securing such Attributable Debt without equally and ratably
securing the Securities pursuant to Section 4.11, (b) the net proceeds received
by the Company or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair market value (as
determined by the Board of Directors) of such property and (c) the Company
applies the proceeds of such transaction in compliance with Section 4.06.
SECTION 4.13 Future Guarantors. The Company shall cause each
Domestic Restricted Subsidiary (other than a Subsidiary Guarantor) that Incurs
any Indebtedness to, and each Foreign Subsidiary that enters into a Guarantee of
any Senior Indebtedness (other than a Foreign Subsidiary that Guarantees Senior
Indebtedness Incurred by another Foreign Subsidiary) to, in each case, at the
same time, execute and deliver to the Trustee a Guaranty Agreement pursuant to
which such Restricted Subsidiary will Guarantee payment of the Securities on the
same terms and conditions as those set forth this Indenture and, to the extent
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necessary, Security Documents (including joinder agreements with respect to
existing Security Documents).
Within 10 days of a Domestic Restricted Subsidiary becoming a
Guarantor pursuant to this Section 4.13, the Company shall cause such Domestic
Restricted Subsidiary to execute and deliver any and all further Security
Documents, financing statements, agreements and instruments to grant the Notes
Collateral Agent a Lien upon the assets and property of such Domestic Subsidiary
that constitute Notes Collateral (on a first priority basis, subject to
Permitted Liens) and Bank Collateral (on a second priority basis, subject to
Permitted Liens) for the benefit of the Holders and take all such actions
(including the filing and recording of financing statements, fixture filings,
Mortgages and other documents) that may be required under any applicable law, or
which the Trustee or the Notes Collateral Agent may reasonably request to create
such Lien, all at the expense of the Company, including all reasonable fees and
expenses of counsel incurred by the Notes Collateral Agent or the Trustee in
connection therewith.
SECTION 4.14 Impairment of Security Interest. The Company
shall not, and the Company shall not permit any of its Restricted Subsidiaries
to, take or knowingly or negligently omit to take, any action which action or
omission might or would have the result of materially impairing the security
interest with respect to the Collateral for the benefit of the Trustee and the
holders of the Securities; provided, however, that the taking of any action with
respect to the Collateral that is not prohibited by the terms of this Indenture
will not be deemed to impair such security interest. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, grant to any Person
(other than the Notes Collateral Agent, for the benefit of the Trustee, the
holders of the Securities, any Pari Passu Debt Representative and holders of any
Pari Passu Debt), any interest whatsoever in any of the Notes Collateral other
than a junior security interest for the benefit of the Lenders Debt as
contemplated by the Security Documents.
SECTION 4.15 Amendment to Security Documents. The Company
shall not amend, modify or supplement, or permit or consent to any amendment,
modification or supplement of, the Security Documents in any way that would
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be adverse to the holders of the Securities in any material respect, except as
permitted under Article 9.
SECTION 4.16 Material After-Acquired Property. Upon the
acquisition by the Company or any Restricted Subsidiary of any Material
After-Acquired Property, the Company or such Restricted Subsidiary shall execute
and deliver such mortgages, deeds of trust, security instruments, financing
statements and certificates and opinions of counsel as shall be reasonably
necessary to vest in the Notes Collateral Agent a perfected security interest,
subject only to Permitted Liens, in such Material After-Acquired Property and to
have such Material After-Acquired Property added to the Notes Collateral, and
thereupon all provisions of this Indenture relating to the Notes Collateral
shall be deemed to relate to such Material After-Acquired Property to the same
extent and with the same force and effect. The Company shall provide each such
mortgage, deed of trust, security instrument, financing statement and
certificate at its own expense and shall pay all reasonable fees and expenses of
counsel incurred by the Trustee or the Notes Collateral Agent in connection with
each of the foregoing.
SECTION 4.17 Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA Section 314(a)(4).
SECTION 4.18 Further Instruments and Acts. Upon request of
the Trustee or Notes Collateral Agent, the Company will, and will cause each
Restricted Subsidiary to, execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture, including the execution of any and
all further documents, financing statements, agreements and instruments, and the
taking of all such further actions (including the filing and recording of
financing statements, fixture filings, mortgages, deeds of trust and other
documents), which may be required under any applicable law, to maintain the
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perfection and priority of the Liens created or intended to be created by the
Security Documents, all at the expense of the Company. The Company also agrees
to provide (or cause to be provided) to the Trustee or the Notes Collateral
Agent, from time to time upon request, evidence reasonably satisfactory to the
Trustee and the Notes Collateral Agent as to the perfection and priority of the
Liens created or intended to be created by the Security Documents.
Article 5
Successor Company
SECTION 5.01 When Company May Merge or Transfer Assets. (a)
The Company shall not consolidate with or merge with or into, or convey,
transfer or lease, in one transaction or a series of transactions, directly or
indirectly, all or substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Securities and this Indenture;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness (other than any Indebtedness
of the Company or any of its Subsidiaries) which becomes an obligation
of the Successor Company or any Subsidiary as a result of such
transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have
occurred and be continuing;
(3) immediately after giving pro forma effect to such
transaction, the Successor Company would be able to Incur an additional
$1.00 of Indebtedness pursuant to Section 4.03(a); and
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of
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Counsel, each stating that such consolidation, merger or transfer and
such supplemental indenture (if any) comply with this Indenture;
provided, however, that clause (3) will not be applicable to (A) a Restricted
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company or (B) the Company merging with an
Affiliate of the Company solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
For purposes of this Section 5.01, the sale, lease,
conveyance, assignment, transfer or other disposition of all or substantially
all of the properties and assets of one or more Subsidiaries of the Company,
which properties and assets, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Company on a consolidated basis, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
The Successor Company shall be the successor to the Company
and shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture, and the predecessor Company, except
in the case of a lease, shall be released from the obligation to pay the
principal of and interest on the Securities.
(b) The Company shall not permit any Subsidiary Guarantor
to consolidate with or merge with or into, or convey, transfer or lease, in one
transaction or a series of transactions, all or substantially all of its assets
to any Person unless:
(1) except in the case of a Subsidiary Guarantor that has
been disposed of in its entirety to another Person (other than to the Company or
an Affiliate of the Company), whether through a merger, consolidation or sale of
Capital Stock or assets, if in connection therewith the Company provides an
Officers' Certificate to the Trustee to the effect that the Company will comply
with its obligations under Section 4.06 in respect of such disposition, the
resulting, surviving or transferee Person (if not such Subsidiary) shall be a
Person organized and existing under the laws of the jurisdiction under which
such Subsidiary
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was organized or under the laws of the United States of America, or any State
thereof or the District of Columbia (or, in the case of a disposition of all or
substantially all of the assets of a Subsidiary Guarantor in which such assets
consist primarily of Capital Stock of a Subsidiary of such Subsidiary Guarantor,
the United Kingdom), and such Person shall expressly assume, by a Guaranty
Agreement in a form satisfactory to the Trustee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guaranty;
(2) immediately after giving effect to such transaction
or transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as a
result of such transaction as having been issued by such Person at the time of
such transaction), no Default shall have occurred and be continuing; and
(3) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such Guaranty Agreement, if any, complies with this
Indenture.
Article 6
Defaults and Remedies
SECTION 6.01 Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on
any Security when the same becomes due and payable, and such default
continues for a period of 30 days;
(2) the Company (A) defaults in the payment of the
principal of any Security when the same becomes due and payable at its
Stated Maturity, upon optional redemption, upon declaration of
acceleration or otherwise, or (B) fails to purchase Securities when
required pursuant to this Indenture or the Securities;
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08,
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4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 (other than a failure
to purchase Securities when required under Section 4.06 or 4.10) and
such failure continues for 30 days after the notice specified below;
(5) the Company or any Subsidiary Guarantor fails to
comply with any of its agreements in the Securities, this Indenture or
the Security Documents (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days after the
notice specified below;
(6) Indebtedness of the Company, any Subsidiary Guarantor
or any Significant Subsidiary is not paid within any applicable grace
period after final maturity or is accelerated by the holders thereof
because of a default and the total amount of such Indebtedness unpaid
or accelerated exceeds $10.0 million, or its foreign currency
equivalent at the time;
(7) a Subsidiary Guarantor, the Company or any
Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian
of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit
of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against a Subsidiary
Guarantor, the Company or any Significant Subsidiary in an
involuntary case;
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(B) appoints a Custodian of a Subsidiary
Guarantor, the Company or any Significant Subsidiary or for
any substantial part of its property; or
(C) orders the winding up or liquidation of a
Subsidiary Guarantor, the Company or any Significant
Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in
excess of $10.0 million (net of any amounts with respect to which a
reputable and creditworthy insurance carrier has acknowledged liability
in writing) or its foreign currency equivalent at the time is entered
against a Subsidiary Guarantor, the Company or any Significant
Subsidiary, remains outstanding for a period of 60 days following the
entry of such judgment or decree and is not discharged, waived or the
execution thereof stayed;
(10) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of such Subsidiary
Guaranty) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guaranty; or
(11) any security interest granted under any Security
Document shall, at any time, cease to be in full force and effect for
any reason other than the satisfaction in full of all Obligations under
this Indenture secured by such security interest or the release of such
security interest in accordance with the provisions of the Security
Documents (including the Intercreditor Agreement) or any security
interest created thereunder shall be declared invalid or unenforceable
or the Company or any Subsidiary Guarantor shall assert, in any
pleading in any court of competent jurisdiction, that any such security
interest is invalid or unenforceable.
The foregoing will constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or
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order of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clauses (4) or (5) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officers' Certificate
of any Event of Default under clause (6), (9), (10) or (11) and any event which
with the giving of notice or the lapse of time would become an Event of Default
under clause (4) or (5), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02 Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs
and is continuing, the principal of and interest on all the Securities shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of
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acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03 Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any 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 available remedies are cumulative.
SECTION 6.04 Waiver of Past Defaults. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (a) a Default in the
payment of the principal of or interest on a Security (b) a Default arising from
the failure to redeem or purchase any Security when required pursuant to this
Indenture or (c) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION 6.05 Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
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SECTION 6.06 Limitation on Suits. Except to enforce the right
to receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of
the Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee
reasonable security or indemnity against any loss, liability or
expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
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
to receive payment of principal of and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, 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(1) or (2) occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing (together with
interest on any unpaid interest to the extent lawful) and the amounts provided
for in Section 7.07.
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SECTION 6.09 Trustee May File Proofs of Claim. Subject to the
terms of the Intercreditor Agreement, the Trustee may file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company or any Subsidiary Guarantor, its creditors
or its property and, unless prohibited by law or applicable regulations, may
vote on behalf of the Holders in any election of a trustee in bankruptcy or
other Person performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to make payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and its counsel, and any other amounts due the Trustee under
Section 7.07.
SECTION 6.10 Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Company shall mail to each Securityholder and the Trustee
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11 Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in
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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 does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in principal amount of the Securities.
SECTION 6.12 Waiver of Stay or Extension Laws. The Company (to
the extent it may lawfully do so) hereby agrees that it shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and 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.
Article 7
Trustee
SECTION 7.01 Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise 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 undertakes to perform such duties and
only such duties as 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
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Trustee and conforming to the requirements of this Indenture. However, the
Trustee shall examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture (but need not independently
confirm or investigate the accuracy of any facts or mathematical calculations
stated therein).
(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;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section.
(e) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree in writing with the
Company.
(f) Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(h) Every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the
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provisions of this Section and to the provisions of the TIA.
SECTION 7.02 Rights of Trustee. (a) The Trustee may rely on
any document believed by it to be genuine and to have been signed or presented
by the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall
not be liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it
takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Trustee's conduct does
not constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
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 Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not
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be responsible for any statement of the Company in the Indenture or in any
document issued in connection with the sale of the Securities or in the
Securities other than the Trustee's certificate of authentication.
SECTION 7.05 Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is not opposed to the interests of Securityholders.
SECTION 7.06 Reports by Trustee to Holders. As promptly as
practicable after each June 15 beginning with the June 15 following the date of
this Indenture, and in any event prior to August 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of June 15 that
complies with TIA Section 313(a). The Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 7.07 Compensation and Indemnity. The Company shall pay
to the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim
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for which it may seek indemnity. Failure by the Trustee to so notify the Company
shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee may have separate counsel and the Company shall
pay the fees and expenses of such counsel. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Trustee through the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company'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 other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08 Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event
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being referred to herein as the retiring Trustee), the Company shall promptly
appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to 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.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09 Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated,
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any successor to the Trustee may authenticate such Securities either in the name
of any predecessor hereunder or in the name of the successor to the Trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided that the certificate of
the Trustee shall have.
SECTION 7.10 Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition. The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 7.11 Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
Article 8
Discharge of Indenture; Defeasance
SECTION 8.01 Discharge of Liability on Securities; Defeasance.
(a) When (1) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancelation, (2)
all outstanding Securities have become due and payable, whether at maturity or
on a redemption date as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof, or (3) all outstanding Securities have been
irrevocably called for redemption pursuant to Article 3 and, in the case of
clauses (2) and (3), the Company irrevocably deposits with the Trustee funds
that, together with any Trust Moneys held at such time by the Trustee that the
Company has instructed the Trustee to use for payment in accordance with this
Section, are sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all
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other sums payable hereunder by the Company, then this Indenture shall, subject
to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Company
accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at
any time may terminate (1) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (2) its obligations under Sections
4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14,
4.15 and 4.16 and the operation of Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8),
6.01(9) and 6.01(11) (but, in the case of Sections 6.01(7) and (8), with respect
only to Significant Subsidiaries and Subsidiary Guarantors) and the limitations
contained in Sections 5.01(a)(3) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default with
respect thereto. If the Company exercises its covenant defeasance option,
payment of the Securities may not be accelerated because of an Event of Default
specified in Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8), 6.01(9) and 6.01(11)
(but, in the case of Sections 6.01(7) and (8), with respect only to Significant
Subsidiaries and Subsidiary Guarantors) or because of the failure of the Company
to comply with Section 5.01(a)(3). If the Company exercises its legal defeasance
option or its covenant defeasance option, each Subsidiary Guarantor, if any,
shall be released from all its obligations with respect to its Subsidiary
Guaranty and the Security Documents.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the
Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and
7.08 and in this Article 8 shall survive until the Securities have been paid in
full. Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05
shall survive.
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SECTION 8.02 Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the
Trustee money or U.S. Government Obligations for the payment of principal of and
interest on the Securities to maturity or redemption, as the case may be (and,
if applicable, instructs the Trustee to use Trust Moneys held at such time by
the Trustee);
(2) the Company delivers to the Trustee a certificate
from a nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any deposited
money (and, if applicable, Trust Moneys) without investment will provide cash at
such times and in such amounts as will be sufficient to pay principal and
interest when due on all the Securities to maturity or redemption, as the case
may be;
(3) 123 days pass after the deposit is made and during
the 123-day period no Default specified in Sections 6.01(7) or (8) with respect
to the Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any
other agreement binding on the Company;
(5) the Company delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under the
Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel stating that
(A) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (B) since the date of this Indenture there has been
a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the
Securityholders will not recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject to Federal income
tax on the same
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amounts, in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for Federal
income tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such covenant defeasance had not occurred;
and
(8) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance and discharge of the Securities as contemplated by
this Article 8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03 Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations and, if applicable, Trust Moneys through the Paying Agent
and in accordance with this Indenture to the payment of principal of and
interest on the Securities.
SECTION 8.04 Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05 Indemnity for Government Obligations. The Company
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
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the principal and interest received on such U.S. Government Obligations.
SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 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 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
Article 9
Amendments
SECTION 9.01 Without Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture, the Security
Documents or the Securities without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition
to or in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of Section
163(f) of the Code or in a manner such that the uncertificated Securities are
described in Section 163(f)(2)(B) of the Code;
(4) to add Guarantees with respect to the Securities,
including any Subsidiary Guaranties, or to secure the Securities;
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(5) to add to the covenants of the Company or any
Subsidiary Guarantor for the benefit of the Holders or to surrender any right or
power herein conferred upon the Company or any Subsidiary Guarantor;
(6) to comply with any requirements of the SEC in
connection with qualifying, or maintaining the qualification of, this Indenture
under the TIA;
(7) to make any change that does not adversely affect the
rights of any Securityholder; or
(8) to make any amendment to the provisions of this
Indenture relating to the form, authentication, transfer and legending of
Securities; provided, however, that (a) compliance with this Indenture as so
amended would not result in Securities being transferred in violation of the
Securities Act or any other applicable securities law and (b) such amendment
does not materially affect the rights of Holders to transfer Securities.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.02 With Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may amend this Indenture, the Security
Documents or the Securities without notice to any Securityholder but with the
written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (consents obtained in connection with a tender offer
or exchange for the Securities). However, except as permitted by the following
sentence, without the consent of each Securityholder affected thereby, an
amendment or waiver may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or change the Stated Maturity
of any Security;
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(4) change the provisions applicable to the redemption of
any Security contained in Article 3 hereto or paragraph 5 of the Securities;
(5) make any Security payable in money other than that
stated in the Security;
(6) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such Holder's Securities;
(7) make any changes in the ranking or priority of any
Security that would adversely affect the Securityholders (other than pursuant to
clauses (1), (2) or (3) below);
(8) make any change in Section 6.04 or 6.07 or the second
sentence of this Section; or
(9) make any change in, or release other than in
accordance with this Indenture, any Subsidiary Guaranty or Security Document
that would adversely affect the Securityholders.
Notwithstanding the preceding, the consent of holders of
66 2/3% in principal amount of Securities then outstanding (excluding consents
obtained in connection with a tender offer or exchange for the Securities),
shall be sufficient to effectuate any amendment or waiver that:
(1) releases Collateral from the lien of this Indenture
and the Security Documents;
(2) changes the provisions applicable to the application
of the proceeds from the sale of Collateral; or
(3) changes or alters the priority of the security
interests in the Collateral;
in each case except as is provided by the terms of the Security Documents or the
Intercreditor Agreement.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
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After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.03 Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
SECTION 9.04 Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05 Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in
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exchange for the Security shall issue and the Trustee shall authenticate a new
Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06 Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 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 indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully
protected in relying upon, an Officers' Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
SECTION 9.07 Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
Article 10
Subsidiary Guaranties
SECTION 10.01 Guaranties. Each Subsidiary Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally, to each
Holder and to the Trustee and its successors and assigns (a) the full and
punctual payment of principal of and interest on the Securities when due,
whether at maturity, by acceleration, by redemption or otherwise, and all other
monetary obligations of the Company under this Indenture and the Securities and
(b) the full and punctual performance within applicable grace periods of all
other obligations of the Company under this Indenture and the Securities (all
the foregoing being hereinafter collectively called the "Guaranteed
Obligations"). Each Subsidiary Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed, in whole or in part, without notice or
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further assent from such Subsidiary Guarantor and that such Subsidiary Guarantor
will remain bound under this Article 10 notwithstanding any extension or renewal
of any Guaranteed Obligation.
Each Subsidiary Guarantor waives presentation to, demand of,
payment from and protest to the Company of any of the Guaranteed Obligations and
also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives
notice of any default under the Securities or the Guaranteed Obligations. The
obligations of each Subsidiary Guarantor hereunder shall not be affected by (1)
the failure of any Holder or the Trustee to assert any claim or demand or to
enforce any right or remedy against the Company or any other Person (including
any Subsidiary Guarantor) under this Indenture, the Securities or any other
agreement or otherwise; (2) any extension or renewal of any thereof; (3) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Indenture, the Securities or any other agreement; (4) the release of any
security held by any Holder or the Trustee for the Guaranteed Obligations or any
of them; (5) the failure of any Holder or the Trustee to exercise any right or
remedy against any other guarantor of the Guaranteed Obligations; or (6) except
as set forth in Section 10.06, any change in the ownership of such Subsidiary
Guarantor.
Each Subsidiary Guarantor further agrees that its Subsidiary
Guaranty herein constitutes a guarantee of payment, performance and compliance
when due (and not a guarantee of collection) and waives any right to require
that any resort be had by any Holder or the Trustee to any security held for
payment of the Guaranteed Obligations.
Except as expressly set forth in Sections 8.01(b), 10.02 and
10.06, the obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Subsidiary Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder or the Trustee to assert any claim or demand or to enforce any
remedy under
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this Indenture, the Securities, the Security Documents or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
willful or otherwise, in the performance of the obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Subsidiary Guarantor or would
otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law
or equity.
Each Subsidiary Guarantor further agrees that its Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any Holder
or the Trustee upon the bankruptcy or reorganization of the Company or
otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay
the principal of or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, each
Subsidiary Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the
Holders or the Trustee an amount equal to the sum of (A) the unpaid amount of
such Guaranteed Obligations, (B) accrued and unpaid interest on such Guaranteed
Obligations (but only to the extent not prohibited by law) and (C) all other
monetary Guaranteed Obligations of the Company to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that, as between it, on the
one hand, and the Holders and the Trustee, on the other hand, (i) the maturity
of the Guaranteed Obligations hereby may be accelerated as provided in Article 6
for the purposes of such Subsidiary Guarantor's Subsidiary Guaranty herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of such Guaranteed
Obligations as provided in Article 6, such Guaranteed Obligations (whether or
not
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due and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
any Holder in enforcing any rights under this Section.
SECTION 10.02 Limitation on Liability. Any term or provision
of this Indenture to the contrary notwithstanding, the maximum aggregate amount
of the Guaranteed Obligations guaranteed hereunder by any Subsidiary Guarantor
shall not exceed the maximum amount that can be hereby guaranteed without
rendering this Indenture, as it relates to such Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 10.03 Successors and Assigns. This Article 10 shall be
binding upon each Subsidiary Guarantor and its successors and assigns and shall
inure to the benefit of the successors and assigns of the Trustee and the
Holders and, in the event of any transfer or assignment of rights by any Holder
or the Trustee, the rights and privileges conferred upon that party in this
Indenture and in the Securities shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions of this
Indenture.
SECTION 10.04 No Waiver. Neither a failure nor a delay on the
part of either the Trustee or the Holders in exercising any right, power or
privilege under this Article 10 shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 10
at law, in equity, by statute or otherwise.
SECTION 10.05 Modification. No modification, amendment or
waiver of any provision of this Article 10, nor the consent to any departure by
any Subsidiary Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the
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specific instance and for the purpose for which given. No notice to or demand on
any Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
SECTION 10.06 Release of Subsidiary Guarantor. A Subsidiary
Guarantor will be released from its obligations under this Article 10 (other
than any obligation that may have arisen under Section 10.07)
(1) upon the sale (including any sale pursuant to any
exercise of remedies by a holder of Indebtedness of the Company or of such
Subsidiary Guarantor) or other disposition (including by way of consolidation or
merger) of a Subsidiary Guarantor;
(2) upon the sale or disposition of all or substantially
all the assets of such Subsidiary Guarantor;
(3) upon the designation of such Subsidiary Guarantor as
an Unrestricted Subsidiary in accordance with the terms of this Indenture unless
any of the Collateral is then owned by such Subsidiary Guarantor;
(4) upon defeasance of the Securities or discharge of
this Indenture pursuant to Article 8;
provided, however, that in the case of clauses (1) and (2) above, (i)
such sale or other disposition is made to a Person other than the
Company or a Subsidiary of the Company, (ii) such sale or disposition
is otherwise permitted by this Indenture and (iii) the Company provides
an Officers' Certificate to the Trustee to the effect that the Company
will comply with its obligations under Section 4.06. At the request of
the Company, the Trustee shall execute and deliver an appropriate
instrument evidencing such release.
SECTION 10.07 Contribution. Each Subsidiary Guarantor that
makes a payment under its Subsidiary Guaranty shall be entitled upon payment in
full of all Guaranteed Obligations under this Indenture to a contribution from
each other Subsidiary Guarantor in an amount equal to such other Subsidiary
Guarantor's pro rata portion of such payment based on the respective net assets
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of all the Subsidiary Guarantors at the time of such payment determined in
accordance with GAAP.
Article 11
Security Documents
SECTION 11.01 Collateral and Security Documents. (a) The due
and punctual payment of the principal and interest on the Securities when and as
the same shall be due and payable, whether on an interest payment date, at
maturity, by acceleration, repurchase, redemption or otherwise, and interest on
the overdue principal of and interest on the Securities and performance of all
other Security Obligations of the Company and the Guarantors to the
Securityholders, the Trustee or the Notes Collateral Agent under this Indenture,
the Securities and the Security Documents, according to the terms hereunder or
thereunder, are secured as provided in the Security Documents, which define the
terms of the Liens that secure the Security Obligations, subject to the terms of
the Intercreditor Agreement. The Trustee and the Company hereby acknowledge and
agree that the Trustee or the Notes Collateral Agent, as the case may be, holds
the Collateral in trust for the benefit of the Trustee and the Holders, in each
case pursuant to the terms of the Security Documents. Each Holder, by accepting
a Security, consents and agrees to the terms of the Security Documents
(including the provisions providing for foreclosure and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance
with its terms and authorizes and directs the Notes Collateral Agent to enter
into the Security Documents and to perform its obligations and exercise its
rights thereunder in accordance therewith, subject to the terms of the
Intercreditor Agreement. The Company shall deliver to the Trustee (if it is not
itself then the Notes Collateral Agent) copies of all documents delivered to the
Notes Collateral Agent pursuant to the Security Documents, and will do or cause
to be done all such acts and things as may be required by the next sentence of
this Section 11.01, to assure and confirm to the Trustee and the Notes
Collateral Agent the security interest in the Collateral contemplated hereby, by
the Security Documents or any part thereof, as from time to time constituted, so
as to render the same available for the security and benefit of this Indenture
and of the Securities secured hereby, according to the intent and purposes
herein expressed. The Company shall
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take, and shall cause its Subsidiaries to take, any and all actions reasonably
required to cause the Security Documents to create and maintain, as security for
the Security Obligations of the Company and the Subsidiary Guarantors, a valid
and enforceable perfected first-priority Lien and security interest (subject to
Permitted Liens) in and on all the Notes Collateral, in favor of the Notes
Collateral Agent for the benefit of the Holders, and a valid and enforceable
perfected second-priority Lien and security interest (subject to Permitted
Liens) in and on all the Bank Collateral, in favor of the Notes Collateral Agent
for the benefit of the Holders, second in priority to any and all security
interests at any time granted in the Bank Collateral to secure the Lenders Debt.
(b) The Company, the Trustee and the Notes Collateral
Agent have entered into the Notes Collateral Agency Agreement. By their
acceptance of the Securities, the Holders of the Securities shall be deemed (1)
to have authorized the Trustee to enter into such Notes Collateral Agency
Agreement and (2) to be bound thereby. The Trustee has appointed the Notes
Collateral Agent as its agent under the Collateral Agreements, and the Notes
Collateral Agent is thereby authorized to act on behalf of the Trustee, with
full authority and powers of the Trustee thereunder.
SECTION 11.02 Recordings and Opinions. The Company and the
Subsidiary Guarantors shall furnish to the Notes Collateral Agent or the Trustee
on or before July 1 in each year beginning with July 1, 2004, an Opinion of
Counsel dated as of such date, either:
(a) to the effect that, in the opinion of such counsel,
subject to customary qualifications, such action has been taken with respect to
the recordings, registerings, filings, re-recordings, re-registerings and
re-filings of this Indenture, the Security Documents and all financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Lien of the Security Documents in the Collateral
and reciting with respect to the security interests in such Collateral the
details of such action or referencing to prior Opinions of Counsel in which such
details are given; or
(b) to the effect that, in the opinion of such Counsel,
subject to customary qualifications, no such action is necessary to maintain
such Lien.
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SECTION 11.03 Release of Collateral. (a) Upon the sale,
transfer or other disposition of any assets included in the Collateral in the
ordinary course of business by the Company or any Subsidiary Guarantor to any
Person other than the Company or any Restricted Subsidiary, the Lien of this
Indenture and the Security Documents shall be automatically released; provided,
however, that the sale, transfer or disposition does not violate the terms of
this Indenture or the Security Documents. Notwithstanding the foregoing, the
Lien of this Indenture and the Security Documents will not be released if any
sale, transfer or other disposition of Collateral is made as part of a
transaction subject to the terms of Section 5.01. The Company shall deliver to
the Trustee on each June 15 and December 15 an Officers' Certificate stating
that all such dispositions of Collateral during the immediately preceding
six-month period were in the ordinary course of business and that such
dispositions and the application of the proceeds thereof were in compliance with
the terms of this Indenture. In the event of any release of any Collateral from
Liens securing the Securities and Subsidiary Guarantees pursuant to this clause
(a), promptly after written request, the Trustee and the Notes Collateral Agent
shall execute and deliver such documents as the Company shall reasonably request
to effectuate the release of such Liens.
(b) Upon the request of the Company to the Trustee
pursuant to an Officers' Certificate certifying that all conditions precedent
hereunder have been met and that no Event of Default has occurred and is
continuing, the Company and the Subsidiary Guarantors will be entitled, without
the consent of the Holders of Securities, to the release of any Collateral from
the Liens securing the Securities and the Subsidiary Guarantees under any one or
more of the following circumstances:
(i) to enable the Company or any Restricted Subsidiary to
consummate any sale, conveyance or other disposition of any assets (other than
(x) assets disposed of pursuant to Section 11.03(a) and (y) Trust Moneys, which
are subject to release from the Lien of this Indenture and the Security
Documents as provided under Article 12) in compliance with Section 4.06 (or in a
transaction not subject to Section 4.06) to any Person other than the Company or
a Restricted Subsidiary; provided, however, that the Lien of this Indenture and
the Security Documents will
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not be released pursuant to this Section 11.03(b)(i) if such sale, conveyance or
disposition is made as part of a transaction governed by Section 5.01;
(ii) in respect of assets subject to a Permitted Lien pursuant
to clause (6), and clause (13) only as it relates to clause (6), of the
definition of Permitted Liens on Section 1.01;
(iii) with respect to any asset constituting Bank Collateral,
if (x) all other Liens on that asset securing Lenders Debt (including
commitments thereunder) are released or (y) such release is expressly permitted
by the terms of the Intercreditor Agreement; or
(iv) pursuant to an amendment, waiver or supplement effected
in accordance with Article 9.
(c) Any Officers' Certificate requesting a release of
Collateral under Section 11.03(b) shall describe with particularity the items of
property proposed to be covered by the release and state that such release is in
compliance with the terms of this Indenture. In the event of any release of any
Collateral from Liens securing the Securities pursuant to Section 11.03(b),
promptly after the receipt of such Officers' Certificate, the Trustee and the
Notes Collateral Agent shall execute and deliver such documents as the Company
shall reasonably request to effectuate the release of such Liens.
(d) Subject to Section 11.03(e), in the event of any
release of Notes Collateral in connection with the sale, conveyance or
disposition of Notes Collateral, (i) the Company or a Restricted Subsidiary of
the Company shall deposit the Net Available Cash from such sale, conveyance or
disposition (except Net Available Cash from any sale, conveyance or disposition
which is not required, or cannot be required through the passage of time or
otherwise, to be used to repurchase or redeem or make an offer to repurchase
Securities hereunder) with the Trustee and the Notes Collateral Agent and (ii)
if any property other than cash or cash equivalents is included in the
consideration received in connection with such sale, conveyance or disposition,
such instruments of conveyance, assignment or transfer, if any, as may be
necessary to subject to the Lien of this Indenture and the Security Documents
all the right, title and interest of the Company or the applicable Subsidiary
Guarantor in and to such property. All cash or
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cash equivalents received by the Trustee pursuant to this Section 11.03 shall be
held by the Trustee, for the benefit of the Holders, or by the Notes Collateral
Agent on behalf of the Trustee and the Holders, as Trust Moneys under Article 12
subject to application as therein provided.
(e) (i) In the event of any sale, exchange or disposition
of Notes Collateral that results in the release of such Notes Collateral
pursuant to clause (b) of this Section 11.03:
(A) to the extent that the amount of Net Available Cash resulting
from such sale, exchange or disposition is less than $7.5
million, so long as no Event of Default shall have occurred
and be continuing and subject to the limitations set forth in
clause (iii) below, the Company is not required to deposit
such Net Available Cash with the Trustee as Trust Moneys as
contemplated by this Section 11.03; and
(B) to the extent that the amount of Net Available Cash resulting
from such sale, exchange or disposition is greater than or
equal to $7.5 million, the Company will be required to deposit
the full amount of such Net Available Cash with the Trustee as
Trust Moneys as contemplated by this Section 11.03; provided,
however, that so long as no Event of Default shall have
occurred and be continuing and subject to the limitations set
forth in clause (iii) below, the Company may withdraw Net
Available Cash (either in one withdrawal or a series of
withdrawals) from the amounts held by the Trustee or Notes
Collateral Agent pursuant to Article 12 and apply such Net
Available Cash in any manner not prohibited by the terms of
this Indenture.
(ii) Net Available Cash arising from the sale, exchange or
disposition of Notes Collateral that is not deposited with the Trustee pursuant
to clause (A) above or is withdrawn pursuant to clause (B) above are referred to
collectively as "Released Proceeds". Released Proceeds shall not be subject to
the Lien and security interest created by the Security Documents.
(iii) Notwithstanding anything to the contrary set forth in
this Section 11.03(e), at no time may the
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aggregate amount of Released Proceeds which have not yet been applied in
accordance with the terms of the Indenture exceed $7.5 million.
(iv) The Company shall be permitted to retain Net Available
Cash from the sale, exchange or other disposition of Notes Collateral pursuant
to clause (e)(i)(A), and such Net Available Cash shall be released from the Lien
and security interest created by the Security Documents, only to the extent
that, simultaneously with the consummation of such sale, lease, conveyance or
disposition, the Company has delivered to the Trustee and the Notes Collateral
Agent an Officers' Certificate that contains:
(1) a statement that a sale, lease, conveyance or other
disposition of Notes Collateral has occurred;
(2) a description of the Notes Collateral that was the subject
of the transaction and the consideration received in respect of such
Notes Collateral in the transaction;
(3) a statement that no Event of Default has occurred and is
continuing;
(4) a statement that the aggregate amount of Released Proceeds
outstanding immediately following the consummation of such transaction
will not exceed $7.5 million; and
(5) a covenant on behalf of the Company that the Released
Proceeds that are the subject of the transaction will be applied by the
Company in the manner contemplated by Section 4.06 within the time
periods specified in such section.
(v) The Company shall be permitted to withdraw Net Available
Cash from the sale, exchange or other disposition of, or other proceeds from,
Notes Collateral pursuant to clause (e)(i)(B), and the Trustee and Notes
Collateral Agent shall release such Net Available Cash from the Lien and
security interest created by the Security Documents, only to the extent that, at
least five Business Days prior to the date of such withdrawal and release, the
Company has delivered to the Trustee and Notes Collateral Agent an Officers'
Certificate that contains:
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(1) a statement as to the aggregate amount of Net Available
Cash to be withdrawn and released pursuant to clause (e)(i)(B);
(2) a statement that no Event of Default has occurred and is
continuing;
(3) a statement that the aggregate amount of Released Proceeds
outstanding immediately following such withdrawal and release will not
exceed $7.5 million; and
(4) a covenant on behalf of the Company that the Released
Proceeds that are the subject of such withdrawal and release will be
applied by the Company in the manner contemplated by Section 4.06
within the time periods specified in such section.
(vi) Upon the occurrence of any Event of Default, the Company
shall immediately deposit all Released Proceeds that have not yet been applied
in the manner contemplated by Section 4.06 with the Trustee and the Notes
Collateral Agent as Trust Moneys pursuant to Article 12, and such Released
Proceeds shall immediately become part of the Collateral and become subject to
the Lien and security interest created by the Security Documents.
SECTION 11.04 Eminent Domain, Expropriation and Other
Governmental Takings. If any of the Notes Collateral is taken by eminent domain,
expropriation or other similar governmental taking or is sold pursuant to the
exercise by any governmental authority of any right which it may then have to
purchase, or to designate a purchaser or to order a sale of, all or any part of
the Notes Collateral, the Trustee and the Notes Collateral Agent shall release
the property so taken or purchased from the Liens of the Indenture and the
Security Documents (and to execute and deliver such documents as the Company
shall reasonably request to effectuate the release of such Liens) at the
Company's sole cost and expense, but only upon receipt by the Trustee and the
Notes Collateral Agent of the following:
(1) an Officers' Certificate stating that such property
has been taken by eminent domain, expropriation or other similar governmental
taking and the amount of the
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award therefor, or that such property has been sold pursuant to a right vested
in a governmental authority to purchase, or to designate a purchaser, or order a
sale of such property and the amount of the proceeds of such sale, that the
amount of the proceeds of the property so sold is not less than the amount to
which the Company or the applicable Subsidiary Guarantor is legally entitled
under the terms of such right to purchase or designate a purchaser, or under the
order or orders directing such sale, as the case may be, and that all conditions
precedent herein provided for relating to such release have been complied with;
(2) to hold as Trust Moneys, subject to the disposition
thereof pursuant to Article 12 hereof (and, at the election of the Company,
subject to Section 11.03(e)), the award for such property or the proceeds of
such sale to the extent provided under the Security Documents; and
(3) an Opinion of Counsel substantially to the effect
that all conditions precedent herein provided for relating to such release have
been complied with.
In any proceedings for the taking or purchase or sale of any
part of the Collateral, by eminent domain, expropriation or other similar
governmental taking or by virtue of any such right to purchase or designate a
purchaser or to order a sale, the Trustee or the Notes Collateral Agent, as the
case may be, may be represented by counsel who may be counsel, at the Company's
expense, for the Company.
All cash received by the Trustee or the Notes Collateral
Agent, as the case may be, pursuant to this Section 11.04 shall be held by the
Trustee or the Notes Collateral Agent, as the case may be, as Trust Moneys under
Article 12 subject to application as therein provided and, at the election of
the Company, subject to Section 11.03(e). All purchase money and other
obligations received by the Trustee pursuant to this Section 11.04 shall be held
by the Trustee or the Notes Collateral Agent, as the case may be, as Notes
Collateral subject to application as provided in Section 11.09.
SECTION 11.05 Permitted Releases Not To Impair Lien; Trust
Indenture Act Requirements. The release of any Collateral from the terms hereof
and of the Security Documents or the release of, in whole or in part, the Liens
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created by the Security Documents, will not be deemed to impair the Lien on the
Collateral in contravention of the provisions hereof if and to the extent the
Collateral or Liens are released pursuant to the applicable Security Documents
and pursuant to the terms of this Article 11 or are released pursuant to the
terms of the Intercreditor Agreement. The Trustee and each of the Holders
acknowledge that a release of Collateral or a Lien strictly in accordance with
the terms of the Security Documents and of this Article 11 or pursuant to the
terms of the Intercreditor Agreement will not be deemed for any purpose to be an
impairment of the Lien on the Collateral in contravention of the terms of this
Indenture. To the extent applicable, the Company and each obligor on the
Securities shall cause Section 314(d) of the TIA (as modified by exemptive
relief and no-action positions issued by the Staff of the SEC from time to time,
including, without limitation, the positions set forth in Arch Wireless
Holdings, Inc. dated May 24, 2002 and Algoma Steel Inc. dated December 23, 2002)
relating to the release of property or securities from the Lien hereof and of
the Security Documents to be complied with. Any certificate or opinion required
by Section 314(d) of the TIA may be made by an officer of the Company, except in
cases which Section 314(d) of the TIA requires that such certificate or opinion
be made by an independent person.
SECTION 11.06 Suits To Protect the Collateral. Subject to the
provisions of the Security Documents and the Intercreditor Agreement, the
Trustee shall have power to institute and to maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Collateral by any acts
which may be unlawful or in violation of any of the Security Documents or this
Indenture, and such suits and proceedings as the Trustee, in its sole
discretion, may deem expedient to preserve or protect its interests and the
interests of the Holders in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance with,
such enactment, rule or order would impair the Lien on the Collateral or be
prejudicial to the interests of the Holders or the Trustee).
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SECTION 11.07 Purchaser Protected. In no event shall any
purchaser in good faith of any property purported to be released hereunder be
bound to ascertain the authority of the Trustee to execute the release or to
inquire as to the satisfaction of any conditions required by the provisions
hereof for the exercise of such authority or to see to the application of any
consideration given by such purchaser or other transferee; nor shall any
purchaser or other transferee of any property or rights permitted by this
Article 11 to be sold be under obligation to ascertain or inquire into the
authority of the Company or the applicable Subsidiary Guarantor to make any such
sale or other transfer.
SECTION 11.08 Powers Exercisable by Receiver or Trustee. In
case the Collateral shall be in the possession of a receiver or trustee,
lawfully appointed, the powers conferred in this Article 11 upon the Company or
a Subsidiary Guarantor with respect to the release, sale or other disposition of
such property may be exercised by such receiver or trustee, and an instrument
signed by such receiver or trustee shall be deemed the equivalent of any similar
instrument of the Company or a Subsidiary Guarantor or of any officer or
officers thereof required by the provisions of this Article 11; and if the
Trustee shall be in the possession of the Collateral under any provision of this
Indenture, then such powers may be exercised by the Trustee.
SECTION 11.09 Disposition of Obligations Received. All
purchase money and other obligations received by the Trustee or the Notes
Collateral Agent under this Article shall be held by the Trustee or the Notes
Collateral Agent, as the case may be, as a part of the Collateral (except as may
be provided by the terms of the Intercreditor Agreement). Subject to the terms
of the Intercreditor Agreement, upon payment in cash or cash equivalents by or
on behalf of the Company to the Trustee or the Notes Collateral Agent of an
amount equal to the entire unpaid principal amount of any such obligation, to
the extent not constituting Net Available Cash which may be required, through
the passage of time or otherwise, to be used to redeem or repurchase or to make
an offer to redeem or repurchase Securities, the Trustee or the Notes Collateral
Agent, as appropriate, shall release and transfer such obligation and any
mortgage securing the same upon receipt of any documentation that the Trustee or
the
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Notes Collateral Agent may reasonably require. Subject to the terms of the
Intercreditor Agreement, any cash or cash equivalents received by the Trustee or
the Notes Collateral Agent in respect of the principal of any such obligations
shall be held by the Trustee or the Notes Collateral Agent, as the case may be,
as Trust Moneys under Article 12 subject to application as therein provided and
as provided in the Security Documents. Until the Securities are accelerated
pursuant to Section 6.02, all interest and other income on any such obligations,
when received by the Trustee shall be paid to the Company from time to time in
accordance with Section 12.08. If the Securities have been accelerated pursuant
to Section 6.02, any such interest or other income not theretofore paid, when
collected by the Trustee, shall, subject to the terms of the Intercreditor
Agreement, be applied by the Trustee in accordance with Section 6.10.
SECTION 11.10 Determinations Relating to Collateral. In the
event (a) the Trustee shall receive any written request from the Company, a
Subsidiary Guarantor or the Notes Collateral Agent under any Security Agreement
for consent or approval with respect to any matter or thing relating to any
Collateral or the Company's or a Subsidiary Guarantor's obligations with respect
thereto or (b) there shall be due to or from the Trustee or the Notes Collateral
Agent under the provisions of any Security Agreement any material performance or
the delivery of any material instrument or (c) the Trustee shall become aware of
any material nonperformance by the Company or a Subsidiary Guarantor of any
covenant or any material breach of any representation or warranty of the Company
or a Subsidiary Guarantor set forth in any Security Agreement, then, in each
such event, the Trustee shall be entitled to hire, at the sole reasonable cost
and expense of the Company, experts, consultants, agents and attorneys to advise
the Trustee on the manner in which the Trustee should respond, or direct the
Notes Collateral Agent to respond, to such request or render any requested
performance or response to such nonperformance or breach. The Trustee shall be
fully protected in accordance with Article 7 hereof in the taking of any action
recommended or approved by any such expert, consultant, agent or attorney and by
indemnification provided in accordance with Section 6.05 and other sections of
this Indenture if such action is agreed to by Holders of a majority in principal
amount of the Securities pursuant to Section 6.05 and, the Trustee may, in its
sole
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discretion, prior to taking such action if such action could subject it to
environmental liabilities or taxation, require (1) direction from the Holders of
a majority in principal amount of the Securities in accordance with Section 6.05
hereof and (2) indemnification in accordance with Section 6.05.
SECTION 11.11 Release upon Termination of the Company's
Obligations. In the event that the Company delivers to the Trustee, in form and
substance reasonably acceptable to it, an Officers' Certificate certifying that
either (1) all the obligations under this Indenture, the Securities and the
Security Documents have been satisfied and discharged by complying with the
provisions of Article 8 and Section 7.07 (except for unmatured or unasserted
indemnity claims pursuant to Section 7.07) or by the payment in full of the
Company's obligations under the Securities, this Indenture and the Security
Documents, and all such obligations have been so satisfied, or (2) the
Securities have been defeased pursuant to Article 8, in either case the Trustee
shall deliver to the Company and the Notes Collateral Agent a notice stating
that the Trustee, on behalf of the Holders, disclaims and gives up any and all
rights it has in or to the Collateral (other than with respect to funds held by
the Trustee pursuant to Article 8), and any rights it has under the Security
Documents, and upon receipt by the Notes Collateral Agent of such notice, the
Notes Collateral Agent shall be deemed not to hold a Lien in the Collateral on
behalf of the Trustee and the Trustee and Notes Collateral Agent shall release
the Collateral (other than funds held by the Trustee pursuant to Article 8) from
such Liens at the Company's sole cost and expense and, upon written request by
the Company, shall promptly execute and deliver such documents as the Company
shall reasonably request to effectuate the release of such Liens.
SECTION 11.12 Notes Collateral Agent's Duties. The Notes
Collateral Agent, acting in its capacity as such, shall have only such duties
with respect to the Collateral as are set forth in the Notes Collateral Agency
Agreement.
SECTION 11.13 Additional Secured Obligations. If the Company
at any time Incurs any Indebtedness secured by a Lien on the Notes Collateral or
the Bank Collateral, the Trustee and the Notes Collateral Agent are empowered to
enter into such security, collateral, intercreditor and other similar agreements
as are necessary to set forth the
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relative rights and obligations of the Trustee and the Notes Collateral Agent,
on the one hand, and the agent or representative for the lenders of such
Indebtedness, on the other hand, in the Notes Collateral or Bank Collateral, as
applicable; provided, however, that in the event such Indebtedness is Pari Passu
Indebtedness, the Company shall cause such agent or representative to execute
and deliver a counterpart to, and agree to be bound by the terms of, the Notes
Collateral Agency Agreement.
Article 12
Application of Trust Moneys
SECTION 12.01 "Trust Moneys" Defined. All cash or cash
equivalents received by the Trustee or the Notes Collateral Agent on behalf of
the Trustee:
(1) upon the release of Notes Collateral from the Lien of
this Indenture and the Security Documents, including all moneys received in
respect of the principal of all purchase money, governmental and other
obligations;
(2) as compensation for, or proceeds of sale of, any part
of the Notes Collateral taken by eminent domain or purchased by, or sold
pursuant to an order of, a governmental authority or otherwise disposed of;
(3) as proceeds of insurance upon any part of the Notes
Collateral (other than any liability insurance proceeds payable to the Trustee
or the Notes Collateral Agent for any loss, liability or expense incurred by
it); or
(4) for application under this Article as elsewhere
provided in this Indenture or any Security Document;
(all such moneys being herein sometimes called "Trust Moneys"), shall be held by
the Trustee (or the Notes Collateral Agent as the agent of the Trustee) for the
benefit of the Holders of Securities as a part of the Collateral, shall be held
in United States dollars or U.S. dollar denominated obligations, and, upon any
entry upon or sale of the Notes Collateral or any part thereof pursuant to
Article 6, said Trust Moneys shall be applied in accordance with Section 6.10;
but, prior to any such entry or sale, all or any part of the Trust Moneys may be
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withdrawn, and shall be released, paid or applied by the Trustee or the Notes
Collateral Agent, as appropriate, from time to time as provided in Sections
12.02 to 12.05, inclusive, may be applied by the Trustee as provided in Section
12.07(b).
SECTION 12.02 Retirement of Securities. The Trustee shall, or
shall direct, as appropriate, the Notes Collateral Agent to deliver to the
Trustee Trust Moneys to, apply Trust Moneys from time to time to the payment of
the principal of and interest on any Securities, at final maturity or to the
redemption thereof or the purchase thereof upon tender or in the open market or
at private sale or upon any exchange or in any one or more of such ways,
including pursuant to a redemption under Article 3 or a required purchase
pursuant to Section 4.06, as the Company shall request, upon receipt by the
Trustee of the following:
(1) a resolution of the Board of Directors directing the
application pursuant to this Section of a specified amount of Trust Moneys
(denominated in U.S. dollars) and in case any such moneys are to be applied to
payment, designating any Securities, so to be paid and, in case any such moneys
are to be applied to the purchase of any Securities, prescribing the method of
purchase, the price or prices to be paid and the maximum principal amount at
maturity of any Securities, to be purchased and any other provisions of this
Indenture governing such purchase;
(2) additional cash (denominated in U.S. dollars) to the
extent necessary to fund the entire payment amount or purchase price, which cash
shall be held by the Trustee in trust for such purpose;
(3) an Officers' Certificate, dated not more than five
days prior to the date of the relevant application, stating
(A) that no Default exists; and
(B) that all conditions precedent and covenants
herein provided for relating to such application of Trust
Moneys have been complied with; and
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(4) an Opinion of Counsel stating that all conditions
precedent herein provided for relating to such application of Trust Moneys have
been complied with.
Upon compliance with the foregoing provisions of this Section,
the Trustee shall apply Trust Moneys available therefor as directed and
specified by such resolution, up to, but not exceeding, the principal amount at
maturity of the Securities to be so paid, redeemed or purchased.
A resolution of the Board of Directors expressed to be
irrevocable directing the application of Trust Moneys under this Section to the
payment of the principal of particular Securities shall for all purposes of this
Indenture be deemed the equivalent of the deposit of money with the Trustee in
trust for such purpose. Such Trust Moneys and any cash deposited with the
Trustee pursuant to subsection (b) of this Section shall not, after compliance
with the foregoing provisions of this Section, be deemed to be part of the
Collateral or Trust Moneys.
SECTION 12.03 Withdrawals of Trust Moneys. (a) Trust Moneys
may be withdrawn by the Company or any Subsidiary Guarantor and shall be paid by
the Trustee upon a request by the Company to the Trustee by the proper officer
or officers of the Company or the applicable Subsidiary Guarantor to either (x)
reimburse the Company or the applicable Subsidiary Guarantor for expenditures
made, or to pay costs incurred or to be incurred, by the Company or the
applicable Subsidiary Guarantor to repair, rebuild or replace Notes Collateral
that was destroyed, damaged or taken by eminent domain, expropriation or other
similar government action or (y) be used to acquire assets that qualify as
"Additional Assets" pursuant to clause (1) of the definition thereof (other than
Additional Assets that qualify as "Additional Assets" pursuant to clause (1)(B)
of the definition thereof unless and until the terms of the Intercreditor
Agreement are amended, modified or terminated to permit the addition of such
Additional Assets to the Notes Collateral)(or to reimburse the Company for
customary out-of-pocket costs incurred by the Company and directly related to
such acquisition) and that are added to the Notes Collateral immediately upon
their acquisition, in each case upon receipt by the Trustee of the following:
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(1) an Officers' Certificate dated not more than 30 days
prior to the date of the application for the withdrawal and payment of such
Trust Moneys, setting forth:
(A) that expenditures have been made, or costs
incurred, or will be made or incurred simultaneous with such
withdrawal of Trust Moneys, by the Company or the applicable
Subsidiary Guarantor in a specified amount for the purpose of
making certain repairs, rebuildings and replacements of the
Notes Collateral, which shall be briefly described, or
acquiring assets that qualify as "Additional Assets" pursuant
to clause (1) of the definition thereof (other than Additional
Assets that qualify as "Additional Assets" pursuant to clause
(1)(B) of the definition thereof unless and until the terms of
the Intercreditor Agreement are amended, modified or
terminated to permit the addition of such Additional Assets to
the Notes Collateral)(or reimbursing the Company for customary
out-of-pocket costs incurred by the Company and directly
related to such acquisition) that will be added to the Notes
Collateral immediately upon their acquisition;
(B) that no part of such expenditures, in any
previous or then pending application, has been or is being
made the basis for the withdrawal of any Trust Moneys pursuant
to this Section 12.03;
(C) that no part of such expenditures or costs
has been paid out of either the proceeds of insurance upon any
part of the Notes Collateral not required to be paid to the
Trustee or the Notes Collateral Agent, as appropriate, under
the Mortgage or any award for or the proceeds from any of the
Notes Collateral being taken under Section 11.04 hereof, as
the case may be;
(D) that there is no outstanding indebtedness or
other obligation, other than costs for which payment is being
requested, known to the Company, after due inquiry, for the
purchase price or construction of such repairs, rebuildings or
replacements, or for labor, wages, materials or supplies in
connection with the
121
making thereof, which, if unpaid, might become the basis of a
vendor's, mechanics', laborer's, materialmen's, statutory or
other similar Lien upon any of such repairs, rebuildings or
replacement, which Lien might, in the opinion of the signers
of such certificate, materially impair the security afforded
by such repairs, rebuildings or replacement; and
(E) that no Default or Event of Default shall
have occurred and be continuing.
(b) To the extent applicable, in connection with any
withdraw of Trust Moneys pursuant to Section 12.03(a), the Company and each
obligor shall cause Section 314 of the TIA (as modified by exemptive relief and
no-action positions issued by the Staff of the SEC from time to time, including,
without limitation, the positions set forth in Arch Wireless Holdings, Inc.
dated May 24, 2002 and Algoma Steel Inc. dated December 23, 2002) relating to
the release of property or securities from the Lien hereof and of the Security
Documents to be complied with. Any certificate or opinion required by Section
314 of the TIA may be made by an officer of the Company, except in cases in
which the TIA requires that such certificate or opinion be made by an
independent person.
(c) Upon compliance with the foregoing provisions of this
Section, the Trustee shall pay on Company request an amount of Trust Moneys of
the character aforesaid equal to the amount of the expenditures or costs stated
in the Officers' Certificate required by paragraph (A) of subsection (1) of this
Section 12.03. Unless the Notes Collateral Agent and Trustee shall otherwise
agree, all insurance relating to the Notes Collateral must name the Notes
Collateral Agent and Trustee as an insured, but without liability for premiums,
calls or assessments, and all amounts of whatsoever nature payable under any
insurance (to the extent covering the Notes Collateral) must be payable to the
Notes Collateral Agent and Trustee for distribution, first to itself and
thereafter to the Relevant Subsidiary Guarantor, as Owner of such Notes
Collateral or others as their interests may appear. All amounts payable under
any insurance with respect to a Mortgaged Property involving any damage to a
Mortgaged Property not constituting an actual or constructive or an agreed or
compromised total loss, the insurers may pay directly for the repair, salvage or
other
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charges involved or, if the relevant Subsidiary Guarantor shall have first fully
repaired the damage or paid all of the salvage or other charges, may pay the
relevant Subsidiary Guarantor as reimbursement therefore; provided, however,
that if such amounts (including any franchise or deductible) are in excess of
One Million United States Dollars ($1,000,000), the insurers shall make such
payment to the Notes Collateral Agent and Trustee. All payments of insurance in
respect of Notes Collateral shall be made to the Notes Collateral Agent and the
Trustee if an Event of Default shall have occurred or any event which with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
SECTION 12.04 Powers Exercisable Notwithstanding Event of
Default. In case an Event of Default shall have occurred and shall be
continuing, the Company, while in possession of the Notes Collateral (other than
cash, cash equivalents, securities and other personal property held by, or
required to be deposited or pledged with, the Trustee hereunder or under the
Security Documents), may do any of the things enumerated in Sections 12.02 and
12.03 if the Trustee in its discretion, or the Holders of a majority in
aggregate principal amount at maturity of the outstanding Securities, by
appropriate action of such Holders, shall consent to such action, in which event
any certificate filed under any of such Sections shall omit the statement to the
effect that no Event of Default has occurred and is continuing. This Section
12.04 shall not apply, however, during the continuance of an Event of Default of
the type specified in Section 6.01(1) or 6.01(2).
SECTION 12.05 Powers Exercisable by Trustee or Receiver. In
case the Notes Collateral (other than any cash, cash equivalents, securities and
other personal property held by, or required to be deposited or pledged with,
the Trustee hereunder or under the Security Documents) shall be in the
possession of a receiver or trustee lawfully appointed, the powers hereinbefore
in this Article 12 conferred upon the Company and the Subsidiary Guarantors with
respect to the withdrawal or application of Trust Moneys may be exercised by
such receiver or trustee, in which case a certificate signed by such receiver or
trustee shall be deemed the equivalent of any Officers' Certificate required by
this Article 12. If the Trustee shall be in possession of any of the Notes
Collateral
123
hereunder or under the Security Documents, such powers may be exercised by the
Trustee in its sole discretion.
SECTION 12.06 Disposition of Securities Retired. All
Securities received by the Trustee and for whose purchase Trust Moneys are
applied under this Article 12, if not otherwise canceled, shall be promptly
canceled and destroyed by the Trustee. Upon destruction of any Securities, the
Trustee shall issue a certificate of destruction to the Company.
SECTION 12.07 Investment and Use of Trust Moneys. (a) Except
as may be otherwise required by the terms of the Collateral Agreements or Notes
Collateral Agency Agreement, all or any part of any Trust Moneys held by the
Trustee hereunder (except such as may be held for the account of any particular
Securities) or by the Notes Collateral Agent on behalf of the Trustee, shall
from time to time at the direction of the Company be invested or reinvested in
Temporary Cash Investments. Unless a Default occurs and is continuing, any
interest on such Temporary Cash Investments (in excess of any accrued interest
paid at the time of purchase) which may be received by the Trustee or the Notes
Collateral Agent, as appropriate, shall be paid periodically to the Company.
Such Temporary Cash Investments shall be held by the Trustee as a part of the
Collateral, subject to the same provisions hereof as the cash used by it to
purchase such cash equivalents. The Trustee shall not be liable or responsible
for any loss resulting from such investments or sales except only for its own
negligent action, its own negligent failure to act or its own willful misconduct
in complying with this Section 12.07.
(b) If the Company or any Subsidiary Guarantor shall fail
to perform any of its covenants in this Indenture or under any Security
Agreement, the Trustee may (but shall not be required to), direct the Notes
Collateral Agent to, at any time and from time to time, use, apply and advance
any Trust Moneys held by it under this Article 12 or make advances to effect
performance of any such covenant on behalf of the Company or such Subsidiary
Guarantor as contemplated by this Indenture or the Security Documents; provided,
however, that the Trustee or the Notes Collateral Agent, as appropriate, shall
not be required to make any such advances from its own funds; provided further,
however, that all moneys so used or advanced by the Trustee, together (in the
case of funds advanced by the
124
Trustee) with interest at the rate borne by the Securities shall be repaid by
the Company or the applicable Subsidiary Guarantor upon demand and such advances
shall be secured under the Mortgages prior to the Securities. For repayment of
all such advances the Trustee shall have the right to use and apply any Trust
Moneys at any time held by it under Article 12 but no such use of Trust Moneys
or advance shall relieve the Company or such Subsidiary Guarantor from any
Default.
Article 13
Miscellaneous
SECTION 13.01 Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 13.02 Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company or any Subsidiary Guarantor:
Jacuzzi Brands, Inc.
000 X. Xxxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Xx., Esq.
if to the Trustee:
Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Capital Markets
125
with a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
The Company, any Subsidiary Guarantor or the Trustee by notice
to the other may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03 Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, any Subsidiary Guarantor, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).
SECTION 13.04 Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the
126
opinion of such counsel, all such conditions precedent have been complied with.
SECTION 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
(2) 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;
(3) a statement that, in the opinion of such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of
such individual, such covenant or condition has been complied with.
SECTION 13.06 When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose 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. Also, subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 13.07 Rules by Trustee, Paying Agent and Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 13.08 Legal Holidays. If a payment date is a Legal
Holiday, payment shall be made on the next
127
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period. If a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 13.09 Governing Law. This Indenture, the Security
Documents and the Securities shall be governed by, and construed in accordance
with, the laws of the State of New York.
SECTION 13.10 No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or any Subsidiary Guarantor
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or of such Subsidiary Guarantor under its
Subsidiary Guaranty, the Security Documents or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Securities.
SECTION 13.11 Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 13.12 Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 13.13 Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
128
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
JACUZZI BRANDS, INC.,
By
_____________________________________
Name:
Title:
EACH OF THE GUARANTORS LISTED
ON SCHEDULE A HERETO,
By
_____________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee,
By
_____________________________________
Name:
Title:
SCHEDULE A
SUBSIDIARY GUARANTORS
Asteria Company
Bathcraft, Inc.
Xxxxxx Brothers Inc.
Xxxxxxxx Manufacturing Corp.
Carlsbad Corp.
Compax Corp.
Eljer Industries, Inc.
Eljer Plumbingware, Inc.
Environmental Energy Company
Xxxx Concrete Products, Inc.
Gatsby Spas, Inc.
HL Capital Corp.
Jacuzzi Inc.
Jacuzzi Whirlpool Bath, Inc.
JUSI Holdings, Inc.
KLI, Inc.
Krikles Canada U.S.A., Inc.
Krikles Europe U.S.A., Inc.
Krikles, Inc.
Lokelani Development Corporation
Luxor Industries, Inc.
Maili Kai Land Development Corporation
Mobilite, Inc.
Xxxxxx Universal Holdings Inc.
Outdoor Products, LLC
PH Property Development Company
PLC Realty Inc.
Redmont, Inc.
Rexair Holdings, Inc.
Rexair, Inc.
Sanitary-Dash Manufacturing, Co.
SH1 Inc.
Strategic Capital Management, Inc.
Strategic Membership Company
Streamwood Corporation
Sundance Spas, Inc.
TA Liquidation Corp.
Trimfoot Co.
TT Liquidation Corp.
UGE Liquidation Inc.
USI American Holdings, Inc.
USI Atlantic Corp.
USI Capital, Inc.
2
USI Funding, Inc.
USI Global Corp.
USI Properties, Inc.
USI Realty Corp.
Zurco, Inc.
Xxxx (Cayman Islands), Inc.
Xxxx Constructors, Inc.
Xxxx XXX Services, Inc.
Xxxx Industries, Inc.
Xxxx PEX, Inc. (formerly United States
Brass Corporation)
Zurnacq of California Inc.
EXHIBIT 1
[FORM OF SUPPLEMENTAL INDENTURE TO BE
DELIVERED BY ADDITIONAL SUBSIDIARY GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated
as of [ ] among [ ] (the "Additional Subsidiary Guarantor"), a [ ]
corporation and a subsidiary of Jacuzzi Brands, Inc., a Delaware corporation (or
its permitted successor) (the "Company"), the other Subsidiary Guarantors (the
"Existing Subsidiary Guarantors") and Wilmington Trust Company, a Delaware
corporation, not in its individual capacity but solely as trustee under the
Indenture (the "Trustee").
W I T N E S S E T H :
WHEREAS, the Issuers, the Company and the Subsidiary
Guarantors have heretofore executed and delivered to the Trustee an Indenture
(the "Indenture"), dated as of July 15, 2003, providing for the issuance of 9?%
Senior Secured Notes due 2010 (the "Securities");
WHEREAS, [Section 4.13]/[Section 5.01(b)] of the Indenture
provides that under certain circumstances the Company will cause the Additional
Subsidiary Guarantor to execute and deliver to the Trustee a Guaranty Agreement
pursuant to which the Additional Subsidiary Guarantor will Guarantee payment of
the Securities on the same terms and conditions as those set forth in Article 10
of the Indenture (other than Section 10.01); and
WHEREAS, pursuant to Section 9.01(5) of the Indenture, the
Trustee, the Company and the Existing Subsidiary Guarantors are authorized to
execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for good
and valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Additional Subsidiary Guarantor, the Existing Subsidiary Guarantors
and the Trustee mutually covenant and agree for the equal and ratable benefit of
the Holders of the Securities as follows:
SECTION 1. Capitalized Terms. Capitalized terms used herein
but not defined shall have the meanings assigned to them in the Indenture.
2
SECTION 2. Guaranties. [a] The Additional Subsidiary Guarantor
hereby agrees, jointly and severally with all other Subsidiary Guarantors, to
guarantee the Issuers' obligations under the Securities on the terms and subject
to the conditions set forth in Article 10 of the Indenture (other than Section
10.01) and to be bound by all other applicable provisions of the Indenture
(including Article 11).
[(b) If, in connection with any payment made under or with
respect to the Subsidiary Guaranty of the Additional Subsidiary Guarantor, the
Additional Subsidiary Guarantor is required to withhold or deduct any amount for
or on account of any present or future tax, duty, levy, impost, assessment or
other governmental charge (including penalties, interest and other liabilities
related thereto)(hereinafter "Taxes") imposed or levied by or on behalf of the
government of [ ](1) or any political subdivision or any authority or agency
therein or thereof having power to tax, or within any other jurisdiction in
which the Additional Subsidiary Guarantor is organized or is otherwise resident
for tax purposes or any jurisdiction from or through which payment is made (each
a "Relevant Taxing Jurisdiction"), such Additional Subsidiary Guarantor will be
required to pay such additional amounts ("Additional Amounts") as may be
necessary so that the net amount received by Holders (including Additional
Amounts) after such withholding or deduction will not be less than the amount
the Holders would have received if such Taxes had not been withheld or deducted;
provided, however, that no Additional Amounts will be payable with respect to a
payment made to a Holder which is subject to Taxes by reason of its being
connected with the Relevant Taxing Jurisdiction (other than by the mere
ownership or holding of Securities outside [ ](2) or the receipt of payments in
respect of the Subsidiary Guaranty of the Additional Subsidiary Guarantor.
(c) Upon request, the Additional Subsidiary Guarantor
shall provide the Trustee with official receipts or other documentation
satisfactory to the Trustee
--------------------------
(1) Provide applicable jurisdiction of incorporation or organization.
(2) Provide applicable jurisdiction of incorporation or organization.
3
3
evidencing the payment of the Taxes with respect to which Additional Amounts are
paid.(3)
SECTION 3. Ratification of Indenture; Supplemental Indentures
Part of Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture shall
form a part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
SECTION 4. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 5. Trustee Makes No Representation. The Trustee makes
no representation as to the validity or sufficiency of this Supplemental
Indenture.
SECTION 6. Counterparts. The parties may sign any number of
copies of this Supplemental Indenture. Each signed copy shall be an original,
but all of them together represent the same agreement.
SECTION 7. Effect of Headings. The Section headings herein are
for convenience only and shall not effect the construction of this Supplemental
Indenture.
----------------------
(3) Include if the Additional Subsidiary Guarantor is incorporated or organized
under the laws of a jurisdiction outside the United States of America.
4
IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed as of the date first written above.
JACUZZI BRANDS, INC.,
by /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Sr. Vice President,
General Counsel and
Secretary
[SUBSIDIARY GUARANTORS],
by /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and
Assistant Secretary
[ADDITIONAL SUBSIDIARY GUARANTOR],
by /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and
Assistant Secretary
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee,
By /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means the 9 5/8% Senior Secured Notes
due 2010 issued pursuant to the Indenture in connection with the Registered
Exchange Offer pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston LLC,
Fleet Securities, Inc. and Xxxxxxxxx & Company, Inc.
"Initial Securities" means $380.0 million aggregate principal
amount of 9 5/8% Senior Secured Notes due 2010 issued on the Issue Date.
"Private Exchange" means the offer by the Company, pursuant to
the Registration Rights Agreement, to the Initial Purchasers to issue and
deliver to each Initial Purchaser, in exchange for the Initial Securities held
by the Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 9 5/8% Senior Secured
Notes due 2010 issued in connection with a Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated June
30, 2003, among the Company, the Subsidiary Guarantors and the Initial
Purchasers.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A.
2
"Registered Exchange Offer" means the offer by the Company,
pursuant to the Registration Rights Agreement, to certain Holders of Initial
Securities, to issue and deliver to such Holders, in exchange for the Initial
Securities, a like aggregate principal amount of Exchange Securities registered
under the Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated July 15, 2003, among the Company, the Subsidiary Guarantors and
the Initial Purchasers.
"Securities" means the Initial Securities, the Exchange
Securities and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
"Securities Custodian" means the custodian with respect to a
Global Security (as appointed by the Depository), or any successor Person
thereto and shall initially be the Trustee.
"Shelf Registration Statement" means the registration
statement filed by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to the Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or
are required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions.
Defined in
Term Section:
---- --------
"Agent Members"..................................... 2.1(b)
"Global Security"................................... 2.1(a)
"Regulation S"...................................... 2.1(a)
"Restricted Global Security"........................ 2.1(a)
"Rule 144A"......................................... 2.1(a)
3
2. The Securities.
2.1 (a) Form and Dating. Initial Securities offered and sold
to a QIB in reliance on Rule 144A under the Securities Act ("Rule 144A") or in
reliance on Regulation S under the Securities Act ("Regulation S"), in each case
as provided in the Purchase Agreement, and Private Exchange Securities, as
provided in the Registration Rights Agreement, shall be issued initially in the
form of one or more permanent global Securities in definitive, fully registered
form without interest coupons with the global securities legend and restricted
securities legend set forth in Exhibit 1 hereto (each, a "Restricted Global
Security"), which shall be deposited on behalf of the purchasers of the Initial
Securities represented thereby with the Trustee, at its principal corporate
trust office, as custodian for the Depository (or with such other custodian as
the Depository may direct), and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided. Exchange Securities shall be issued in global form (with the global
securities legend set forth in Exhibit 1 hereto) or in certificated form at the
option of the Holders thereof from time to time. Exchange Securities issued in
global form and Restricted Global Securities are sometimes referred to in this
Appendix as "Global Securities".
(b) Book-Entry Provisions. This Section 2.1(b) shall
apply only to a Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture
4
with respect to any Global Security held on their behalf by the Depository or by
the Trustee as the custodian of the Depository or under such Global Security,
and the Company, the Trustee and any agent of the Company or the Trustee shall
be entitled to treat the Depository as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Agent Members, the operation of customary practices of such Depository
governing the exercise of the rights of a holder of a beneficial interest in any
Global Security.
(c) Certificated Securities. Except as provided in this
Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Restricted
Global Securities shall not be entitled to receive physical delivery of
certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver:
(1) on the Issue Date, an aggregate principal amount of $380.0 million 9 5/8%
Senior Secured Notes due 2010 and (2) Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to the Registration Rights Agreement, for a like
principal amount of Initial Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated. The aggregate principal amount of
Securities outstanding at any time shall not exceed $380.0 million except as
provided in Section 2.07 of this Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities.
(1) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depository, in
accordance with this Indenture (including applicable restrictions on transfer
set forth herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest
5
in a Global Security shall deliver to the Registrar a written order given in
accordance with the Depositary's procedures containing information regarding the
participant account of the Depositary to be credited with a beneficial interest
in the Global Security. The Registrar shall, in accordance with such
instructions instruct the Depositary to credit to the account of the Person
specified in such instructions a beneficial interest in the Global Security and
to debit the account of the Person making the transfer the beneficial interest
in the Global Security being transferred.
(2) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4), a Global Security may not
be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(3) In the event that a Restricted Global Security is
exchanged for Securities in certificated registered form pursuant to Section 2.4
of this Appendix, prior to the exchange of such Security pursuant to a
Registered Exchange Offer or transfer of such Security pursuant to an effective
Shelf Registration Statement with respect to such Securities, such Securities
may be exchanged only in accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A or Regulation S, as the case
may be) and such other procedures as may from time to time be adopted by the
Company.
(b) Legend.
(1) Except as permitted by the following paragraphs (2),
(3) and (4), each Security certificate evidencing the Restricted Global
Securities (and all Securities issued in exchange therefor or in substitution
thereof) shall bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE SECURITIES ACT
6
OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE
144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF
THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO
THE COMPANY, (II) IN THE UNITED STATES TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V)
IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
(2) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a Restricted
Global Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the transferee thereof to exchange such Transfer Restricted
Security for a certificated Security that does not bear the legend set forth
above and rescind any restriction on the transfer of such Transfer Restricted
Security, if the transferor thereof certifies in writing to the Registrar that
such sale or transfer was
7
made in reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
(3) After a transfer of any Initial Securities or Private
Exchange Securities pursuant to and during the period of the effectiveness of a
Shelf Registration Statement with respect to such Initial Securities or Private
Exchange Securities, as the case may be, all requirements pertaining to legends
on such Initial Security or such Private Exchange Security will cease to apply,
the requirements requiring any such Initial Security or such Private Exchange
Security issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an Initial
Security or Private Exchange Security in global form, in each case without
restrictive transfer legends, will be available to the transferee of the Holder
of such Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange Security
or directions to transfer such Holder's interest in the Global Security, as
applicable.
(4) Upon the consummation of a Registered Exchange Offer
with respect to the Initial Securities, all requirements pertaining to such
Initial Securities that Initial Securities issued to certain Holders be issued
in global form will still apply with respect to Holders of such Initial
Securities that do not exchange their Initial Securities, and Exchange
Securities in certificated or global form will be available to Holders that
exchange such Initial Securities in such Registered Exchange Offer.
(5) Upon the consummation of a Private Exchange with
respect to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in global
form will still apply with respect to Holders of such Initial Securities that do
not exchange their Initial Securities, and Private Exchange Securities in global
form with the global securities legend and the Restricted Securities Legend set
forth in Exhibit 1 hereto will be available to Holders that exchange such
Initial Securities in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At
such time as all beneficial interests in a Global Security have either been
exchanged for certificated
8
Securities, redeemed, purchased or canceled, such Global Security shall be
returned to the Depository for cancellation or retained and canceled by the
Trustee. At any time prior to such cancellation, if any beneficial interest in a
Global Security is exchanged for certificated Securities, redeemed, purchased or
canceled, the principal amount of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the books and records of the
Trustee (if it is then the Securities Custodian for such Global Security) with
respect to such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges
of Securities.
(1) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or co-registrar's request.
(2) No service charge shall be made for any registration
of transfer or exchange, but the Company may require payment of a sum sufficient
to cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Sections 3.06, 4.06, 4.10 and 9.05 of the Indenture).
(3) The Registrar or co-registrar shall not be required
to register the transfer of or exchange of any Security for a period beginning
15 Business Days before the mailing of a notice of an offer to repurchase or
redeem Securities or 15 Business Days before an interest payment date.
(4) Prior to the due presentation for registration of
transfer of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
9
(5) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt and shall
be entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(e) Obligation of the Trustee.
(1) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Security, a member of, or a
participant in the Depository or other Person with respect to the accuracy of
the records of the Depository or its nominee or of any participant or member
thereof, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or other
Person (other than the Depository) of any notice (including any notice of
redemption) or the payment of any amount, under or with respect to such
Securities. All notices and communications to be given to the Holders and all
payments to be made to Holders under the Securities shall be given or made only
to or upon the order of the registered Holders (which shall be the Depository or
its nominee in the case of a Global Security). The rights of beneficial owners
in any Global Security shall be exercised only through the Depository subject to
the applicable rules and procedures of the Depository. The Trustee may rely and
shall be fully protected in relying upon information furnished by the Depository
with respect to its members, participants and any beneficial owners.
(2) The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between or
among Depository participants, members or beneficial owners in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
2.4 Certificated Securities.
(a) A Restricted Global Security deposited with the
Depository or with the Trustee as custodian for the
10
Depository pursuant to Section 2.1 shall be transferred to the beneficial owners
thereof in the form of certificated Securities in an aggregate principal amount
equal to the principal amount of such Global Security, in exchange for such
Global Security, only if such transfer complies with Section 2.3 and (1) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for such Restricted Global Security or if at any time such Depository
ceases to be a "clearing agency" registered under the Exchange Act and a
successor depositary is not appointed by the Company within 90 days of such
notice, or (2) an Event of Default has occurred and is continuing or (3) the
Company, in its sole discretion, notifies the Trustee in writing that it elects
to cause the issuance of certificated Securities under this Indenture.
(b) Any Restricted Global Security that is transferable
to the beneficial owners thereof pursuant to this Section shall be surrendered
by the Depository to the Trustee located at its principal corporate trust office
in the Borough of Manhattan, The City of New York, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Restricted
Global Security, an equal aggregate principal amount of certificated Initial
Securities of authorized denominations. Any portion of a Restricted Global
Security transferred pursuant to this Section shall be executed, authenticated
and delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security or Private Exchange Security delivered in
exchange for an interest in the Restricted Global Security shall, except as
otherwise provided by Section 2.3(b), bear the restricted securities legend set
forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the
registered Holder of a Global Security shall be entitled to grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(d) In the event of the occurrence of either of the
events specified in Section 2.4(a), the Company shall promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
2
OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40 DAYS AFTER
THE COMMENCEMENT OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE
UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT) MAY VIOLATE THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE
OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP INTERESTS IN
THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOT BE EXCHANGEABLE FOR
INTERESTS IN THE PERMANENT REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED HEREBY WHICH DO NOT
CONTAIN A LEGEND CONTAINING RESTRICTIONS ON TRANSFER, UNTIL THE EXPIRATION OF
THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN ONLY UPON
CERTIFICATION IN FORM REASONABLY SATISFACTORY TO THE TRUSTEE THAT SUCH
BENEFICIAL INTERESTS ARE OWNED EITHER BY NON-U.S. PERSONS OR U.S. PERSONS WHO
PURCHASED SUCH INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED (I) TO THE COMPANY, (II) WITHIN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, OR (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY
APPLICABLE
3
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND OTHER JURISDICTIONS.
HOLDERS OF INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY WILL NOTIFY
ANY PURCHASER OF THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE, IF
THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL
SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE 144A GLOBAL SECURITY ONLY IF
(1) SUCH EXCHANGE OCCURS IN CONNECTION WITH A TRANSFER OF THE SECURITIES IN
COMPLIANCE WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S GLOBAL
SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT THE REGULATION S GLOBAL
SECURITY IS BEING TRANSFERRED (A) TO A PERSON WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A,
(B) TO A PERSON WHO IS PURCHASING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, AND (C) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF
THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTERESTS IN A RULE 144A GLOBAL SECURITY MAY BE
TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE FORM OF AN INTEREST IN THE
REGULATION S GLOBAL SECURITY, WHETHER BEFORE OR AFTER THE EXPIRATION OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST DELIVERS TO
THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT SUCH TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904
OF REGULATION S, RULE 144 (IF AVAILABLE) OR ANOTHER APPLICABLE EXEMPTION UNDER
THE SECURITIES ACT (IF AVAILABLE).
[Definitive Regulation S Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
4
JACUZZI BRANDS, INC.
9 5/8% SENIOR SECURED NOTES DUE 2010
No._______________ $ ____________
Jacuzzi Brands, Inc., a Delaware corporation, promises to pay
to , or registered assigns, the principal sum of __________ Dollars on
July 1, 2010.
Interest Payment Dates: January 1 and July 1.
Record Dates: December 15 and June 15.
Additional provisions of this Security are set forth on the
other side of this Security.
Dated:
JACUZZI BRANDS, INC.
By
_________________________________
Name:
Title:
By
_________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee, certifies that
this is one of
the Securities referred
to in the Indenture.
By
_______________________________
Authorized Signatory
5
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9 5/8% Senior Secured Note due 2010
1. Interest
Jacuzzi Brands, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured. The
Company will pay interest semiannually on January 1 and July 1 of each year,
commencing January 1, 2004. 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 July 15, 2003. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company will pay interest on overdue principal at the
rate borne by this Security plus 1.0% per annum, and it will pay interest on
overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company 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 December 15 or June 15 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of
6
immediately available funds to the accounts specified by the Depository. The
Company will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust Company, a Delaware corporation,
not in its individual capacity but solely as trustee (the "Trustee"), will act
as Paying Agent and Registrar. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act as Paying Agent,
Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of July 15, 2003 ("Indenture"), among the Company, the Subsidiary Guarantors 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.C. Sections 77aaa-77bbbb) (the "Act"). Terms defined in the
Indenture 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 secured obligations of the Company
limited to $380.0 million aggregate principal amount (subject to Section 2.07 of
the Indenture). The Initial Securities issued on the Issue Date and all Exchange
Securities or Private Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay
7
dividends or distributions on, or redeem or repurchase capital stock; make
investments; issue or sell capital stock of subsidiaries; engage in transactions
with affiliates; create liens on assets; transfer or sell assets; guarantee
indebtedness; restrict dividends or other payments of subsidiaries; consolidate,
merge or transfer all or substantially all of its assets and the assets of its
subsidiaries; engage in sale/leaseback transactions; and materially impair the
security interest in the Collateral. These covenants are subject to important
exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled
to redeem the Securities.
On and after July 1, 2007, the Company shall be entitled at
its option to redeem all or a portion of the Securities upon not less than 30
nor more than 60 days' notice, at the redemption prices (expressed in
percentages of principal amount on the redemption date), plus accrued interest
to the redemption date (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the 12-month period commencing on July 1 of the years
set forth below:
Redemption
Period Price
------ ----------
2007 104.813%
2008 102.406%
2009 and thereafter 100.000%
In addition, prior to July 1, 2006, the Company shall be
entitled at its option on one or more occasions to redeem Securities in an
aggregate principal amount not to exceed 35% of the aggregate principal amount
of the Securities originally issued at a redemption price (expressed as a
percentage of principal amount of 109.625%, plus accrued and unpaid interest to
the redemption date, with the net cash proceeds from one or more Public Equity
Offerings following which there is a Public Market; provided, however, that (1)
at least 65% of such aggregate principal amount of Securities remains
outstanding immediately after the occurrence of each such redemption (other than
Securities held, directly or indirectly, by the
8
Company or its Affiliates); and (2) each such redemption occurs within 60 days
after the date of the related Public Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount 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 Company to repurchase all or any part 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
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guaranty
The payment by the Company of the principal of, and premium
and interest on, the Securities is fully and unconditionally guaranteed on a
joint and several basis by each of the Subsidiary Guarantors to the extent set
forth in the Indenture.
9. Security
The Securities will be secured by a first-priority security
interest (subject to Permitted Liens) in the Notes Collateral and a
second-priority security interest (subject to Permitted Liens) in the Bank
Collateral. The Notes Collateral consists of substantially all the property,
plant and equipment associated with the
9
Mortgaged Properties. The Bank Collateral consists of 100% of the capital stock
of, or other equity interests in, certain existing and future domestic
subsidiaries and 65% of the capital stock of, or other equity interests in,
certain existing and future first-tier foreign subsidiaries and substantially
all of the other assets (other than the Notes Collateral), in each case that are
held by the Company or the Subsidiary Guarantors.
The Trustee and the Notes Collateral Agent, as the case may
be, hold the Collateral in trust for the benefit of the Trustee and the Holders,
in each case pursuant to the Security Documents, including the Intercreditor
Agreement. Each Holder, by accepting this Security, consents and agrees to the
terms of the Security Documents (including the provisions providing for the
foreclosure and release of Collateral) as the same may be in effect or may be
amended from time to time in accordance with its terms and authorizes and
directs the Notes Collateral Agent to enter into the Security Documents,
including the Intercreditor Agreement, and to perform its obligations and
exercise its rights thereunder in accordance therewith.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 principal amount 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 of
or exchange 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 or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes.
10
12. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall
be entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company 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.
14. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (a)
the Indenture, the Security Documents and the Securities may be amended with the
written consent of the Holders of at least a majority in principal amount
outstanding of the Securities and (b) 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 and the Intercreditor Agreement, with the consent of
66 2/3% in principal amount outstanding of the Securities, the Indenture and the
Security Documents may be amended to release any Collateral from the Lien of the
Indenture and the Security Documents, change the provisions applicable to the
application of the proceeds from the sale of Collateral and change or alter the
priority of the security interests in the Collateral. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company, the Subsidiary Guarantors and the Trustee shall be
entitled to amend the Indenture, the Security Documents or the Securities to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
5 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, including Subsidiary Guaranties, or to secure the Securities, or to
11
add additional covenants or surrender rights and powers conferred on the Company
or the Subsidiary Guarantors, or to comply with any requirement of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for
30 days in payment of interest on the Securities; (b) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $10.0 million; (e) certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; (f) certain
judgments or decrees for the payment of money in excess of $10.0 million; (g)
certain defaults with respect to Subsidiary Guaranties; and (h) certain defaults
relating to the Collateral under the Security Documents. If an Event of Default
occurs and is continuing, the 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 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 or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives indemnity or security
satisfactory to it. 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 the interest of the Holders.
12
16. Trustee Dealings with the Company
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 Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and
13
reliance may be placed only on the other identification numbers placed thereon.
21. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
22. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written
request and without charge to the Security holder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Jacuzzi Brands, Inc.
000 X. Xxxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Secretary
14
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:_____________________Your Signature:_______________________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
[ ] to the Company; or
(1) [ ] pursuant to an effective registration statement under the
Securities Act of 1933; or
(2) [ ] inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933)
15
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is being made in reliance on Rule 144A, in each
case pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [ ] outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
(4) [ ] pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however,
that if box (4) is checked, the Trustee shall be entitled to require,
prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Company has
reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act.
____________________________
Signature
Signature Guarantee:
_______________________________________ ____________________________
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or
16
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
17
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing
this Security for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A under the
Securities Act of 1933, and is aware that the sale to it is being made in
reliance on Rule 144A and acknowledges that it has received such information
regarding the Company as the undersigned has requested pursuant to Rule 144A or
has determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.
Dated:____________________ ___________________________________
Notice: To be executed by
an executive officer
18
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
Principal amount of Signature of
Amount of decrease Amount of increase this Global authorized officer
in Principal in Principal amount Security following of Trustee or
Date of amount of this of this Global such decrease or Securities
Exchange Global Security Security increase) Custodian
19
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.10 of the Indenture,
state the amount in principal amount: $________________
Dated:_______________________ Your Signature:__________________________
(Sign exactly as your name
appears on the other side
of this Security.)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
EXHIBIT A
FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY*/**/
-------------------------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**/. If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
2
JACUZZI BRANDS, INC.
9 5/8% SENIOR SECURED NOTES DUE 2010
No.___________________ $___________
Jacuzzi Brands, Inc., a Delaware corporation, promises to pay to
________________, or registered assigns, the principal sum of
______________________Dollars on July 1, 2010.
Interest Payment Dates: January 1 and July 1.
Record Dates: December 15 and June 15.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
JACUZZI bRANDS, INC.
by
_____________________________
Name:
Title:
by
_____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
WILMINGTON TRUST COMPANY,
not in its individual
capacity but solely as
Trustee, certifies that
this is one of the Securities
referred to in the Indenture.
by
_______________________________
Authorized Signatory
3
FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY
9 5/8% Senior Secured Note due 2010
1. Interest
Jacuzzi Brands, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
Security at the rate per annum shown above[; PROVIDED, HOWEVER, THAT IF A
REGISTRATION DEFAULT (AS DEFINED IN THE REGISTRATION RIGHTS AGREEMENT) OCCURS,
ADDITIONAL INTEREST WILL ACCRUE ON THIS SECURITY AT A RATE OF 0.25% PER ANNUM
(INCREASING BY AN ADDITIONAL 0.25% PER ANNUM AFTER EACH CONSECUTIVE 90-DAY
PERIOD THAT OCCURS AFTER THE DATE ON WHICH SUCH REGISTRATION DEFAULT OCCURS UP
TO A MAXIMUM ADDITIONAL INTEREST RATE OF 1.00%) FROM AND INCLUDING THE DATE ON
WHICH ANY SUCH REGISTRATION DEFAULT SHALL OCCUR TO BUT EXCLUDING THE DATE ON
WHICH ALL REGISTRATION DEFAULTS HAVE BEEN CURED.](4) The Company will pay
interest semiannually on January 1 and July 1 of each year, commencing January
1, 2004. 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 July 15,
2003. Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal at the rate borne by
this Security plus 1.0% per annum, and it will pay interest on overdue
installments of interest at the same rate to the extent lawful.
2. Method of Payment
The Company 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 December 15 or June 15 next preceding the interest payment
date even if Securities are canceled after the
---------------------
4 Insert if at the date of issuance of the Exchange Security or Private Exchange
Security (as the case may be) any Registration Default has occurred with respect
to the related Initial Securities during the interest period in which such date
of issuance occurs.
4
record date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time of payment
is legal tender for payment of public and private debts. Payments in respect of
the Securities represented by a Global Security (including principal, premium
and interest) will be made by wire transfer of immediately available funds to
the accounts specified by The Depository Trust Company. The Company will make
all payments in respect of a certificated Security (including principal, premium
and interest) by mailing a check to the registered address of each Holder
thereof; provided, however, that payments on a certificated Security will be
made by wire transfer to a U.S. dollar account maintained by the payee with a
bank in the United States if such Holder elects payment by wire transfer by
giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
Initially, Wilmington Trust Company, a Delaware corporation, not in its
individual capacity but solely as trustee (the "Trustee"), will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice. The Company or any of its domestically
incorporated Wholly Owned Subsidiaries may act as Paying Agent, Registrar or
co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of July
15, 2003 ("Indenture"), among the Company, the Subsidiary Guarantors 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.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"Act"). Terms defined in the Indenture 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.
5
The Securities are general secured obligations of the Company limited
to $380.0 million aggregate principal amount (subject to Section 2.07 of the
Indenture). The Initial Securities issued on the Issue Date and all Exchange
Securities or Private Exchange Securities issued in exchange therefor will be
treated as a single class for all purposes under the Indenture. The Indenture
contains covenants that limit the ability of the Company and its subsidiaries to
incur additional indebtedness; pay dividends or distributions on, or redeem or
repurchase capital stock; make investments; issue or sell capital stock of
subsidiaries; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; consolidate, merge or transfer all or substantially
all of its assets and the assets of its subsidiaries; engage in sale/leaseback
transactions; and materially impair the security interest in the Collateral.
These covenants are subject to important exceptions and qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be entitled to redeem
the Securities.
On and after July 1, 2007, the Company shall be entitled at its option
to redeem all or a portion of the Securities upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed in percentages of principal
amount, on the redemption date) plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date),
if redeemed during the 12-month period commencing on July 1 of the
years set forth below:
Redemption
Period Price
------ ----------
2007 104.813%
2008 102.406%
2009 and thereafter 100.000%
In addition, prior to July 1, 2006, the Company shall be entitled at
its option on one or more occasions to redeem Securities in an aggregate
principal amount not to
6
exceed 35% of the aggregate principal amount of the Securities originally issued
at a redemption price (expressed as a percentage of principal amount of
109.625%, plus accrued and unpaid interest to the redemption date, with the net
cash proceeds from one or more Public Equity Offerings following which there is
a Public Market; provided, however, that (1) at least 65% of such aggregate
principal amount of Securities remains outstanding immediately after the
occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption
occurs within 60 days after the date of the related Public Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount 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 Company to repurchase all or any part 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
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guaranty
The payment by the Company of the principal of, and premium and
interest on, the Securities is fully and unconditionally guaranteed on a joint
and several basis by
7
each of the Subsidiary Guarantors to the extent set forth in the Indenture.
9. Security
The Securities will be secured by a first-priority security interest
(subject to Permitted Liens) in the Notes Collateral and a second-priority
security interest (subject to Permitted Liens) in the Bank Collateral. The Notes
Collateral consists of substantially all the property, plant and equipment
associated with the Mortgaged Properties. The Bank Collateral consists of 100%
of the capital stock of, or other equity interests in, certain existing and
future domestic subsidiaries and 65% of the capital stock of, or other equity
interests in, certain existing and future first-tier foreign subsidiaries and
substantially all of the other assets (other than the Notes Collateral), in each
case that are held by the Company or the Subsidiary Guarantors.
The Trustee and the Notes Collateral Agent, as the case may be, hold
the Collateral in trust for the benefit of the Trustee and the Holders, in each
case pursuant to the Security Documents, including the Intercreditor Agreement.
Each Holder, by accepting this Security, consents and agrees to the terms of the
Security Documents (including the provisions providing for the foreclosure and
release of Collateral) as the same may be in effect or may be amended from time
to time in accordance with its terms and authorizes and directs the Notes
Collateral Agent to enter into the Security Documents, including the
Intercreditor Agreement, and to perform its obligations and exercise its rights
thereunder in accordance therewith.
10. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 principal amount 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 of or exchange 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
8
Securities to be redeemed or 15 days before an interest payment date.
11. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
12. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its request unless an abandoned property law designates another Person. After
any such payment, Holders entitled to the money must look only to the Company
and not to the Trustee for payment.
13. Discharge and Defeasance
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company 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.
14. Amendment; Waiver
Subject to certain exceptions set forth in the Indenture, (1) the
Indenture, the Security Documents and the Securities may be amended with the
written consent of the Holders of at least a majority in principal amount
outstanding of the Securities and (2) 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 and the Intercreditor Agreement, with the consent of
66?% in principal amount outstanding of the Securities, the Indenture and the
Security Documents may be amended to release any Collateral from the Lien of the
Indenture and the Security Documents, change the provisions applicable to the
application of the proceeds from the sale of Collateral and change or alter the
priority of the security interests in the Collateral. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company the
9
Subsidiary Guarantors and the Trustee shall be entitled to amend the Indenture,
the Security Documents or the Securities to cure any ambiguity, omission, defect
or inconsistency, or to comply with Article 5 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, including
Subsidiary Guaranties, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company or the
Subsidiary Guarantors, or to comply with any requirement of the SEC in
connection with qualifying the Indenture under the Act, or to make any change
that does not adversely affect the rights of any Securityholder.
15. Defaults and Remedies
Under the Indenture, Events of Default include (a) default for 30 days
in payment of interest on the Securities; (b) default in payment of principal on
the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (c) failure by the Company or any
Subsidiary Guarantor to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company if the amount accelerated (or so
unpaid) exceeds $10.0 million; (e) certain events of bankruptcy or insolvency
with respect to the Company and the Significant Subsidiaries; (f) certain
judgments or decrees for the payment of money in excess of $10.0 million; (g)
certain defaults with respect to Subsidiary Guaranties; and (h) certain defaults
relating to the Collateral under the Security Documents. If an Event of Default
occurs and is continuing, the 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 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 or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives indemnity or security
10
satisfactory to it. 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 the interest of the Holders.
16. Trustee Dealings with the Company
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 Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
18. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
19. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
11
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
21. Holders' Compliance with Registration Rights Agreement
Each Holder of a Security, by acceptance hereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.](5)
22. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written
request and without charge to the Security holder a copy of the Indenture which
has in it the text of this Security in larger type. Requests may be made to:
Jacuzzi Brands, Inc.
000 X. Xxxxxxx Xxxxx, Xxxxx 0000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Secretary
--------------------
(5) Delete if this Security is not being issued in exchange for an Initial
Security.
12
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
________________________________________________________________________________
Date:_______________________Your Signature:_____________________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 or 4.10 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.10 of the Indenture,
state the amount in principal amount: $_______________
Dated:___________________ Your Signature:________________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
