EXHIBIT 4.1
EXECUTION COPY
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INDENTURE,
Dated as of November 1, 2004,
among
HAWK CORPORATION,
as Issuer,
THE GUARANTORS NAMED HEREIN,
as Guarantors,
and
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
8-3/4% SENIOR NOTES DUE 2014
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CROSS-REFERENCE TABLE
TIA INDENTURE
SECTION SECTION
------- -------
310(a)(1)........................................................................ 7.10(a)
(a)(2)....................................................................... 7.10(a)
(a)(3)....................................................................... 7.10(a)
(a)(4)....................................................................... N.A.
(a)(5)....................................................................... 7.10(a)
(b).......................................................................... 7.03; 7.08; 7.10(a)
(c).......................................................................... N.A.
311(a)........................................................................... 7.03; 7.11
(b).......................................................................... 7.03; 7.11
312(a)........................................................................... 2.05
(b).......................................................................... 7.07; 11.03
(c).......................................................................... 11.03
313(a)........................................................................... 7.06
(b).......................................................................... 7.06
(c).......................................................................... 7.06
(d).......................................................................... 7.06
314(a)........................................................................... 4.06; 4.18
(b).......................................................................... 12.02
(c)(1)....................................................................... 4.06; 11.04
(c)(2)....................................................................... 11.04
(c)(3)....................................................................... 4.06
(d).......................................................................... 12.03(c)
(e).......................................................................... 11.05
(f).......................................................................... N.A.
315(a)........................................................................... 7.01(b)
(b).......................................................................... 7.05
(c).......................................................................... 7.01(a)
(d).......................................................................... 7.01(c)
(e).......................................................................... 6.11
316(a)(last sentence)............................................................ 2.09
(a)(1)(A).................................................................... 6.05
(a)(1)(B).................................................................... 6.04
(a)(2)....................................................................... N.A.
(b).......................................................................... 6.07
(c).......................................................................... 9.04
317(a)(1)........................................................................ 6.08
(a)(2)....................................................................... 6.09
(b).......................................................................... 2.04
318(a)........................................................................... 11.01
(b).......................................................................... N.A.
(c).......................................................................... 11.01
--------------------
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
PAGE
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE................................................ 1
Section 1.01. Definitions...................................................................... 1
Section 1.02. Incorporation by Reference of Trust Indenture Act................................ 23
Section 1.03. Rules of Construction............................................................ 23
ARTICLE TWO THE NOTES................................................................................. 24
Section 2.01. Form and Dating.................................................................. 24
Section 2.02. Execution and Authentication; Aggregate Principal Amount......................... 25
Section 2.03. Registrar and Paying Agent....................................................... 26
Section 2.04. Obligations of Paying Agent...................................................... 26
Section 2.05. Holder Lists..................................................................... 26
Section 2.06. Transfer and Exchange............................................................ 27
Section 2.07. Replacement Notes................................................................ 27
Section 2.08. Outstanding Notes................................................................ 27
Section 2.09. Treasury Notes; When Notes are Disregarded....................................... 28
Section 2.10. Temporary Notes.................................................................. 28
Section 2.11. Cancellation..................................................................... 28
Section 2.12. CUSIP Numbers.................................................................... 29
Section 2.13. Deposit of Moneys................................................................ 29
Section 2.14. Book-Entry Provisions for Global Notes........................................... 29
Section 2.15. Special Transfer Provisions...................................................... 30
Section 2.16. Transfers of Global Notes and Physical Notes..................................... 32
ARTICLE THREE REDEMPTION................................................................................ 32
Section 3.01. Optional Redemption.............................................................. 32
Section 3.02. Selection of Notes to be Redeemed................................................ 32
Section 3.03. Notice of Redemption............................................................. 33
Section 3.04. Effect of Notice of Redemption................................................... 34
Section 3.05. Deposit of Redemption Price...................................................... 34
Section 3.06. Notes Redeemed in Part........................................................... 34
ARTICLE FOUR COVENANTS................................................................................. 34
Section 4.01. Payment of Notes................................................................. 34
Section 4.02. Maintenance of Office or Agency.................................................. 35
Section 4.03. Corporate Existence.............................................................. 35
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.04. Payment of Taxes and Other Claims................................................ 35
Section 4.05. Maintenance of Properties and Insurance; Compliance with Laws.................... 35
Section 4.06. Compliance Certificate; Notice of Default........................................ 36
Section 4.07. Waiver of Stay, Extension or Usury Laws.......................................... 36
Section 4.08. Limitation on Incurrence of Additional Indebtedness.............................. 37
Section 4.09. Limitation on Restricted Payments................................................ 37
Section 4.10. Limitation on Asset Sales........................................................ 40
Section 4.11. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.......................................................... 42
Section 4.12. Limitation on Issuances and Sales of Preferred Stock of Subsidiaries............. 44
Section 4.13. Limitation on Liens.............................................................. 44
Section 4.14. Limitations on Transactions with Affiliates...................................... 44
Section 4.15. Additional Subsidiary Guarantees................................................. 45
Section 4.16. Conduct of Business.............................................................. 45
Section 4.17. Reports to Holders............................................................... 46
Section 4.18. Payments for Consent............................................................. 46
Section 4.19. Repurchase Upon Change of Control................................................ 47
Section 4.20. Additional Interest.............................................................. 48
ARTICLE FIVE SUCCESSOR CORPORATION..................................................................... 49
Section 5.01. Merger, Consolidation and Sale of Assets......................................... 49
Section 5.02. Successor Entity Substituted..................................................... 50
ARTICLE SIX DEFAULT AND REMEDIES...................................................................... 50
Section 6.01. Events of Default................................................................ 50
Section 6.02. Acceleration..................................................................... 51
Section 6.03. Other Remedies................................................................... 52
Section 6.04. Waiver of Past Defaults.......................................................... 52
Section 6.05. Control by Majority.............................................................. 52
Section 6.06. Limitation on Suits.............................................................. 53
Section 6.07. Rights of Holders to Receive Payment............................................. 53
Section 6.08. Collection Suit by Trustee....................................................... 53
Section 6.09. Trustee May File Proofs of Claim................................................. 54
Section 6.10. Priorities....................................................................... 54
Section 6.11. Undertaking for Costs............................................................ 54
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TABLE OF CONTENTS
(continued)
PAGE
Section 6.12. Restoration of Rights and Remedies............................................... 55
ARTICLE SEVEN TRUSTEE................................................................................... 55
Section 7.01. Duties of Trustee................................................................ 55
Section 7.02. Rights of Trustee................................................................ 56
Section 7.03. Individual Rights of Trustee..................................................... 57
Section 7.04. Trustee's Disclaimer............................................................. 57
Section 7.05. Notice of Default................................................................ 58
Section 7.06. Reports by Trustee to Holders.................................................... 58
Section 7.07. Compensation and Indemnity....................................................... 58
Section 7.08. Replacement of Trustee........................................................... 59
Section 7.09. Successor Trustee by Merger, Etc................................................. 60
Section 7.10. Eligibility; Disqualification.................................................... 60
Section 7.11. Preferential Collection of Claims Against Company................................ 61
Section 7.12. Trustee as Paying Agent.......................................................... 61
Section 7.13. Form of Documents Delivered to Trustee........................................... 61
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE................................................... 61
Section 8.01. Legal Defeasance and Covenant Defeasance......................................... 61
Section 8.02. Satisfaction and Discharge....................................................... 64
Section 8.03. Survival of Certain Obligations.................................................. 64
Section 8.04. Acknowledgment of Discharge by Trustee........................................... 64
Section 8.05. Application of Trust Moneys...................................................... 65
Section 8.06. Repayment to the Company; Unclaimed Money........................................ 65
Section 8.07. Reinstatement.................................................................... 65
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS....................................................... 66
Section 9.01. Without Consent of Holders....................................................... 66
Section 9.02. With Consent of Holders.......................................................... 66
Section 9.03. Compliance with TIA.............................................................. 67
Section 9.04. Revocation and Effect of Consents................................................ 68
Section 9.05. Notation on or Exchange of Notes................................................. 68
Section 9.06. Trustee to Sign Amendments, Etc.................................................. 68
Section 9.07. Conformity with Trust Indenture Act.............................................. 69
ARTICLE TEN GUARANTEE................................................................................. 69
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TABLE OF CONTENTS
(continued)
PAGE
Section 10.01. Guarantee........................................................................ 69
Section 10.02. Release of a Guarantor........................................................... 70
Section 10.03. Limitation of Guarantor's Liability.............................................. 70
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms............................... 71
Section 10.05. Contribution..................................................................... 71
Section 10.06. Waiver of Subrogation............................................................ 71
Section 10.07. Waiver of Stay, Extension or Usury Laws.......................................... 71
ARTICLE ELEVEN MISCELLANEOUS............................................................................. 72
Section 11.01. Trust Indenture Act Controls..................................................... 72
Section 11.02. Notices.......................................................................... 72
Section 11.03. Communications by Holders with Other Holders..................................... 73
Section 11.04. Certificate and Opinion as to Conditions Precedent............................... 73
Section 11.05. Statements Required in Certificate or Opinion.................................... 73
Section 11.06. Rules by Trustee, Paying Agent, Registrar........................................ 73
Section 11.07. Legal Holidays................................................................... 73
Section 11.08. Governing Law.................................................................... 74
Section 11.09. No Adverse Interpretation of Other Agreements.................................... 74
Section 11.10. No Recourse Against Others....................................................... 74
Section 11.11. Successors....................................................................... 74
Section 11.12. Duplicate Originals.............................................................. 74
Section 11.13. Severability..................................................................... 74
Section 11.14. Waiver of Jury Trial............................................................. 75
Exhibit A - Form of Initial Note............................................................ A
Exhibit B - Form of Exchange Note............................................................ B
Exhibit C - Form of Legend for Global Notes.................................................. C
Exhibit D - Form of Certificate to Be Delivered in Connection with Transfers to
Non-QIB Accredited Investors................................................... D
Exhibit E - Form of Certificate to Be Delivered in Connection with Transfers
Pursuant to Regulation S...................................................... E
NOTE: This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
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INDENTURE, dated as of November 1, 2004, among Hawk Corporation, a
Delaware corporation (the "Company"), the Guarantors (as herein defined) and
HSBC Bank USA, National Association, as Trustee (in such capacity, the
"Trustee").
WITNESSETH:
WHEREAS, the Company has duly authorized the creation of the Notes and, to
provide therefor, the Company and the Guarantors have duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all things necessary to make the Notes, when duly issued and
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid and binding
agreement of each of the Company and the Guarantors, have been done.
NOW, THEREFORE, each party hereto agrees as follows for the benefit of the
other parties and for the equal and ratable benefit of the Holders:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"Acceleration Notice" has the meaning set forth in Section 6.02.
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with or into the Company or
any of its Restricted Subsidiaries or assumed in connection with the acquisition
of assets from such Person and in each case not incurred by such Person in
connection with, or in anticipation or contemplation of, such Person becoming a
Restricted Subsidiary of the Company or such acquisition, merger or
consolidation and which Indebtedness is without recourse to the Company or any
of its Subsidiaries or to any of their respective properties or assets other
than the Person or the assets to which such Indebtedness related prior to the
time such Person became a Restricted Subsidiary of the Company or the time of
such acquisition, merger or consolidation.
"Additional Interest" has the meaning set forth in the Registration Rights
Agreement.
"Additional Notes" means all 8-3/4% Senior Notes due 2014 issued after the
Issue Date (other than pursuant to Sections 2.06, 2.07, 2.10 and 3.06 of this
Indenture and other than Exchange Notes) from time to time in accordance with
the terms of this Indenture, including, without limitation, the provisions of
Sections 2.02 and 4.08.
"Affiliate" means, with respect to any specified Person, any other Person
who directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such specified Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; provided,
that Beneficial Ownership of 10% or more of the Voting Stock of the Person shall
be deemed to be control. The terms "controlling" and "controlled" have meanings
correlative of the foregoing.
"Affiliate Transaction" has the meaning set forth in Section 4.14(a).
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Agent Members" has the meaning set forth in Section 2.14 and means, with
respect to DTC, Euroclear or Clearstream, a Person who has an account with DTC,
Euroclear or Clearstream, respectively (and with respect to DTC, shall include
Euroclear and Clearstream).
"Applicable Indebtedness" means Indebtedness that is pari passu in right
of payment with the Notes.
"Applicable Procedures" means, with respect to any transfer or exchange of
or for beneficial interests in any Global Note, the rules and procedures of DTC,
Euroclear and Clearstream that apply to such transfer or exchange.
"Asset Acquisition" means:
(1) an Investment by the Company or any Restricted Subsidiary of the
Company in any other Person pursuant to which such Person shall become a
Restricted Subsidiary of the Company or any Restricted Subsidiary of the
Company, or shall be merged with or into the Company or any Restricted
Subsidiary of the Company; or
(2) the acquisition by the Company or any Restricted Subsidiary of
the Company of the assets of any Person (other than a Restricted
Subsidiary of the Company) which constitute all or substantially all of
the assets of such Person or comprise any division or line of business of
such Person or any other properties or assets of such Person other than in
the ordinary course of business.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business), assignment or other transfer (other than a Lien in accordance with
this Indenture) for value by (x) the Company or any of its Restricted
Subsidiaries to any Person other than the Company or a Guarantor or (y) a
Foreign Restricted Subsidiary to any Person other than the Company, a Guarantor
or a Wholly-Owned Subsidiary of the Company of:
(1) any Capital Stock of any Restricted Subsidiary of the Company
(other than directors' qualifying shares); or
(2) any other property or assets of the Company or any Restricted
Subsidiary of the Company other than in the ordinary course of business;
provided, however, that Asset Sales shall not include:
(a) a transaction or series of related transactions for which the
Company or its Restricted Subsidiaries receive aggregate consideration of
less than $1,000,000;
(b) the sale, lease, conveyance, disposition or other transfer of
all or substantially all of the assets of the Company as permitted under
Section 5.01;
(c) any Restricted Payment permitted under Section 4.09, including a
Permitted Investment;
(d) the sale of Cash Equivalents; and
2
(e) the sale or other disposition of used, worn out, obsolete or
surplus equipment.
"Authenticating Agent" has the meaning set forth in Section 2.02.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended, and
codified as 11 U.S.C. Sections 101 et seq.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have meanings correlative to the
foregoing.
"Board of Directors" means, as to any Person, the board of directors or
similar governing body of such Person or any duly authorized committee thereof.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" means:
(1) with respect to any Person that is a corporation, any and all
shares, interests, participations or other equivalents (however designated
and whether or not voting) of corporate stock, including each class of
Common Stock and Preferred Stock of such Person;
(2) with respect to any Person that is not a corporation, any and
all partnership, membership or other equity interests of such Person; and
(3) any warrants, rights or options to purchase any of the
instruments or interests referred to in clause (1) or (2) above.
"Capitalized Lease Obligation" means, as to any Person, the obligations of
such Person under a lease that are required to be classified and accounted for
as capital lease obligations under GAAP and, for purposes of this definition,
the amount of such obligations at any date shall be the capitalized amount of
such obligations at such date, determined in accordance with GAAP.
"Cash Equivalents" means:
(1) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency
thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof;
(2) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one
3
of the two highest ratings obtainable from either Standard & Poor's
Ratings Group ("S&P") or Xxxxx'x Investors Service, Inc. ("Moody's");
(3) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at
least A-1 from S&P or at least P-1 from Moody's;
(4) certificates of deposit or bankers' acceptances (or, with
respect to foreign banks, similar instruments) maturing within one year
from the date of acquisition thereof issued by any bank organized under
the laws of the United States of America or any state thereof or the
District of Columbia or any U.S. branch of a foreign bank having at the
date of acquisition thereof combined net capital and surplus of not less
than $250,000,000;
(5) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clause (1) above
entered into with any bank meeting the qualifications specified in clause
(4) above; and
(6) investments in money market funds which invest substantially all
their assets in securities of the types described in clauses (1) through
(5) above.
"Cash Flow" means, with respect to any Person for any period, Consolidated
Net Income for such Person for such period, plus, without duplication, to the
extent deducted in computing such Consolidated Net Income:
(1) provision for taxes based on income or profits and any provision
for taxes utilized in computing gains and losses, including extraordinary
gains and losses; plus
(2) Consolidated Interest Expense; plus
(3) depreciation, amortization and all other non-cash charges,
including all amortization of intangibles, deferred financing charges,
consent incentives paid with respect to the tender offer and consent
solicitation relating to the Company's 12% Senior Notes due 2006, and
non-cash charges relating to incentive programs for executive officers of
the Company, but excluding any such non-cash charge to the extent it
represents an accrual of a reserve, cash charges in any future period or
amortization of a pre-paid cash expense that was paid in a prior period
not included in the prior calculation); plus
(4) any non-recurring fees, charges or other expenses made or
incurred by the Company in connection with the Offering as described in
the Offering Circular dated October 25, 2004;
provided that if any Restricted Subsidiary is not a wholly owned Restricted
Subsidiary of the Company, then Cash Flow shall be reduced (to the extent not
otherwise reduced in accordance with GAAP) by an amount equal to (a) the amount
of Cash Flow attributable to such Restricted Subsidiary, multiplied by (b) the
percentage ownership interest in such Restricted Subsidiary not owned by the
Company or any of its Restricted Subsidiaries on the last day of such period.
"Change of Control" means the occurrence of one or more of the following
events:
(1) any direct or indirect sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one
transaction or a series of related transactions, of
4
all or substantially all of the assets of the Company to any Person or
group of related Persons for purposes of Section 13(d) of the Exchange Act
(a "Group") other than any or all of the Permitted Holders;
(2) the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or into, the
Company, other than any such transaction where the Voting Stock of the
Company outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified Capital Stock)
of the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance);
(3) the approval by the holders of Capital Stock of the Company of
any plan or proposal for the liquidation, winding up or dissolution of the
Company;
(4) any Person or Group (other than any or all of the Permitted
Holders) is or becomes the Beneficial Owner, directly or indirectly, in
the aggregate of more than 35% of the total voting power of the Voting
Stock of the Company; or
(5) 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 stockholders of the
Company was approved pursuant to a vote or written consent of a majority
of the directors 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.
Notwithstanding anything to the contrary in the immediately preceding sentence,
none of the events described in clause (1), (2) or (4) thereof shall be deemed
to constitute a "Change of Control" if in connection with such event:
(A) the Company engaged in a "Rule 13e-3 transaction" (as such term
is defined in Rule 13e-3(a)(3) under the Exchange Act);
(B) immediately after giving effect thereto and all other
transactions related thereto occurring on the date thereof (including the
making of any dividend or distribution and the repayment or incurrence, if
any, of any Indebtedness), (i) the Consolidated Leverage Ratio of the
Company (or if the Company consolidates with, or mergers with or into, any
Person, or any Person consolidates with, or mergers with or into, the
Company, the surviving or transferee Person) is less than 3.5 to 1.0 on a
pro forma basis and (ii) no Default or Event of Default shall have
occurred and be continuing; and
(C) the person who is the Chairman of the Board of the Company on
the Issue Date holds the position of Chairman of the Board, Chief
Executive Officer or President of the Company (or such surviving or
transferee Person) immediately after giving effect thereto
"Change of Control Offer" has its meaning set forth in Section 4.19(a).
"Change of Control Payment Date" has its meaning set forth in Section
4.19(b)(2).
"Clearstream" means Clearstream Banking, societe anonyme and its
successors.
5
"Common Stock" of any Person means any and all shares, interests or other
participations in, and other equivalents (however designated and whether voting
or non-voting) of such Person's common stock, whether outstanding on the Issue
Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"Company" has the meaning set forth in the preamble to this Indenture.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
ratio of:
(1) the aggregate amount of Cash Flow for such period; to
(2) Consolidated Interest Expense for such period, determined on a
pro forma basis after giving pro forma effect to:
(a) the incurrence of the Indebtedness giving rise to the
calculation of the Consolidated Fixed Charge Coverage Ratio and (if
applicable) the application of the net proceeds therefrom, including
to refinance other Indebtedness, as if such Indebtedness was
incurred, and the application of such proceeds occurred, at the
beginning of such period;
(b) the incurrence, repayment or retirement of any other
Indebtedness by the Company and its Restricted Subsidiaries since
the first day of such period as if such Indebtedness was incurred,
repaid or retired at the beginning of such period (except that, in
making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average
balance of such Indebtedness at the end of each month during such
period);
(c) in the case of Acquired Indebtedness, the related
acquisition as if such acquisition had occurred at the beginning of
such period; and
(d) any acquisition or disposition by the Company and its
Restricted Subsidiaries of any Company or any business or any assets
out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such period,
assuming such acquisition or disposition had been consummated on the
first day of such period.
In addition, for purposes of calculating Cash Flow, acquisitions by the
Company or any Restricted Subsidiaries, including through mergers or
consolidations, during the period or that relate to the incurrence of the
Indebtedness giving rise to the calculation of the Consolidated Fixed Charge
Coverage Ratio shall be deemed to have occurred at the beginning of the period.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the aggregate of the interest expense of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, as determined in
accordance with GAAP, and including, without duplication:
(1) all amortization or accretion of original issue discount;
(2) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period;
6
(3) net cash costs under all Interest Swap Obligations (including
amortization of fees); and
(4) dividends paid on Disqualified Capital Stock.
"Consolidated Leverage Ratio" means, with respect to any Person, as of any
date, the ratio of (i) the excess of (A) Consolidated Total Debt of such Person
and its Restricted Subsidiaries as of such date over (B) Unrestricted Cash of
such Person and its Restricted Subsidiaries as of such date to (ii) Cash Flow of
such Person and its Restricted Subsidiaries for the four consecutive full fiscal
quarters of such Person most recently ending on or prior to such date for which
financial statements are available.
"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate net income (or loss) of such Person and its Restricted
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP, adjusted to the extent included in calculating such net income (or
loss), by excluding, without duplication:
(1) after-tax gains and losses from Asset Sales or abandonments or
reserves relating thereto, or from idle asset reserves;
(2) after-tax items classified as extraordinary gains or losses;
(3) the net income (but not loss) of any Restricted Subsidiary of
the referent Person to the extent that the declaration of dividends or
similar distributions by such Restricted Subsidiary of such income is
restricted by a contract, operation of law or otherwise;
(4) the net income of any Person, other than the referent Person or
a Restricted Subsidiary of the referent Person, except to the extent of
cash dividends or distributions paid to the referent Person or to a
wholly-owned Restricted Subsidiary of the referent Person by such Person;
(5) any restoration to income of any material contingency reserve,
except to the extent that provision for such reserve was made out of
Consolidated Net Income accrued at any time following the Issue Date, and
except for any idle asset reserves;
(6) income or loss attributable to discontinued operations
(including, without limitation, operations disposed of during such period
whether or not such operations were classified as discontinued);
(7) all gains and losses realized on or because of the purchase or
other acquisition by such Person or any of its Restricted Subsidiaries
after the Issue Date of any securities of such Person or any of its
Restricted Subsidiaries;
(8) the cumulative effect of a change in accounting principles;
(9) interest expense attributable to dividends on Qualified Capital
Stock pursuant to Statement of Financial Accounting Standards No. 150,
"Accounting for Certain Financial Instruments with Characteristics of both
Liabilities and Equity";
(10) non-cash charges resulting from the impairment of intangible
assets; and
7
(11) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's
assets, any earnings of the successor corporation prior to such
consolidation, merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of the Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Capital Stock of such Person.
"Consolidated Total Debt" means, with respect to any Person, as of any
date, the aggregate principal amount of consolidated Indebtedness of such Person
and its Restricted Subsidiaries of the nature referred to in clauses (1), (2),
(3), (4), (5) and (9) of the definition of the term "Indebtedness".
"Corporate Trust Office" means the office of HSBC Bank, National
Association at which the corporate trust business of the Trustee shall, at any
particular time, be principally administered, which office is, at the date of
this Indenture, located at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Corporate Trust, or such other address as the Trustee may designate
from time to time by notice to the Holders and the Issuer, or the principal
corporate trust office of any successor Trustee (or such other address as such
successor Trustee may designate from time to time by notice to the Holders and
the Issuer).
"Covenant Defeasance" has the meaning set forth in Section 8.01(c).
"Credit Agreement" means the credit agreement dated as of the Issue Date,
among the Company, the lenders party thereto (together with their successors and
assigns, the "Lenders") and KeyBank National Association, as administrative
agent, setting forth the terms and conditions of the new bank facility, together
with the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended, supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder (provided that such increase in borrowings is permitted under clause
(2), (8), (11), (12) or (19) of the definition of "Permitted Indebtedness") or
adding Subsidiaries of the Company as additional borrowers or guarantors
thereunder) all or any portion of the Indebtedness under such agreement or any
successor or replacement agreement and whether by the same or any other agent,
lender or group of lenders.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement designed to protect the
Company or any Restricted Subsidiary of the Company against fluctuations in
currency values.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Code.
"Default" means an event or condition the occurrence of which is, or with
the lapse of time or the giving of notice or both would be, an Event of Default.
"Depository" means DTC, its nominees and successors.
"Disqualified Capital Stock" means that portion of 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
thereof), or upon the happening of any event (other than an event that would
constitute a Change of Control), matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the sole option
of the holder thereof (except in each case, upon the occurrence of a
8
Change of Control) on or prior to the first anniversary of the final maturity
date of the Notes for cash or is convertible into or exchangeable for debt
securities of the Company or its Subsidiaries at any time prior to such
anniversary.
"Domestic Restricted Subsidiary" means, with respect to any Person, a
Domestic Subsidiary of such Person that is a Restricted Subsidiary of such
Person.
"Domestic Subsidiary" means, with respect to any Person, a Subsidiary of
such Person that is not a Foreign Subsidiary of such Person.
"DTC" means The Depositary Trust Company, its nominees and successors.
"Equity Offering" means an underwritten public offering of Common Stock of
the Company or any holding company of the Company pursuant to a registration
statement filed with the SEC (other than on Form S-8) or any private placement
of Common Stock of the Company or any holding company of the Company to any
Person other than issuances upon exercise of options by employees of any holding
company, the Company or any of the Restricted Subsidiaries.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
system and its successors.
"Event of Default" has the meaning set forth in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Exchange Notes" means the 8-3/4% Senior Notes due 2014 issued in exchange
for the Initial Notes or Additional Notes pursuant to the terms of a
Registration Rights Agreement.
"Exchange Offer" means an exchange offer that may be made by the Company,
pursuant to the Registration Rights Agreement, to exchange for any and all the
Initial Notes or Additional Notes a like aggregate principal amount of Exchange
Notes having substantially identical terms to the Initial Notes or Additional
Notes registered under the Securities Act.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in 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 shall be determined by the Board of Directors of the Company acting in
good faith and, where required by this Indenture, shall be evidenced by a Board
Resolution of the Board of Directors of the Company delivered to the Trustee.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary that is
organized under the laws of any jurisdiction other than the United States of
America, any state thereof or the District of Columbia.
"Foreign Subsidiary" means, with respect to any Person, any Subsidiary of
such Person that is organized under the laws of any jurisdiction other than the
United States of America, any state thereof or the District of Columbia.
"GAAP" means accounting principles generally accepted in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or
9
in such other statements by such other entity as may be approved by a
significant segment of the accounting profession of the United States, which are
in effect as of the Issue Date.
"Global Notes" means, collectively, the 144A Global Notes, the IAI Global
Notes, the Regulation S Permanent Global Notes and the Regulation S Temporary
Global Notes.
"Group" has the meaning set forth in the definition of the term "Change of
Control".
"Guarantee" has the meaning set forth in Section 10.01.
"Guarantor" means (1) each of the Company's Domestic Restricted
Subsidiaries existing on the Issue Date and (2) each of the Company's Domestic
Restricted Subsidiaries that in the future executes a supplemental indenture in
which such Domestic Restricted Subsidiary agrees to be bound by the terms of
this Indenture as a Guarantor; provided that any Person constituting a Guarantor
as described above shall cease to constitute a Guarantor when its respective
Guarantee is released in accordance with the terms of this Indenture.
"Holder" means the Person in whose name a Note is registered on the
registrar's books.
"IAI Global Notes" has the meaning set forth in Section 2.01.
"incur" has the meaning set forth in Section 4.08.
"Indebtedness" means with respect to any Person, without duplication:
(1) all Obligations of such Person for borrowed money;
(2) all Obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all Obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations and all
Obligations under any title retention agreement (but excluding trade
accounts payable and other accrued liabilities arising in the ordinary
course of business that are not overdue by 90 days or more or are being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and any deferred purchase price represented by earn
outs consistent with the Company's past practice);
(5) all Obligations for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction,
whether or not then due;
(6) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (1) through (5) above and clause (8)
below;
(7) all Obligations of any other Person of the type referred to in
clauses (1) through (6) above that are secured by any Lien (other than a
Permitted Lien not securing any liability that would itself constitute
Indebtedness) on any property or asset of such Person, the amount of any
such Obligation being deemed to be the lesser of the Fair Market Value of
the property or asset securing such Obligation or the amount of such
Obligation;
10
(8) all Interest Swap Obligations and all Obligations under Currency
Agreements of such Person; and
(9) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock
being equal to the greater of its voluntary or involuntary liquidation
preference and its maximum fixed repurchase price, but excluding accrued
dividends, if any.
For purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified
Capital Stock, such Fair Market Value shall be determined reasonably and in good
faith by the Board of Directors of the issuer of such Disqualified Capital
Stock.
"Indemnified Party" has the meaning set forth in Section 7.07.
"Indenture" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"Indenture Documents" means, collectively, this Indenture, the Notes
and the Guarantees.
"Independent Financial Advisor" means a nationally-recognized
accounting, appraisal or investment banking firm: (1) that does not, and
whose directors, officers and employees or Affiliates do not, have a
direct or indirect financial interest in the Company; and (2) that, in the
judgment of the Board of Directors of the Company, is otherwise
independent and qualified to perform the task for which it is to be
engaged.
"Initial Notes" means the 8-3/4% Senior Notes due 2014 issued on the
Issue Date.
"Initial Purchaser" means Xxxxxxxxx & Company, Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as such term is defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act.
"Interest Payment Date" means the stated maturity of an installment
of interest on the Notes.
"Interest Swap Obligations" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of
interest on a stated notional amount in exchange for periodic payments
made by such other Person calculated by applying a fixed or a floating
rate of interest on the same notional amount and shall include, without
limitation, interest rate swaps, caps, floors, collars and similar
agreements.
"Investment" in any Person means any direct or indirect advance
(other than advances to suppliers and customers in the ordinary course of
business that are recorded as accounts receivable on the balance sheet of
the lender), loan 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 for value of Capital Stock, Indebtedness or other similar
instruments issued by such Person. If the Company or any Restricted
Subsidiary issues, sells or otherwise disposes of any Capital Stock of a
Person that is a
11
Restricted Subsidiary such that, after giving effect thereto, such Person is no
longer a Restricted Subsidiary, any Investment by the Company or any Restricted
Subsidiary in such Person remaining after giving effect thereto will be deemed
to be a new Investment at such time. The acquisition by the Company or any
Restricted Subsidiary of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person at such time. Except as otherwise provided for herein, the
amount of an Investment shall be its Fair Market 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 4.09:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the Fair Market Value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment"
in an Unrestricted Subsidiary equal to an amount (if positive) equal to
(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 of the
Company.
"Issue Date" means November 1, 2004.
"Legal Defeasance" has the meaning set forth in Section 8.01(b).
"Legal Holiday" has the meaning set forth in Section 11.07.
"Lenders" has the meaning set forth in the definition of the term "Credit
Agreement".
"Lien" means any lien, mortgage, deed of trust, pledge, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof and any agreement to give
any security interest).
"Maturity Date" means November 1, 2014.
"Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds in
the form of cash or Cash Equivalents including payments in respect of deferred
payment obligations when received in the form of cash or Cash Equivalents (other
than the portion of any such deferred payment constituting interest) received by
the Company or any of its Restricted Subsidiaries from such Asset Sale net of:
(1) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and
investment banking fees and sales commissions);
(2) all taxes and other costs and expenses actually paid or
estimated by the Company (in good faith) to be payable in cash in
connection with such Asset Sale and taxes directly
12
attributable to required prepayments or repayments of Indebtedness with
the proceeds of such Asset Sale;
(3) repayment of Indebtedness that is secured by the property or
assets that are the subject of such Asset Sale and is required to be
repaid in connection with such Asset Sale; and
(4) appropriate amounts to be provided by the Company or any
Restricted Subsidiary, as the case may be, as a reserve, in accordance
with GAAP, against any liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated
with such Asset Sale;
provided, however, that if, after the payment of all taxes with respect to such
Asset Sale, the amount of estimated taxes, if any, pursuant to clause (2) above
exceeded the tax amount actually paid in cash in respect of such Asset Sale, the
aggregate amount of such excess shall, at such time, constitute Net Cash
Proceeds.
"Net Proceeds Offer" has the meaning set forth in Section 4.10.
"Net Proceeds Offer Amount" has the meaning set forth in Section 4.10.
"Net Proceeds Offer Payment Date" has the meaning set forth in Section
4.10.
"Net Proceeds Offer Trigger Date" has the meaning set forth in Section
4.10.
"Non-U.S. Person" means a Person who is not a U.S. person, as defined in
Regulation S.
"Notes" means, collectively, the Initial Notes, the Additional Notes and
the Exchange Notes.
"Obligations" means all obligations for principal, premium, interest,
Additional Interest, penalties, fees, indemnifications, reimbursements, damages
and other liabilities payable under the documentation governing any
Indebtedness.
"Officer" means the Chairman of the Board, Senior Chairman of the Board,
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President or the Secretary of the Company or any other officer designated by the
Board of Directors serving in a similar capacity.
"Officers' Certificate" means a certificate signed by two Officers of the
Company, at least one of whom shall be the principal financial officer of the
Company, and delivered to the Trustee.
"144A Global Notes" has the meaning set forth in Section 2.01.
"Opinion of Counsel" means a written opinion of counsel who shall be
reasonably acceptable to the Trustee complying with the requirements of Sections
11.04 and 11.05, as they relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning set forth in Section 2.03.
"Permitted Business" means any business that is the same as or similar,
reasonably related, complementary or incidental to the business in which the
Company or any of its Restricted Subsidiaries is engaged on the Issue Date.
13
"Permitted Fixed Asset Indebtedness" means Indebtedness of the Company and
its Domestic Restricted Subsidiaries incurred for the purpose of financing all
or any part of the purchase price, or the cost of installation, construction or
improvement, of property or equipment, provided that the aggregate principal
amount of such Indebtedness does not exceed the lesser of (1) the Fair Market
Value of such property or (2) such purchase price of cost as increased by the
purchase of additions and accessions to such property and by any fees and other
obligations in respect of the Indebtedness.
"Permitted Holders" means any of Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx,
Xxxxx X. Xxxxxx or any "group" (as defined in Rule 13d-5 of the Exchange Act)
consisting of any or all of the foregoing or their heirs.
"Permitted Indebtedness" means, without duplication, each of the
following:
(1) Indebtedness under the Notes issued in the Offering described in
the Offering Circular dated October 25, 2004, in an aggregate outstanding
principal amount not to exceed $110,000,000, and the related Guarantees;
(2) Indebtedness incurred pursuant to the Credit Agreement in an
aggregate principal amount at any time outstanding not to exceed the
lesser of (a) $30,000,000 or (b) the amount permitted to be borrowed under
the Credit Agreement at such time;
(3) other than as described in clauses (1) and (2), other
Indebtedness of the Company and its Restricted Subsidiaries outstanding on
the Issue Date or that may be borrowed pursuant to any commitment in
effect under any credit agreement or facility in existence on the Issue
Date;
(4) Interest Swap Obligations of the Company or any Restricted
Subsidiary of the Company covering Indebtedness of the Company or any of
its Restricted Subsidiaries; provided, however, that such Interest Swap
Obligations are entered into for the purpose of fixing or hedging interest
rates with respect to any fixed or variable rate Indebtedness that is
permitted by this Indenture to be outstanding to the extent that the
notional amount of any such Interest Swap Obligation does not exceed the
principal amount of Indebtedness to which such Interest Swap Obligation
relates;
(5) Indebtedness under Currency Agreements; provided that in the
case of Currency Agreements which relate to Indebtedness, such Currency
Agreements do not increase the Indebtedness of the Company and its
Restricted Subsidiaries outstanding other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(6) Indebtedness owed by any Restricted Subsidiary to the Company or
to another Restricted Subsidiary, or owed by the Company to any Restricted
Subsidiary that, if owed to a Restricted Subsidiary that is not a
Guarantor, is unsecured and subordinated in right of payment to the
payment and performance of the Company's obligations under this Indenture
and the Notes, except that such Indebtedness must at all times be held by
a Person that is either the Company or a Restricted Subsidiary, and except
that upon either (a) the transfer or other disposition of any of the
Indebtedness to a Person other than the Company or another Restricted
Subsidiary or (b) the sale, lease, transfer or other disposition of shares
of Capital Stock (including by consolidation or merger) of such Restricted
Subsidiary to a Person other than the Company or another Restricted
Subsidiary, the incurrence of the Indebtedness will be deemed to be an
incurrence of Indebtedness that is not permitted by this clause (6);
14
(7) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against
insufficient funds in the ordinary course of business; provided, however,
that such Indebtedness is extinguished within three Business Days of
incurrence;
(8) Indebtedness of the Company or any of its Domestic Restricted
Subsidiaries represented by stand-by letters of credit for the account of
the Company or such Domestic Restricted Subsidiary, as the case may be;
provided, however, that the aggregate outstanding undrawn and unreimbursed
amounts in respect of such letters of credit may not at any time exceed
$5,000,000 (which letters of credit may, but need not be, issued under the
Credit Agreement);
(9) Indebtedness of the Company or any of its Restricted
Subsidiaries represented by letters of credit for the account of the
Company or such Restricted Subsidiary, as the case may be, in order to
provide security for workers' compensation claims, payment obligations in
connection with self-insurance or similar requirements in the ordinary
course of business;
(10) 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;
(11) Indebtedness represented by Capitalized Lease Obligations and
Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
incurred in the ordinary course of business (including Refinancings
thereof that do not result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the
terms of the instrument governing such Indebtedness and the amount of
reasonable expenses incurred by the Company in connection with such
Refinancing)) not to exceed $5,000,000 at any time outstanding (which
Indebtedness may, but need not be, incurred in whole or in part under the
Credit Agreement);
(12) Indebtedness represented by the Permitted Fixed Asset
Indebtedness of the Company and its Domestic Restricted Subsidiaries
incurred in the ordinary course of business (including Refinancings
thereof that do not result in an increase in the aggregate principal
amount of Indebtedness of such Person as of the date of such proposed
Refinancing (plus the amount of any premium required to be paid under the
terms of the instrument governing such Indebtedness and the amount of
reasonable expenses incurred by the Company in connection with such
Refinancing)) not to exceed $5,000,000 at any time outstanding (which
Indebtedness may, but need not be, incurred in whole or in part under the
Credit Agreement);
(13) Refinancing Indebtedness;
(14) Indebtedness represented by guarantees by the Company or a
Restricted Subsidiary of Indebtedness incurred by the Company or a
Restricted Subsidiary so long as the incurrence of such Indebtedness by
the Company or any such Restricted Subsidiary is otherwise permitted by
the terms of this Indenture;
(15) Indebtedness arising from agreements of the Company or a
Subsidiary providing for indemnification, adjustment of purchase price or
similar obligations, in each case, incurred in connection with the
disposition of any business, assets or Subsidiary, other than guarantees
of Indebtedness incurred by any Person acquiring all or any portion of
such business, assets or Subsidiary for the purpose of financing such
acquisition; provided that the maximum aggregate
15
liability in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Company and the Subsidiary in
connection with such disposition;
(16) Indebtedness of the Company or any of its Restricted
Subsidiaries to the extent the net proceeds thereof are promptly used to
redeem the Notes in full or deposited to defease or discharge the Notes,
in each case, in accordance with this Indenture;
(17) Commodity agreements entered into in the ordinary course of
business to protect against fluctuations in the prices of raw materials
and not for speculative purposes;
(18) Indebtedness of Foreign Subsidiaries, the aggregate principal
amount of which Indebtedness outstanding at any time does not exceed, as
to all the Foreign Subsidiaries, $5,000,000; provided that for purposes of
determining compliance with such U.S. dollar-denominated restriction on
the incurrence of such Indebtedness, the U.S. dollar-equivalent principal
amount of such Indebtedness denominated in foreign currency shall be
calculated based on the relevant currency exchange rate in effect on such
date the Indebtedness was incurred, in the case of term Indebtedness, or
first committed, in the case of revolving credit Indebtedness; provided
further that if Refinancing Indebtedness is incurred to refinance such
Indebtedness, and the refinancing would cause the applicable U.S.
dollar-denominated restriction to be exceeded if calculated at the
relevant currency exchange rate in effect on the date of the refinancing,
then the U.S. dollar-denominated restriction will be deemed not to have
been exceeded so long as the principal amount of such Refinancing
Indebtedness does not exceed the principal amount of the Indebtedness
being refinanced; and
(19) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $5,000,000 at
any time outstanding (which Indebtedness may, but need not be, incurred in
whole or in part under the Credit Agreement).
For purposes of determining compliance with Section 4.08, (a) the
outstanding principal amount of any item of Indebtedness shall be counted only
once and (b) in the event that an item of Indebtedness meets the criteria of
more than one of the categories of Permitted Indebtedness described in clauses
(1) through (19) above or is entitled to be incurred pursuant to the
Consolidated Fixed Charge Coverage Ratio provisions of Section 4.08, the Company
shall, in its sole discretion, classify (or later reclassify) such item of
Indebtedness in any manner that complies with Section 4.08. Accrual of interest,
accretion or amortization of original issue discount, the payment of interest on
any Indebtedness in the form of additional Indebtedness with the same terms, and
the payment of dividends on Disqualified Capital Stock in the form of additional
shares of the same class of Disqualified Capital Stock will not be deemed to be
an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for
purposes of Section 4.08.
"Permitted Investments" means:
(1) Investments by the Company or any Restricted Subsidiary in any
Person that is or will become immediately after such Investment a
Guarantor or that will merge or consolidate with or into the Company or a
Guarantor, or that transfers or conveys all or substantially all of its
assets to the Company or a Guarantor;
(2) Investments in the Company by any Restricted Subsidiary;
provided that any Indebtedness evidencing such Investment is unsecured and
subordinated, pursuant to a written agreement, to the Company's
Obligations under the Notes and this Indenture;
(3) Investments in cash and Cash Equivalents;
16
(4) Currency Agreements and Interest Swap Obligations entered into
in the ordinary course of the Company's or its Restricted Subsidiaries'
businesses and otherwise in compliance with this Indenture;
(5) Investments in the Notes;
(6) Investments in securities of trade creditors, customers or any
other Persons received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such Persons in exchange
for claims against such Persons;
(7) Investments made by the Company or its Restricted Subsidiaries
as a result of consideration received in connection with an Asset Sale
made in compliance with Section 4.10;
(8) Investments in existence on the Issue Date;
(9) loans and advances, including advances for travel and moving
expenses, to employees, officers and directors of the Company and its
Restricted Subsidiaries in the ordinary course of business for bona fide
business purposes not in excess of $1,000,000 at any one time outstanding;
(10) Investments in accounts and notes receivable acquired in the
ordinary course of business; and
(11) additional Investments in an aggregate amount not to exceed
$5,000,000 at any time outstanding.
"Permitted Liens" means the following types of Liens:
(1) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(2) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law or pursuant to customary reservations or retentions of
title incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof;
(3) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money);
(4) any judgment Lien not giving rise to an Event of Default;
17
(5) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Restricted Subsidiaries;
(6) any interest or title of a lessor under any Capitalized Lease
Obligation permitted pursuant to clause (11) of the definition of
"Permitted Indebtedness"; provided that such Liens do not extend to any
property or assets which is not leased property subject to such
Capitalized Lease Obligation;
(7) Liens securing Purchase Money Indebtedness permitted pursuant to
clause (11) of the definition of "Permitted Indebtedness"; provided,
however, that (a) the Indebtedness shall not exceed the cost of the
property or assets acquired, together, in the case of real property, with
the cost of the construction thereof and improvements thereto, and shall
not be secured by a Lien on any property or assets of the Company or any
Restricted Subsidiary of the Company other than such property or assets so
acquired or constructed and improvements thereto and (b) the Lien securing
such Indebtedness shall be created within 180 days of such acquisition or
construction or, in the case of a refinancing of any Purchase Money
Indebtedness, within 180 days of such refinancing;
(8) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(9) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(10) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and set-off;
(11) Liens securing Interest Swap Obligations which Interest Swap
Obligations relate to Indebtedness that is otherwise permitted under this
Indenture;
(12) Liens securing Indebtedness under Currency Agreements that are
permitted under this Indenture;
(13) Liens securing Acquired Indebtedness incurred in accordance
with Section 4.08; provided that:
(a) such Liens secured such Acquired Indebtedness at the time
of and prior to the incurrence of such Acquired Indebtedness by the
Company or a Restricted Subsidiary of the Company and were not
granted in connection with, or in anticipation of, the incurrence of
such Acquired Indebtedness by the Company or a Restricted Subsidiary
of the Company; and
(b) such Liens do not extend to or cover any property or
assets of the Company or of any of its Restricted Subsidiaries other
than the property or assets that secured the Acquired Indebtedness
prior to the time such Indebtedness became Acquired Indebtedness of
the Company or a Restricted Subsidiary of the Company and are no
more
18
favorable to the lienholders than those securing the Acquired
Indebtedness prior to the incurrence of such Acquired Indebtedness
by the Company or a Restricted Subsidiary of the Company;
(14) Liens existing as of the Issue Date and securing Indebtedness
permitted to be outstanding under clause (3) of the definition of the term
"Permitted Indebtedness" to the extent and in the manner such Liens are in
effect on the Issue Date;
(15) Liens on property acquired by the Company or a Restricted
Subsidiary, so long as the Liens were in existence before the
contemplation of the acquisition and do not extend to any other property;
(16) Liens securing Indebtedness under the Credit Agreement to the
extent such Indebtedness is permitted under clause (2), (8), (11), (12) or
(19) of the definition of "Permitted Indebtedness";
(17) Liens securing Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted
under this paragraph and which has been incurred in accordance with
Section 4.08; provided, however, that such Liens: (a) are no less
favorable to the Holders and are not more favorable to the lienholders
with respect to such Liens than the Liens in respect of the Indebtedness
being Refinanced; and (b) do not extend to or cover any property or assets
of the Company or any of its Restricted Subsidiaries not securing the
Indebtedness so Refinanced.
"Permitted Payments" has the meaning set forth under Section 4.09.
"Person" means an individual, partnership, corporation, limited liability
company, unincorporated organization, trust or joint venture, or a governmental
agency or political subdivision thereof.
"Physical Notes" has the meaning set forth in Section 2.14(b).
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights to any other Capital Stock of such Person with
respect to dividends or redemptions or upon liquidation.
"Private Placement Legend" means the legend set forth on the Initial Notes
in the form set forth in Exhibit A.
"Public Equity Offering" means an underwritten public offering of Common
Stock of the Company or any holding company of the Company pursuant to a
registration statement filed with the SEC (other than on Form S-8).
"Purchase Money Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries incurred for the purpose of financing all or any part of
the purchase price, or the cost of installation, construction or improvement, of
property or equipment, provided that the aggregate principal amount of such
Indebtedness does not exceed the lesser of (1) the Fair Market Value of such
property or (2) such purchase price or cost as increased by the purchase of
additions and accessions to such property and by any fees and other obligations
in respect of the Indebtedness.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
19
"Qualified Capital Stock" means any Capital Stock that is not Disqualified
Capital Stock.
"Record Date" means any of the Record Dates specified in the Notes,
whether or not a Legal Holiday.
"Redemption Date" means, when used with respect to any Note to be
redeemed, the date fixed for redemption pursuant to this Indenture and the
Notes.
"Redemption Price" means, when used with respect to any Note to be
redeemed, the price fixed for redemption pursuant to this Indenture and the
Notes.
"Reference Date" has the meaning set forth in Section 4.09.
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue a security or Indebtedness in exchange or replacement for, such
security or Indebtedness in whole or in part. "Refinanced" and "Refinancing"
shall have correlative meanings.
"Refinancing Indebtedness" means any Refinancing by the Company or any
Restricted Subsidiary of the Company of Indebtedness incurred in accordance with
Section 4.08 (other than pursuant to Permitted Indebtedness) or clauses (1), (3)
or (13) of the definition of Permitted Indebtedness, in each case that does not:
(1) have an aggregate principal amount (or, if such Indebtedness is
issued with original issue discount, an aggregate offering price) greater
than the sum of (a) the aggregate principal amount of the Indebtedness
being Refinanced (or, if such Indebtedness being Refinanced is issued with
original issue discount, the aggregate accreted value) as of the date of
such proposed Refinancing plus (b) the amount of fees, expenses, premium,
defeasance costs and accrued but unpaid interest relating to the
Refinancing of such Indebtedness being Refinanced;
(2) create Indebtedness with (a) a Weighted Average Life to Maturity
that is less than the Weighted Average Life to Maturity of the
Indebtedness being Refinanced or (b) a final maturity earlier than the
final maturity of the Indebtedness being Refinanced; or
(3) affect the security, if any, for such Refinancing Indebtedness
(except to the extent that less security is granted to holders of such
Refinancing Indebtedness).
If such Indebtedness being Refinanced is subordinate or junior by its terms to
the Notes, then such Refinancing Indebtedness shall be subordinate by its terms
to the Notes at least to the same extent and in the same manner as the
Indebtedness being Refinanced.
"Register" is defined in Section 2.03.
"Registrar" has the meaning set forth in Section 2.03.
"Registration Rights Agreement" means (1) with respect to the Initial
Notes issued on the Issue Date, the Registration Rights Agreement, dated as of
the Issue Date, among the Company, the Guarantors and the Initial Purchaser, and
(2) with respect to each issuance of Additional Notes issued in a transaction
exempt from the registration requirements of the Securities Act, the
registration rights agreement, if any, among the Company, the Guarantors and the
initial purchaser(s) under the related purchase agreement, in
20
each case as the same may be amended or modified from time to time in accordance
with the terms thereof.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Permanent Global Note" means a permanent Global Note
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Regulation S Temporary Global Note upon expiration of the Restricted
Period.
"Regulation S Temporary Global Note" means a temporary Global Note
deposited with or on behalf of and registered in the name of the Depositary or
its nominee, issued in a denomination equal to the outstanding principal amount
of the Initial Notes or Additional Notes initially sold in reliance on Rule 903
of Regulation S.
"Restricted Payment" has the meaning set forth in Section 4.09.
"Restricted Period" means the 40-day distribution compliance period as
defined in Regulation S.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; provided that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"Restricted Subsidiary" means any Subsidiary of the Company that at the
time of determination is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Significant Subsidiary" with respect to any Person, means any Restricted
Subsidiary of such Person that satisfies the criteria for a "significant
subsidiary" set forth in Rule 1-02(w) of Regulation S-X under the Exchange Act.
"Subsidiary" with respect to any Person, means:
(1) any corporation of which the outstanding Capital Stock having at
least a majority of the votes entitled to be cast in the election of
directors under ordinary circumstances shall at the time be owned,
directly or indirectly, by such Person; or
(2) any other Person of which at least a majority of the voting
interest under ordinary circumstances is at the time, directly or
indirectly, owned by such Person.
"Surviving Entity" has the meaning set forth in Section 5.01.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. SS 77aaa-77bbbb),
as amended.
"Trustee" has the meaning set forth in the preamble to this Indenture.
21
"Trust Officer" means, when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee having direct
responsibility for the administration of this Indenture, or any other officer to
whom any corporate trust matter is referred because of such person's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
"Unrestricted Cash" means, with respect to any Person, as at any time,
cash and Cash Equivalents of such Person and its Restricted Subsidiaries to the
extent such cash and Cash Equivalents are not subject to any Lien (other than a
Permitted Lien described in clause (16) of the definition thereof (except to the
extent such Permitted Liens are granted to cash collateralize letters of
credit)) or any restriction as to its use and is included in "cash and cash
equivalents" and not "restricted cash" on the consolidated balance sheet of such
Person or any such Restricted Subsidiary.
"Unrestricted Subsidiary" of any Person means:
(1) any Subsidiary of such Person that at the time of determination
shall be or continue to be designated an Unrestricted Subsidiary by the
Board of Directors of such Person in the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless
such Subsidiary owns any Capital Stock of, or owns 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 that:
(1) the Company certifies to the Trustee that such designation
complies with Section 4.09; and
(2) each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of designation, and does not thereafter, create,
incur, issue, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Indebtedness pursuant to which the lender has
recourse to any of the assets of the Company or any of its Restricted
Subsidiaries.
The Board of Directors may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if:
(1) immediately after giving effect to such designation, the Company
is able to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) in compliance with Section 4.08; and
(2) immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing.
Any such designation by the Board of Directors shall be evidenced to the
Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations of, and obligations
guaranteed by, the United States of America for the payment of which the full
faith and credit of the United States of America is pledged.
22
"U.S. Legal Tender" means such coin or currency of the United States
which, as at the time of payment, shall be immediately available legal tender
for the payment of public and private debts.
"Voting Stock" means, with respect to any Person, securities of any class
or classes of Capital Stock of such Person entitling the holders thereof
(irrespective of whether any senior class of stock has voting power by reason of
any contingency) to vote in the election of members of the Board of Directors
(or equivalent governing body) of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (1) the then
outstanding aggregate principal amount of such Indebtedness into (2) the sum of
the total of the products obtained by multiplying (a) the amount of each then
remaining installment, sinking fund, serial maturity or other required payment
of principal, including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
"Wholly-Owned Subsidiary" of any Person means any Restricted Subsidiary of
such Person of which all the outstanding Capital Stock (other than in the case
of a Foreign Subsidiary, directors' qualifying shares or an immaterial amount of
shares required to be owned by other Persons pursuant to applicable law) are
owned by such Person or any Wholly-Owned Subsidiary of such Person.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, such provision
is incorporated by reference in, and made a part of, this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
Section 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
23
(4) words in the singular include the plural, and words in the
plural include the singular;
(5) "herein", "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision;
(6) when the words "includes" or "including" are used herein, they
shall be deemed to be followed by the words "without limitation";
(7) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated; and
(8) unless otherwise defined or the context otherwise requires,
terms for which meanings are provided in this Indenture shall have such
meanings when used in each other Indenture Document.
ARTICLE TWO
THE NOTES
Section 2.01. Form and Dating.
The Initial Notes and the Additional Notes and the Trustee's certificate
of authentication thereon shall be substantially in the form of Exhibit A
hereto. The Exchange Notes and the Trustee's certificate of authentication
thereon shall be substantially in the form of Exhibit B hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
DTC rule or usage. The Company and the Trustee shall approve the form of the
Notes and any notation, legend or endorsement on them. Each Note shall be dated
the date of its authentication.
The terms and provisions contained in the forms of the Notes annexed
hereto as Exhibit A and Exhibit B, shall constitute, and are hereby expressly
made, a part of this Indenture and, to the extent applicable, the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued initially
in the form of one or more permanent global notes in registered form,
substantially in the form set forth in Exhibit A (the "144A Global Notes"),
deposited with the Trustee, as custodian for DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit C.
Notes offered and sold to Institutional Accredited Investors in reliance
on Rule 501(a)(1), (2), (3) or (7) under the Securities Act shall be issued
initially in the form of one or more permanent global notes in registered form,
substantially in the form set forth in Exhibit A (the "IAI Global Notes"),
deposited with the Trustee, as custodian for DTC, duly executed by the Company
and authenticated by the Trustee as hereinafter provided and shall bear the
legend set forth in Exhibit C.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more Regulation S
Temporary Global Note deposited with the Trustee, as custodian for the
Depository, and registered in the name of the Depositary or the nominee of the
Depositary for the accounts of designated agents holding on behalf of Euroclear
or Clearstream, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Exhibit C.
24
Following the termination of the Restricted Period, beneficial interests
in a Regulation S Temporary Global Note will be exchanged for beneficial
interests in a Regulation S Permanent Global Note pursuant to the Applicable
Procedures. Simultaneously with the authentication of a Regulation S Permanent
Global Note, the Trustee will cancel the related Regulation S Temporary Global
Note.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Clearstream Banking" and "Customer Handbook" of Clearstream will
be applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Note that are held by
participants through Euroclear or Clearstream.
The aggregate principal amount of any Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for DTC, as hereinafter provided.
The definitive Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officer executing such Notes, as evidenced
by their execution of such Notes.
Section 2.02. Execution and Authentication; Aggregate Principal
Amount.
An Officer (who shall have been duly authorized by all requisite corporate
actions) shall sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note was an Officer at the time of
such execution but no longer holds that office or position at the time the
Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized officer of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed $110,000,000, (ii) Exchange Notes from
time to time for issue only in exchange for a like principal amount of Initial
Notes or Additional Notes, and (iii) one or more series of Additional Notes in
an unlimited amount in each case upon written orders of the Company in the form
of an Officers' Certificate, which Officers' Certificate shall, in the case of
any issuance of Additional Notes, certify that such issuance is in compliance
with Section 4.08. In addition, each Officers' Certificate shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Exchange Notes or
Additional Notes. All Notes issued under this Indenture shall vote and consent
together on all matters as one class and no series of Notes shall have the right
to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
25
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 in principal amount and any integral
multiple thereof. If such form or terms have been so established, the Trustee
shall not be required to authenticate such Notes if the issue of such Notes
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Notes and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency which shall initially be
the office of the Trustee in the Borough of Manhattan, The City of New York,
where (a) Notes may be presented or surrendered for registration of transfer or
for exchange (the "Registrar"), (b) Notes may be presented or surrendered for
payment (the "Paying Agent") and (c) notices and demands to or upon the Company
in respect of the Notes and this Indenture may be served. The Registrar shall
keep a register of the Notes and of their transfer and exchange (the
"Register"). The Company, upon prior written notice to the Trustee, may have one
or more co-Registrars and one or more additional Paying Agents reasonably
acceptable to the Trustee. The term "Paying Agent" includes any additional
Paying Agent. Neither the Company nor any Affiliate of the Company may act as
Paying Agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee in writing, in advance, of
the name and address of any such Agent and otherwise be reasonably satisfactory
to the Trustee. If the Company fails to maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes. The
Paying Agent or Registrar may resign upon thirty (30) days' written notice to
the Company.
Section 2.04. Obligations of Paying Agent.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that such Paying Agent shall hold separate and apart from, and
not commingle with any other properties, for the benefit of the Holders or the
Trustee, all assets held by the Paying Agent for the payment of principal of, or
interest or Additional Interest, if any, on, the Notes (whether such assets have
been distributed to it by the Company or any other obligor on the Notes), and
the Company and the Paying Agent shall notify the Trustee in writing of any
Default by the Company (or any other obligor on the Notes) in making any such
payment. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed and the
Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
receipt by the Trustee of all assets that shall have been delivered by the
Company to the Paying Agent, the Paying Agent shall have no further liability
for such assets.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company shall furnish or cause the Registrar to
furnish to the Trustee before each Record Date and at such other times as the
Trustee may request in
26
writing a list as of such date and in such form as the Trustee may reasonably
request of the names and addresses of the Holders, which list may be
conclusively relied upon by the Trustee.
Section 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.14 and 2.15, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized denominations, the Registrar or co-Registrar shall
register the transfer or make the exchange as requested; provided, however, that
the Notes presented or surrendered for registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing and
such other documents as the Registrar or co-Registrar may reasonably require. To
permit registrations of transfers and exchanges, the Company shall issue and the
Trustee shall authenticate Notes at the Registrar's or co-Registrar's request.
No service charge shall be made for any registration of transfer or exchange,
but the Company or the Trustee may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Section 2.10, 3.06, 4.10 or 4.19 in which
event the Company shall be responsible for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer or exchange of any Note (i) during a period beginning at the opening of
business fifteen (15) days before the mailing of a notice of redemption of Notes
and ending at the close of business on the day of such mailing and (ii) selected
for redemption in whole or in part pursuant to Article Three, except the
unredeemed portion of any Note being redeemed in part.
Any Holder of a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Note may be effected
only through DTC, in accordance with this Indenture and the Applicable
Procedures.
Section 2.07. Replacement Notes.
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims in writing that the Note has been lost, destroyed or wrongfully
taken, then, in the absence of written notice to the Company upon its request or
the Trustee that such Note has been acquired by a protected purchaser, the
Company shall issue and the Trustee shall authenticate a replacement Note of
like tenor and principal amount and bearing a number not contemporaneously
outstanding if the Trustee's requirements are met. Except with respect to
mutilated Notes, if required by the Trustee or the Company, such Holder must
provide an affidavit of lost certificate and an indemnity bond or other
indemnity, sufficient in the judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable out-of-pocket expenses in replacing a Note, including reasonable fees
and expenses of its counsel and of the Trustee and its counsel. In case any
mutilated, lost, destroyed or wrongfully taken Note has become or is about to
become due and payable, the Company in its discretion may pay such Note instead
of issuing a new Note in replacement thereof. Every replacement Note shall
constitute an additional obligation of the Company, entitled to the benefits of
this Indenture.
Section 2.08. Outstanding Notes.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section 2.08 as not
27
outstanding. Subject to the provisions of Section 2.09, a Note does not cease to
be outstanding because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
protected purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.07.
If on a Redemption Date or the Maturity Date the Paying Agent holds U.S.
Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest and Additional Interest, if any, due on the Notes payable
on that date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such Notes
cease to be outstanding and interest and Additional Interest, if applicable, on
them ceases to accrue.
Section 2.09. Treasury Notes; When Notes are Disregarded.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice, Notes owned
by the Company or any of its Affiliates shall be considered as though they are
not outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes which a Trust Officer of the Trustee actually knows are so owned shall be
so considered. Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor. The Company shall notify the Trustee,
in writing (which notice shall constitute actual notice for purposes of the
foregoing sentence), when it or any of its Affiliates repurchases or otherwise
acquires Notes, of the aggregate principal amount of such Notes so repurchased
or otherwise acquired.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
execute and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate upon receipt of a written order of the Company pursuant to Section
2.02 definitive Notes in exchange for temporary Notes. Until so exchanged, the
temporary Notes shall be entitled to the same benefits under this Indenture as
definitive Notes.
Section 2.11. Cancellation.
The Company at any time may deliver Notes previously authenticated
hereunder which the Company has acquired in any lawful manner, to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee, or at the direction of the Trustee, the Registrar or the
Paying Agent, and no one else, shall cancel all Notes surrendered for
registration of transfer, exchange, payment or cancellation. Subject to Section
2.07, the Company may not issue new Notes to replace Notes that it has paid or
delivered to the Trustee for cancellation. If the Company shall acquire any of
the Notes, such acquisition shall not operate as a redemption or satisfaction of
the Indebtedness represented by such Notes
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unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11. The Trustee shall dispose of all cancelled Notes
in accordance with customary procedures or, at the written request of the
Company, shall return the same to the Company.
Section 2.12. CUSIP Numbers.
A "CUSIP" number shall be printed on the Notes, and the Trustee shall use
the CUSIP number in notices of redemption, purchase or exchange as a convenience
to Holders; provided that any such notice may state that no representation is
made as to the correctness or accuracy of the CUSIP number printed in the notice
or on the Notes and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company shall promptly notify the Trustee in
writing of any change in the CUSIP number.
Section 2.13. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date and
the Maturity Date, the Company shall deposit with the Paying Agent U.S. Legal
Tender sufficient to make cash payments, if any, due on such Interest Payment
Date or the Maturity Date, as the case may be.
Section 2.14. Book-Entry Provisions for Global Notes.
(a) The Global Notes initially shall (i) be registered in the name of DTC
or the nominee of DTC, (ii) be delivered to the Trustee as custodian for DTC and
(iii) bear legends as set forth in Exhibit C.
Members of, or participants in, DTC ("Agent Members") shall have no rights
under this Indenture with respect to any Global Note held on their behalf by
DTC, or the Trustee as its custodian, or under any Global Note, and DTC may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of the Global Note 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 DTC or impair,
as between DTC and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.
(b) Transfers of the Global Notes shall be limited to transfers in whole,
but not in part, to DTC, its successors or their respective nominees. Interests
of beneficial owners in the Global Notes may be transferred or exchanged in
accordance with the Applicable Procedures of DTC and the provisions of Section
2.15; provided, however, that prior to the expiration of the Restricted Period,
transfers of beneficial interests in the Regulation S Temporary Global Note may
not be made to a U.S. Person or for the account or benefit of a U.S. Person
(other than an Initial Purchaser). In addition, Notes in the form of
certificated Notes in registered form in substantially the form set forth in
Exhibit A hereto (the "Physical Notes") shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Notes if (i) DTC
notifies the Company that it is unwilling or unable to continue as depository
for the Global Notes and a successor depository is not appointed by the Company
within ninety (90) days of such notice or (ii) an Event of Default has occurred
and is continuing and the Registrar has received a request from DTC to issue
Physical Notes; provided that a beneficial interest in the Regulation S
Temporary Global Note may not be exchanged for a Physical Note or transferred to
a Person who takes delivery thereof in the form of a Physical Note prior to (A)
the expiration of the Restricted Period and (B) the receipt by the Registrar of
any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities
Act, except in the case of a transfer pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 903 or Rule 904.
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(c) Any beneficial interest in one of the Global Notes that is transferred
to a person who takes delivery in the form of an interest in another Global Note
shall, upon transfer, cease to be an interest in such Global Note and become a
beneficial interest in such other Global Note and, accordingly, shall thereafter
be subject to all transfer restrictions, if any, and other procedures applicable
to a beneficial interest in such other Global Notes for as long as it remains
such an interest.
(d) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to clause
(b) of this Section 2.14, the Registrar shall (if one or more Physical Notes are
to be issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and aggregate principal amount.
(e) In connection with the transfer of an entire Global Note to beneficial
owners pursuant to clause (b) of this Section 2.14, the Global Notes shall be
deemed to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by DTC in exchange for its beneficial interest in the Global
Notes, an equal aggregate principal amount of Physical Notes of authorized
denominations.
(f) Any Physical Note constituting a Restricted Security delivered in
exchange for an interest in the Global Note pursuant to clause (b) or (c) shall,
except as otherwise provided by clauses (a)(i)(x) and (c) of Section 2.15, bear
the legend regarding transfer restrictions applicable to the Physical Notes set
forth in Exhibit A.
(g) The Holder of a Global Note may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.
Section 2.15. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors and Non-U.S.
Persons. The following provisions shall apply with respect to the registration
of any proposed transfer of a Note constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after November
1, 2006 or (y) (1) in the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding Non-U.S. Persons), the
proposed transferee has delivered to the Registrar a certificate
substantially in the form of Exhibit D hereto or (2) in the case of a
transfer to a Non-U.S. Person, the proposed transferor has delivered to
the Registrar a certificate substantially in the form of Exhibit E hereto;
and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by clause (i) above and (y)
instructions given in accordance with the Applicable Procedures and the
Registrar's procedures,
whereupon (1) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical Notes) a
decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and
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(2) the Company shall execute and the Trustee shall authenticate and deliver one
or more Physical Notes of like tenor and principal amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Note constituting a Restricted
Security to a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the transfer if such transfer is
being made by a proposed transferor who has checked the box provided for
on the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that the sale has been made in compliance with the
provisions of Rule 144A to a transferee who has signed the certification
provided for on the form of Note stating, or has otherwise advised the
Company and the Registrar in writing, that it is purchasing the Note for
its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within the
meaning of Rule 144A, 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 it 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 its foregoing representations in
order to claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the Notes to
be transferred consist of Physical Notes which after transfer are to be
evidenced by an interest in the Global Note, upon receipt by the Registrar
of instructions given in accordance with the Applicable Procedures and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the Global
Note in an amount equal to the principal amount of the Physical Notes to
be transferred, and the Trustee shall cancel the Physical Notes so
transferred.
(c) Private Placement Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Private Placement Legend, the Registrar shall deliver
Notes that do not bear the Private Placement Legend. Upon the registration of
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the circumstance contemplated by clause (a)(i)(x) of this Section
2.15 exists or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act. The
Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
(d) General. By its acceptance of any Note bearing the Private Placement
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Private Placement Legend and
agrees that it shall transfer such Note only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.14 or this Section 2.15.
The Company shall have the right to inspect and make
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copies of all such letters, notices or other written communications at any
reasonable time upon the giving of reasonable written notice to the Registrar.
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 Note (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Note) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
Neither the Trustee nor any Agent shall have any responsibility for any
actions taken or not taken by DTC.
Section 2.16. Transfers of Global Notes and Physical Notes.
A transfer of a Global Note or a Physical Note (including the right to
receive principal and interest and Additional Interest, if any, payable thereon)
may be made only by the Registrar's entering the transfer in the Register. Prior
to such entry, the Company shall treat the person in whose name such Note is
registered as the owner of the Note for all purposes.
ARTICLE THREE
REDEMPTION
Section 3.01. Optional Redemption.
The Company may, at its option, redeem the Notes, in whole or in part, at
specified times and under specified conditions, as set forth in Paragraph 5 of
the Notes. If the Company elects to redeem Notes pursuant to Paragraph 5 of the
Notes, it shall, at least forty-five (45) days (or such shorter period as the
Trustee may agree) before the Redemption Date, furnish to the Trustee and Paying
Agent an Officers' Certificate setting forth the Redemption Date and the
principal amount of the Notes to be redeemed and the Section of this Indenture
or Paragraph of the Notes pursuant to which such redemption shall occur.
Each Officers' Certificate provided for in this Section 3.01 shall be
accompanied by an Opinion of Counsel stating that such redemption shall comply
with the conditions contained herein and in the Notes.
Section 3.02. Selection of Notes to be Redeemed.
If fewer than all of the Notes are to be redeemed pursuant to Paragraph 5
of the Notes, the Trustee shall select the Notes to be redeemed:
(1) in compliance with the requirements of the principal national
securities exchange, if any, on which such Notes are listed or
(2) if such Notes are not then listed on a national securities
exchange, on a pro rata basis by lot or by such method as the Trustee may
reasonably determine is fair and appropriate; provided that no partial
redemption will reduce the principal amount of a Note not redeemed to less than
$1,000; and provided further, that if a partial redemption is made with the
proceeds of an Equity Offering then the selection of the Notes or portions
thereof for redemption shall be made by the Trustee only on a pro rata
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basis or on as nearly a pro rata basis as is practicable (subject to the
procedures of DTC), unless such method is prohibited.
The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount at maturity thereof, to be
redeemed. Notes in denominations of $1,000 in principal amount at maturity may
be redeemed only in whole. The Trustee may select for redemption portions (equal
to $1,000 in principal amount at maturity or any integral multiple thereof) of
the principal of Notes that have denominations larger than $1,000. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
Section 3.03. Notice of Redemption.
At least thirty (30) days but not more than sixty (60) days before a
Redemption Date, the Company shall mail or cause to be mailed a notice of
redemption by first class mail, postage prepaid, to each Holder whose Notes are
to be redeemed at its registered address, with a copy to the Trustee and any
Paying Agent. At the Company's written request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense. Failure
to give notice of redemption, or any defect therein to any Holder of any Note
selected for redemption shall not impair or affect the validity of the
redemption of any other Note.
Each notice of redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest and
Additional Interest, if any, to be paid;
(3) the name and address of the Paying Agent;
(4) the CUSIP number;
(5) the subparagraph of the Notes pursuant to which such redemption
is being made;
(6) the place where such Notes called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price plus
accrued interest and Additional Interest, if any;
(7) that, unless the Company fails to deposit with the Paying Agent
funds in satisfaction of the applicable redemption price, interest and
Additional Interest, if any, on Notes called for redemption ceases to
accrue on and after the Redemption Date in accordance with Section 3.05,
and the only remaining right of the Holders of such Notes is to receive
payment of the Redemption Price plus accrued interest and Additional
Interest, if any, upon surrender to the Paying Agent of the Notes
redeemed;
(8) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
Redemption Date, and upon surrender of such Note, a new Note or Notes in
the aggregate principal amount equal to the unredeemed portion thereof
shall be issued; and
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(9) if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Notes to be
redeemed and the aggregate principal amount of Notes to be outstanding
after such partial redemption.
If any of the Notes to be redeemed is in the form of a Global Note, then
the Company shall modify such notice to the extent necessary to accord with the
procedures of DTC applicable to redemption.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03, Notes
or portions thereof called for redemption shall become irrevocably due and
payable on the Redemption Date and at the Redemption Price plus accrued interest
and Additional Interest, if any. Upon surrender to the Trustee or Paying Agent,
such Notes or portions thereof called for redemption shall be paid at the
Redemption Price plus accrued interest and Additional Interest, if any, thereon
to the Redemption Date, but installments of interest and Additional Interest, if
applicable, the maturity of which is on or prior to the Redemption Date, shall
be payable to Holders of record at the close of business on the relevant Record
Dates referred to in the Notes.
Section 3.05. Deposit of Redemption Price.
Not later than 10:00 a.m. local time in the place of payment on the
Redemption Date, the Company shall deposit with the Paying Agent U.S. Legal
Tender sufficient to pay the Redemption Price plus accrued interest and
Additional Interest, if any, of all Notes or portions thereof to be redeemed on
that date.
The Paying Agent shall promptly return to the Company any U.S. Legal
Tender so deposited which is not required for that purpose, except with respect
to monies owed as obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest
and Additional Interest, if any, on the Notes to be redeemed shall cease to
accrue on and after the applicable Redemption Date, whether or not such Notes
are presented for payment.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is to be redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note or Notes equal in principal amount to the unredeemed portion
of the Note surrendered.
ARTICLE FOUR
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay the principal of, premium, if any, and interest and
Additional Interest, if any, on the Notes on the dates and in the manner
provided in the Notes and in this Indenture. An installment of principal of,
premium, if any, and interest and Additional Interest, if any, on the Notes
shall
34
be considered paid on the date it is due if the Trustee or Paying Agent (other
than the Company or an Affiliate of the Company) holds on that date U.S. Legal
Tender designated for and sufficient to pay the installment in full. The Company
shall pay interest on overdue principal at 1% per annum in excess of the rate
per annum set forth in the Notes, and it shall pay interest on overdue
installments of interest and Additional Interest, if any, at the same rate to
the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture, the
Company may, to the extent it is required to do so by law, deduct or withhold
income or other similar taxes imposed by the United States from principal or
interest payments hereunder.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prior written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
Section 4.03. Corporate Existence.
Except as otherwise permitted by Article Four, Article Five and Article
Ten, the Company shall do or cause to be done, at its own cost and expense, all
things necessary to preserve and keep in full force and effect its corporate
existence and the limited liability company, partnership or corporate existence
of each of the Restricted Subsidiaries in accordance with the respective
organizational documents of each such Restricted Subsidiary and the material
rights (charter and statutory) and franchises of the Company and each such
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve, with respect to itself, any material right or franchise and, with
respect to any of the Restricted Subsidiaries, any such existence, material
right or franchise, if the Board of Directors of the Company, shall determine in
good faith that the preservation thereof is no longer desirable in the conduct
of the business of the Company and its Restricted Subsidiaries, taken as a
whole.
Section 4.04. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of the Restricted
Subsidiaries or its properties or any of the Restricted Subsidiaries' properties
and (ii) all material lawful claims for labor, materials and supplies that, if
unpaid, might by law become a Lien upon its properties or any of its Restricted
Subsidiaries' properties; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being or
shall be contested in good faith by appropriate negotiations or proceedings
properly instituted and diligently conducted for which adequate reserves, to the
extent required under GAAP, have been taken.
Section 4.05. Maintenance of Properties and Insurance; Compliance with
Laws.
(a) The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain in good working order and condition in all material respects
(subject to ordinary wear and tear) its properties that are used or useful in
the conduct of its business and that are material to the conduct of such
business, and make all necessary repairs, renewals, replacements, additions,
betterments and improvements thereto
35
and actively conduct and carry on its business; provided, however, that nothing
in this Section 4.05 shall prevent the Company or any of the Restricted
Subsidiaries from discontinuing the operation and maintenance of any of its
properties if such discontinuance is, (i) in the ordinary course of business
consistent with past practices or (ii) in the good faith judgment of the Board
of Directors or other governing body of the Company or the Restricted Subsidiary
concerned, as the case may be, desirable in the conduct of its businesses and is
not disadvantageous in any material respect to the Holders.
(b) The Company shall maintain insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Company, is adequate and appropriate for the conduct of the
business of the Company and the Restricted Subsidiaries in a prudent manner,
with reputable insurers or with the government of the United States or an agency
or instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the good faith judgment of the Company, for
companies similarly situated in the industry in which the Company and the
Restricted Subsidiaries are engaged.
(c) The Company shall, and shall cause each of its Subsidiaries to, comply
with all applicable statutes, rules, regulations, orders and restrictions of the
United States, all states and municipalities thereof, and of any governmental
department, commission, board, regulatory authority, bureau, agency and
instrumentality of the foregoing, in respect of the conduct of its businesses
and the ownership of its properties, except for such noncompliances as are not
in the aggregate reasonably likely to have a material adverse effect on the
financial condition or results of operations of the Company and its
Subsidiaries, taken as a whole or the ability of the Company to perform its
obligations hereunder.
Section 4.06. Compliance Certificate; Notice of Default.
(a) The Company shall deliver to the Trustee, within ninety (90) days
after the end of the Company's fiscal year, an Officers' Certificate stating
that a review of the activities of the Company and its Restricted Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers (one of whom is the principal executive officer, principal
financial officer or principal accounting officer) with a view to determining
whether they have kept, observed, performed and fulfilled their obligations
under this Indenture and the other Indenture Documents and further stating, as
to each such Officer signing such certificate, that to the best of such
Officer's actual knowledge the Company and its Restricted Subsidiaries during
such preceding fiscal year have kept, observed, performed and fulfilled each and
every condition and covenant under this Indenture and the other Indenture
Documents in all material respects and at the date of such certificate there is
no Default or Event of Default that has occurred and is continuing or, if such
signers do know of such Default or Event of Default, the certificate shall
describe the Default or Event of Default and its status with particularity.
(b) The Company shall, so long as any Notes are outstanding, upon any
Officer of the Company becoming aware of any Default or Event of Default,
deliver to the Trustee an Officers' Certificate specifying such Default or Event
of Default within five (5) Business Days of such Officer becoming aware of such
occurrence.
Section 4.07. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of, premium, if any, or interest or Additional
Interest, if any, on the Notes as contemplated herein, wherever enacted, now or
at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the
36
Company hereby expressly waives all benefit or advantage of any such law, and
covenant that it shall not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
Section 4.08. Limitation on Incurrence of Additional Indebtedness.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume, guarantee,
acquire, become liable, contingently or otherwise, with respect to, or otherwise
become responsible for payment of (collectively, "incur") any Indebtedness
(other than Permitted Indebtedness), provided that if no Default or Event of
Default shall have occurred and be continuing at the time of or as a consequence
of incurring any such Indebtedness, the Company or any of its Restricted
Subsidiaries that is or, upon such incurrence, becomes a Guarantor may incur
Indebtedness (including, without limitation, Acquired Indebtedness) if, on the
date of and after giving effect to the incurrence of such Indebtedness, the
Consolidated Fixed Charge Coverage Ratio of the Company and its Restricted
Subsidiaries for the most recently ended four fiscal quarters would be greater
than 2.0 to 1.0.
The principal amount of any Refinancing Indebtedness, if incurred in a
different currency from the Indebtedness being refinanced, will be calculated
based on the currency exchange rate applicable to the currencies in which the
Refinancing Indebtedness is denominated that is in effect on the date of the
refinancing.
Section 4.09. Limitation on Restricted Payments.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any distribution (other than
dividends or distributions payable in Qualified Capital Stock of the
Company and dividends and distributions payable to the Company or another
Restricted Subsidiary of the Company) on or in respect of shares of
Capital Stock of the Company or its Restricted Subsidiaries to holders of
such Capital Stock;
(2) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or its Restricted Subsidiaries (other than
any such Capital Stock held by the Company or any Restricted Subsidiary);
(3) make any principal payment on, purchase, defease, redeem,
prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, scheduled repayment or scheduled sinking fund
payment, any Indebtedness of the Company or any Guarantor that is
subordinate or junior in right of payment to the Notes or a Guarantee; or
(4) make any Investment (other than Permitted Investments);
(each of the foregoing actions set forth in clauses (1), (2), (3) and (4) above
being referred to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto:
(i) a Default or an Event of Default shall have occurred and be
continuing;
37
(ii) the Company is not able to incur at least $1.00 of additional
Indebtedness (other than Permitted Indebtedness) in compliance with
Section 4.08;
(iii) the aggregate amount of Restricted Payments (including such
proposed Restricted Payment) made subsequent to the Issue Date (the amount
expended for such purposes, if other than in cash, being the Fair Market
Value of such property at the time of the making thereof) shall exceed the
sum of:
(a) 50% of the cumulative Consolidated Net Income (or if
cumulative Consolidated Net Income is a loss, minus 100% of such
loss) of the Company earned during the period beginning on the first
day of the first fiscal quarter after the Issue Date and ending on
the last day of the Company's most recent fiscal quarter ending
prior to the date the Restricted Payment occurs for which financial
statements are available (the "Reference Date") (treating such
period as a single accounting period); plus
(b) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company)
from the issuance and sale subsequent to the Issue Date and on or
prior to the Reference Date of Qualified Capital Stock of the
Company (excluding any net proceeds from an Equity Offering to the
extent used to redeem Notes pursuant to Paragraph 5(b) of the
Notes); plus
(c) without duplication of any amounts included in clause
(iii)(B) above, 100% of the aggregate net cash proceeds of any
equity contribution received by the Company from a holder of the
Company's Capital Stock subsequent to the Issue Date and on or prior
to the Reference Date (excluding any net proceeds from an Equity
Offering to the extent used to redeem Notes pursuant to Paragraph
5(b) of the Notes); plus
(d) 100% of the aggregate net cash proceeds received from the
issuance of Indebtedness or shares of Disqualified Capital Stock of
the Company that have been converted into or exchanged for Qualified
Capital Stock of the Company subsequent to the Issue Date and on or
prior to the Reference Date; plus
(e) an amount equal to the sum of (i) the net reduction in the
Investments (other than Permitted Investments) made by the Company
or any of its Restricted Subsidiaries 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 of its
Restricted Subsidiaries, 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 of its
Restricted Subsidiaries in such Person or Unrestricted Subsidiary.
In the case of clauses (iii)(b) and (c) above, any net cash proceeds from
issuances and sales of Qualified Capital Stock of the Company financed directly
or indirectly using funds borrowed from the Company or any Subsidiary of the
Company, shall be excluded until and to the extent such borrowing is repaid.
38
Notwithstanding the foregoing, the provisions set forth in the immediately
preceding paragraph do not prohibit the taking of any of the following actions
(collectively, "Permitted Payments"):
(1) the payment of any dividend or other distribution or redemption
within 60 days after the date of declaration of such dividend or call for
redemption if such payment would have been permitted on the date of
declaration or call for redemption;
(2) the acquisition of any shares of Qualified Capital Stock of the
Company or any Restricted Subsidiary, either (a) solely in exchange for
other shares of Qualified Capital Stock of the Company or (b) through the
application of net proceeds of a sale for cash (other than to a
Subsidiary) of, or equity contribution with respect to, shares of
Qualified Capital Stock of the Company for cash within 60 days after such
sale;
(3) the acquisition of any Indebtedness of the Company or the
Guarantors that is subordinate or junior in right of payment to the Notes
and Guarantees either (a) solely in exchange for shares of Qualified
Capital Stock of the Company, or (b) through the application of net
proceeds of a sale (other than to a Subsidiary) of, or equity contribution
with respect to, shares of Qualified Capital Stock of the Company for cash
within 60 days after such sale or (c) if no Default or Event of Default
would exist after giving effect thereto, with Refinancing Indebtedness;
(4) an Investment either (a) solely in exchange for shares of
Qualified Capital Stock of the Company or (b) through the application of
the net proceeds of a sale (other than to a Subsidiary) of, or equity
contribution with respect to, shares of Qualified Capital Stock of the
Company for cash within 60 days after such sale;
(5) if no Default or Event of Default has occurred and is continuing
or would exist after giving effect thereto, the repurchase or other
acquisition of shares of Capital Stock of the Company from employees,
former employees, directors or former directors of the Company (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 of the Company 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 in any calendar year shall not exceed $250,000; and
provided further, however, that such amount in any calendar year may be
increased by an amount not to exceed the net cash proceeds of key man life
insurance policies received by the Company after the Issue Date;
(6) in the event of a Change of Control, and if no Default shall
have occurred and be continuing or would exist after giving effect, the
payment, purchase, redemption, defeasance or other acquisition or
retirement of Indebtedness that is subordinated to the Notes or the
Guarantees, in each case, at a purchase price not greater than 101% of the
principal amount of such Indebtedness (or, if such Indebtedness was issued
with original issue discount, 101% of the accreted value), plus any
accrued and unpaid interest and Additional Interest, if any, thereon;
provided, however, that prior to such payment, purchase, redemption,
defeasance or other acquisition or retirement, the Company has made a
Change of Control Offer with respect to the Notes as a result of such
Change of Control and has repurchased all Notes validly tendered and not
withdrawn in connection with such Change of Control Offer;
39
(7) repurchases of Capital Stock deemed to occur upon exercise of
stock options, warrants or other similar rights if such Capital Stock
represents a portion of the exercise price of such options, warrants or
other similar rights;
(8) payments or distributions to dissenting stockholders of Capital
Stock of the Company pursuant to applicable law, pursuant to or in
connection with a consolidation, merger or transfer of assets that
complies with the provisions of this Indenture applicable to mergers,
consolidations and transfers of all or substantially all of the property
and assets of the Company or any of its Restricted Subsidiaries;
(9) the application of the proceeds from the issuance of the Notes
on the Issue Date as described above under the "Use of Proceeds" section
of the Offering Circular dated October 25, 2004;
(10) paying any dividend on, or redeeming any or all of, the
Company's redeemable 9.8% cumulative preferred stock, par value $0.01 per
share, Series D, outstanding on the Issue Date; and
(11) if no Default shall have occurred and be continuing or would
exist after giving effect thereto, other Restricted Payments not to exceed
$4,000,000 in the aggregate since the Issue Date.
In determining the aggregate amount of Restricted Payments made subsequent
to the Issue Date in accordance with clause (iii) of the first paragraph of this
Section 4.09, any Permitted Payments made pursuant to clauses (1), (2)(b),
(3)(b), (4)(b) and (11) of the immediately preceding paragraph shall be included
in such calculation, and any other Permitted Payments described above shall be
excluded.
Not later than 30 days after the date of making any Restricted Payment,
the Company shall deliver to the Trustee an Officers' Certificate stating that
such Restricted Payment complies with this Indenture and setting forth in
reasonable detail the basis upon which the required calculations were computed,
which calculations may be based upon the Company's latest available internal
quarterly financial statements.
Section 4.10. Limitation on Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company or the applicable Restricted Subsidiary, as the case
may be, receives consideration at the time of such Asset Sale at least
equal to the Fair Market Value of the assets sold or otherwise disposed;
(2) at least 75% of the consideration received by the Company or the
Restricted Subsidiary, as the case may be, from such Asset Sale is in the
form of cash or Cash Equivalents and is received at the time of such
disposition; provided that the amount of any liabilities (as shown on the
most recent applicable balance sheet) of the Company or such Restricted
Subsidiary (other than liabilities that are by their terms subordinated to
the Notes) that are assumed by the transferee of any such assets shall be
deemed to be cash for purposes of this provision so long as the documents
governing such liabilities provide that there is no further recourse to
the Company or any of its Subsidiaries with respect to such liabilities;
and
40
(3) the Company shall apply, or cause such Restricted Subsidiary to
apply, the Net Cash Proceeds relating to such Asset Sale within 180 days
of receipt thereof either:
(a) to repay Indebtedness under the Credit Agreement and
permanently reduce the commitments thereunder or make open market
repurchases of the Notes;
(b) to make an investment in, or acquire, property, plant,
equipment or other non-current assets that replace the properties
and assets that were the subject of such Asset Sale or that will be
used or useful in a Permitted Business (including expenditures for
maintenance, repair or improvement of existing properties and
assets) or the acquisition of all of the Capital Stock of a Person
engaged in any Permitted Business engaged in by the Company or any
of its Subsidiaries; or
(c) a combination of repayment and investment permitted by the
foregoing clauses (3)(a) and (3)(b).
Pending the final application of Net Cash Proceeds, the Company may
temporarily reduce revolving credit borrowings or invest such Net Cash Proceeds
in any Investments described in clause (3) of the definition of "Permitted
Investments". On the 181st day after an Asset Sale or such earlier date, if any,
as the Board of Directors of the Company or of such Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in clause (3)(a), (3)(b) or (3)(c) of the preceding paragraph (each, a
"Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds
which have not been applied on or before such Net Proceeds Offer Trigger Date as
permitted in clauses (3)(a), (3)(b) and (3)(c) of the preceding paragraph (each
a "Net Proceeds Offer Amount") shall be applied by the Company or such
Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on
a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 60
days following the applicable Net Proceeds Offer Trigger Date, from all Holders
and all holders of other Applicable Indebtedness (other than the Credit
Agreement) containing provisions similar to those set forth in this Section 4.10
on a pro rata basis, the maximum principal amount of Notes and such other
Applicable Indebtedness that may be purchased with the Net Proceeds Offer Amount
at a price equal to 100% of the principal amount thereof (or if such
Indebtedness was issued with original issue discount, 100% of the accreted
value), plus accrued and unpaid interest and Additional Interest, if any,
thereon to the date of purchase; provided, however, that if at any time any
non-cash consideration received by the Company or any Restricted Subsidiary of
the Company, as the case may be, in connection with any Asset Sale is converted
into or sold or otherwise disposed of for cash (other than interest received
with respect to any such non-cash consideration), then such conversion or
disposition shall be deemed to constitute an Asset Sale hereunder on the date of
such conversion or disposition, as the case may be, and the Net Cash Proceeds
thereof shall be applied in accordance with this Section 4.10.
The Company may defer any Net Proceeds Offer until there is an aggregate
unutilized Net Proceeds Offer Amount equal to or in excess of $5,000,000
resulting from one or more Asset Sales in which case the accumulation of such
amount shall constitute a Net Proceeds Offer Trigger Date (at which time, the
entire unutilized Net Proceeds Offer Amount, and not just the amount in excess
of $5,000,000, shall be applied as required pursuant to the immediately
preceding paragraph). To the extent that any Net Proceeds remain after
completion of a Net Proceeds Offer, the Company may use the remaining amount for
general corporate purposes otherwise permitted by this Indenture. Upon the
completion of each Net Proceeds Offer, the Net Proceeds Offer Amount will be
reset at zero.
In the event of the transfer of substantially all (but not all) of the
property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted in Section 5.01, which
transaction does not constitute a Change of Control, the successor entity shall
be deemed to
41
have sold the properties and assets of the Company and its Restricted
Subsidiaries not so transferred for purposes of this Section 4.10, and shall
comply with the provisions of this Section 4.10 with respect to such deemed sale
as if it constituted an Asset Sale. In addition, the Fair Market Value of such
properties and assets of the Company or its Restricted Subsidiaries deemed to be
sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10.
Each notice of a Net Proceeds Offer shall be mailed first class, postage
prepaid, to the record Holders as shown on the register of Holders within 20
days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee,
and shall comply with the procedures set forth in this Indenture. Upon receiving
notice of the Net Proceeds Offer, Holders may elect to tender their Notes in
whole or in part in integral multiples of $1,000 in exchange for cash. To the
extent Holders properly tender Notes in an amount exceeding the Net Proceeds
Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis
(based on amounts tendered). A Net Proceeds Offer shall remain open for a period
of 20 Business Days or such longer period as may be required by law.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the
provisions of any securities laws or regulations conflict with 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
Section 4.10 by virtue of such compliance.
Section 4.11. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or permit to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to:
(1) pay dividends or make any other distributions on or in respect
of its Capital Stock;
(2) make loans or advances or to pay any Indebtedness or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company; or
(3) transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company;
except for such encumbrances or restrictions existing under or by reason of:
(a) applicable law, rule or regulation;
(b) this Indenture, the Notes or the Guarantees;
(c) customary non-assignment, subletting or net worth
provisions of any lease, or other agreement entered into in the
ordinary course of business and consistent with past practices, of
the Company or any Restricted Subsidiary to the extent such
provisions restrict the transfer of the lease or the property leased
thereunder;
42
(d) any instrument governing Acquired Indebtedness, which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person or the
properties or assets of the Person so acquired;
(e) the Credit Agreement (and all replacements or
substitutions thereof on terms no more adverse to the Holders and no
less favorable or more onerous to the Company and its Restricted
Subsidiaries);
(f) agreements existing on the Issue Date to the extent and in
the manner such agreements are in effect on the Issue Date;
(g) restrictions on the transfer of assets subject to any Lien
permitted under this Indenture;
(h) restrictions imposed by any agreement to sell assets or
Capital Stock permitted under this Indenture to any Person pending
the closing of such sale;
(i) provisions in joint venture agreements and other similar
agreements (in each case relating solely to the respective joint
venture or similar entity or the equity interests therein) entered
into in the ordinary course of business;
(j) restrictions contained in the terms of the Purchase Money
Indebtedness or Capitalized Lease Obligations not incurred in
violation of this Indenture; provided, that such restrictions relate
only to the assets financed with such Indebtedness;
(k) restrictions in other Indebtedness incurred in compliance
with Section 4.08; provided that such restrictions, taken as a
whole, are, in the good faith judgment of the Company's Board of
Directors, no more restrictive in any material respect with respect
to such encumbrances and restrictions than those contained in the
existing agreements referenced in clauses (b), (e) and (f) above;
(l) restrictions on cash or other deposits imposed by
customers under contracts or other arrangements entered into or
agreed to in the ordinary course of business;
(m) restrictions on the ability of any Foreign Restricted
Subsidiary to make dividends or other distributions resulting from
the operation of covenants contained in documentation governing
Indebtedness of such Subsidiary permitted under this Indenture; or
(n) an agreement governing Indebtedness incurred to Refinance
the Indebtedness issued, assumed or incurred pursuant to an
agreement referred to in clause (b), (d), (e), (f), (j) or (k)
above; provided, however, that the provisions relating to such
encumbrance or restriction contained in any such Indebtedness, taken
as a whole, are, in the good faith judgment of the Company's Board
of Directors, no more restrictive in any material respect with
respect to such encumbrances and restrictions than those contained
in the existing agreements referenced in such clause (b), (d), (e),
(f), (j) or (k).
43
Section 4.12. Limitation on Issuances and Sales of Preferred Stock of
Subsidiaries.
The Company will not permit or cause any of its Restricted Subsidiaries to
issue or sell any Preferred Stock (other than to the Company or to a
Wholly-Owned Subsidiary of the Company) or permit any Person (other than the
Company or a Wholly- Owned Subsidiary of the Company) to own or hold any
Preferred Stock of any Restricted Subsidiary of the Company.
Section 4.13. Limitation on Liens.
The Company will not, and will not cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or permit or
suffer to exist any Liens (other than Permitted Liens) of any kind against or
upon any property or assets of the Company or any of its Restricted Subsidiaries
whether owned on the Issue Date or acquired after the Issue Date, or any
proceeds therefrom, or assign or otherwise convey any right to receive income or
profits therefrom, unless (1) if such Lien secures Indebtedness that is pari
passu in right of payment with the Notes, then the Notes are secured on an equal
and ratable basis with the obligations so secured until such time as such
obligation is no longer secured by a Lien or (2) if such Lien secures
Indebtedness that is subordinated in right of payment to the Notes, any such
Lien shall be subordinated to a Lien granted to the Holders of the Notes in the
same collateral as that securing such Lien to the same extent as such
subordinated Indebtedness is subordinated to the Notes.
Section 4.14. Limitations on Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
service) with, or for the benefit of, any of its Affiliates (each an "Affiliate
Transaction"), other than
(1) Affiliate Transactions described in clause (b) below, and
(2) Affiliate Transactions on terms that are no less favorable than
those that might reasonably have been obtained in a comparable transaction
at such time on an arm's-length basis from a Person that is not an
Affiliate of the Company or such Restricted Subsidiary.
With respect to all Affiliate Transactions involving aggregate payments or other
property with a Fair Market Value in excess of $500,000, the Company shall
deliver an Officers' Certificate to the Trustee certifying that such
transactions are in compliance with clause (a)(2) of the preceding paragraph.
All Affiliate Transactions (and each series of related Affiliate Transactions
which are similar or part of a common plan) involving aggregate payments or
other property with a Fair Market Value in excess of $2,000,000 shall be
approved by a majority of the members of the Board of Directors of the Company
(including a majority of the disinterested members thereof), as the case may be,
such approval to be evidenced by a Board Resolution stating that such Board of
Directors has determined that such transaction complies with the foregoing
provisions. If the Company or any Restricted Subsidiary of the Company enters
into an Affiliate Transaction (or a series of related Affiliate Transactions
related to a common plan) that involves an aggregate Fair Market Value of more
than $5,000,000, then the Company shall, prior to the consummation thereof,
obtain a favorable opinion as to the fairness of the financial terms of such
transaction or series of related transactions to the Company or the relevant
Restricted Subsidiary, as the case may be, from an Independent Financial Advisor
and file the same with the Trustee.
(b) The restrictions set forth in clause (a) above shall not apply to:
44
(1) reasonable fees and compensation paid to, indemnity and
reimbursement or advancement of out of pocket expenses provided on behalf
of, officers, directors, employees or consultants of the Company or any
Restricted Subsidiary of the Company as determined in good faith by the
Company's Board of Directors or senior management;
(2) transactions exclusively between or among the Company and any of
its Restricted Subsidiaries or exclusively between or among such
Restricted Subsidiaries, provided such transactions are not otherwise
prohibited by this Indenture;
(3) any agreement as in effect as of the Issue Date or any
transaction contemplated thereby and any amendment thereto or any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Holders in any material
respect than the original agreement as in effect on the Issue Date;
(4) Restricted Payments permitted by this Indenture;
(5) any merger or other transaction with an Affiliate solely for the
purpose of reincorporating the Company in another jurisdiction or creating
a holding company of the Company; and
(6) any employment, stock option, stock repurchase, employee benefit
compensation, business expense reimbursement, severance, termination or
other employment-related agreements, arrangements or plans entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course
of business.
Section 4.15. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or creates
another Domestic Restricted Subsidiary after the Issue Date (other than an
Unrestricted Subsidiary), then the Company shall cause such Domestic Restricted
Subsidiary to:
(1) execute and deliver to the Trustee a supplemental indenture in
form reasonably satisfactory to the Trustee pursuant to which such
Domestic Restricted Subsidiary shall fully and unconditionally guarantee
on a senior unsecured basis all of the Company's obligations under the
Notes and this Indenture on the terms set forth in this Indenture;
(2) take such further action and execute and deliver such other
documents specified in this Indenture or otherwise reasonably requested by
the Trustee to effectuate the foregoing; and
(3) deliver to the Trustee an Opinion of Counsel that such
supplemental indenture and any other documents required to be delivered
have been duly authorized, executed and delivered by such Domestic
Restricted Subsidiary and constitutes a legal, valid, binding and
enforceable obligations of such Domestic Restricted Subsidiary.
Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for all
purposes of this Indenture.
Section 4.16. Conduct of Business.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any businesses other than Permitted Businesses,
except to such extent as is not material to the Company and its Restricted
Subsidiaries taken as a whole.
45
Section 4.17. Reports to Holders.
Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Company will furnish to the Trustee and to the
Holders or otherwise make publicly available:
(1) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K
if the Company were required to file such Forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
that describes the financial condition and results of operations of the
Company and its consolidated Subsidiaries (showing in reasonable detail,
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, the financial condition and results of operations
of the Company and its Restricted Subsidiaries separate from the financial
condition and results of operations of the Unrestricted Subsidiaries of
the Company, if any) and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants; and
(2) all current reports that would be required to be filed with the
SEC on Form 8-K if the Company were required to file such reports, in each
case within the time periods specified in the SEC's rules and regulations,
in each case, within the time periods required for filing such forms and reports
as specified in the SEC's rules and regulations.
Notwithstanding the foregoing, the Company may satisfy such requirements
prior to the effectiveness of the registration statement contemplated by the
Registration Rights Agreement by filing with the SEC such registration statement
within the time period required for such filing as specified in the Registration
Rights Agreement, to the extent that any such registration statement contains
substantially the same information as would be required to be filed by the
Company if it were subject to the reporting requirements of Section 13 or 15(d)
of the Exchange Act, and by providing the Trustee and Holders with or otherwise
making publicly available such Registration Statement (and any amendments
thereto) promptly following the filing thereof.
In addition, following the consummation of the Exchange Offer, whether or
not required by the rules and regulations of the SEC, the Company will file a
copy of all such information and reports with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing). In addition, prior to the consummation of
the Exchange Offer, for so long as any Notes remain outstanding, the Company
shall furnish to the Holders upon their request, the information required to be
delivered pursuant to Rule 144(A)(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee
pursuant to this Section 4.17 is for informational purposes only and the
Trustee's receipt of such reports shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
Section 4.18. Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder for or as an
46
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
or is paid to all Holders that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
Section 4.19. Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder will have the
right to require that the Company purchase all or a portion of such Holder's
Notes using immediately available funds pursuant to the requirements described
in clause (b) below (the "Change of Control Offer"), at a purchase price in cash
equal to 101% of the principal amount of such Holder's tendered Notes on the
date of purchase, plus accrued and unpaid interest and Additional Interest, if
any, to the date of purchase.
(b) Within thirty (30) days following the date upon which the Change of
Control occurred, the Company shall send, by registered first class mail,
postage prepaid, a notice to each record Holder as shown on the register of
Holders, with a copy to the Trustee, which notice shall govern the terms of the
Change of Control Offer. The notice to the Holders shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Change of Control Offer. Such notice shall state:
(1) that the Change of Control Offer is being made pursuant to this
Section 4.19 and that, to the extent lawful, all Notes tendered and not
withdrawn shall be accepted for payment;
(2) the purchase price (including the amount of accrued interest and
Additional Interest, if any) and the purchase date (which shall be no
earlier than thirty (30) days nor later than sixty (60) days from the date
such notice is mailed, other than as may be required by law) (the "Change
of Control Payment Date");
(3) that any Note not tendered shall continue to accrue interest and
Additional Interest, if applicable;
(4) that, unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest and Additional Interest, if applicable,
after the Change of Control Payment Date;
(5) that any Holder electing to have a Note purchased pursuant to a
Change of Control Offer shall be required to surrender its Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Change of Control Payment Date;
(6) that Holders shall be entitled to withdraw their election if the
Paying Agent receives, not later than five (5) Business Days prior to the
Change of Control Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the name of the Holder, the principal amount of
the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing its election to have such Notes purchased;
(7) that Holders whose Notes are purchased only in part shall be
issued new Notes in a principal amount equal to the unpurchased portion of
the Notes surrendered; provided that each Note purchased and each new Note
issued shall be in an original principal amount of $1,000 or integral
multiples thereof; and
47
(8) the circumstances and relevant facts regarding such Change of
Control.
If any of the Notes subject to the Change of Control Offer is in the form
of a Global Note, then the Company shall modify such notice to the extent
necessary to comply with the procedures of the Depositary applicable to
repurchases.
On or before the Change of Control Payment Date, the Company shall, to the
extent lawful (i) accept for payment Notes or portions thereof properly tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S.
Legal Tender sufficient to pay the purchase price plus accrued interest and
Additional Interest, if any, of all Notes or portions thereof so tendered and
(iii) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to the Holders of Notes so tendered the purchase price for such
Notes and the Company shall promptly issue and the Trustee shall promptly (but
in any case not later than five days after the Change of Control Payment Date)
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered; provided that each such new Note shall be in a principal amount of
$1,000 or an integral multiple thereof. Any Notes not so accepted shall be
promptly mailed by the Company to the Holders thereof. For purposes of this
Section 4.19, the Trustee shall act as the Paying Agent.
Any amounts remaining after the purchase of Notes pursuant to a Change of
Control Offer shall be returned by the Trustee to the Company.
Neither the Board of Directors of the Company nor the Trustee may waive
the Company's obligation to offer to purchase the Notes pursuant to this Section
4.19.
The Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements of this
Section 4.19 and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to a Change of Control Offer. To the extent the
provisions of any securities laws or regulations conflict with the provisions
under this Section 4.19, the Company shall comply with the applicable securities
laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.19 by virtue thereof.
Section 4.20. Additional Interest.
If Additional Interest becomes payable by the Company pursuant to the
Registration Rights Agreement, the Company shall deliver to the Trustee an
Officers' Certificate stating (i) the amount of Additional Interest due and
payable, (ii) the Section of the Registration Rights Agreement pursuant to which
Additional Interest is due and payable and (iii) the date on which Additional
Interest is payable. Unless and until a Responsible Officer of the Trustee
receives such an Officers' Certificate, the Trustee may assume without inquiry
that no Additional Interest is payable; provided, that the failure of the
Company to deliver to the Trustee such Officers' Certificate shall not relieve
the Company of its obligation to pay any such Additional Interest when due and
payable.
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ARTICLE FIVE
SUCCESSOR CORPORATION
Section 5.01. Merger, Consolidation and Sale of Assets.
The Company will not, in a single transaction or series of related
transactions, consolidate or merge with or into any Person, or sell, assign,
transfer, lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise dispose of) all or substantially all of the Company's assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries) whether as an entirety or substantially as an entirety to any
Person unless:
(1) either:
(a) the Company shall be the surviving or continuing
corporation; or
(b) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person
which acquires by sale, assignment, transfer, lease, conveyance or
other disposition the properties and assets of the Company and of
the Company's Restricted Subsidiaries substantially as an entirety
(the "Surviving Entity"):
(i) shall be a corporation organized and validly
existing under the laws of the United States or any State
thereof or the District of Columbia; and
(ii) shall expressly assume, by supplemental indenture
(in form and substance reasonably satisfactory to the
Trustee), executed and delivered to the Trustee, the due and
punctual payment of the principal of, and premium, if any,
interest and Additional Interest, if any, on all of the Notes
and the performance of every covenant of the Notes, this
Indenture and the Registration Rights Agreement on the part of
the Company to be performed or observed thereunder;
(2) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(ii) above (including giving
effect to any Indebtedness and Acquired Indebtedness incurred or
anticipated to be incurred in connection with or in respect of such
transaction), the Company or such Surviving Entity, as the case may be,
(a) shall have a Consolidated Net Worth at least equal to the Consolidated
Net Worth of the Company immediately prior to such transaction and (b)
shall be able to incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) in compliance with Section 4.08;
(3) immediately after giving effect to such transaction and the
assumption contemplated by clause (1)(b)(ii) above (including, without
limitation, giving effect to any Indebtedness and Acquired Indebtedness
incurred or anticipated to be incurred and any Lien granted in connection
with or in respect of the transaction), no Default or Event of Default
shall have occurred or be continuing; and
(4) the Company or the Surviving Entity shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with the
49
applicable provisions of this Indenture and that all conditions precedent
in this Indenture relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise, in a single transaction or series of transactions) of all or
substantially all of the properties or assets of one or more Restricted
Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
Any merger or consolidation of (i) a Guarantor with and into the Company
(with the Company being the surviving entity) or another Guarantor or (ii) a
Guarantor or the Company with an Affiliate organized solely for the purpose of
reincorporating such Guarantor or the Company in another jurisdiction in the
United States or any state thereof or the District of Columbia need only comply
with (A) clause (4) of the first paragraph of this Section 5.01; and (B) in the
case of a merger or consolidation involving the Company as described in clause
(ii) of this sentence, clause (1)(b)(ii) of the first paragraph of this Section
5.01.
Section 5.02. Successor Entity Substituted.
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of the Company in accordance with the foregoing,
in which the Company is not surviving or the continuing corporation, the
successor Person formed by such consolidation or into which the Company is
merged or to which such conveyance, lease or transfer is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Indenture and the Notes with the same effect as if such surviving
entity had been named as such. Upon such substitution the Company and any
Guarantors that remain Subsidiaries of the Company shall be released from their
obligations under this Indenture and the Guarantees.
ARTICLE SIX
DEFAULT AND REMEDIES
Section 6.01. Events of Default. The following events are defined as
"Events of Default":
(1) the failure to pay interest or Additional Interest, if any, on
any Notes or any other amount (other than principal for the Notes) when
the same becomes due and payable and the default continues for a period of
thirty (30) days;
(2) the failure to pay the principal of or premium, if any, on any
Notes, when such principal becomes due and payable, at maturity, upon
redemption or otherwise (including the failure to make a payment to
purchase Notes tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer);
(3) a default in the observance or performance of any other covenant
or agreement contained in this Indenture (other than the payment of the
principal of, or premium, if any, or interest or Additional Interest, if
any, on any Note) which default continues for a period of thirty (30) days
after the Company receives written notice specifying the default (and
demanding that such default be remedied) from the Trustee or the Holders
of at least 25% of the outstanding principal amount of the Notes (except
in the case of a default with respect to Section 5.01 or 10.04, which will
constitute an Event of Default with such notice requirement but without
such passage of time requirement);
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(4) the failure to pay at final maturity (giving effect to any
applicable grace periods and any extensions thereof) the principal amount
of any Indebtedness of the Company or any Restricted Subsidiary of the
Company, or the acceleration of the final stated maturity of any such
Indebtedness (which acceleration is not rescinded, annulled or otherwise
cured within 20 days from the date of acceleration) if the aggregate
principal amount of such Indebtedness, together with the principal amount
of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated (in each case with respect to
which the 20-day period described above has elapsed), aggregates
$5,000,000 or more at any time;
(5) one or more judgments in an aggregate amount in excess of
$5,000,000 shall have been rendered against the Company or any of its
Restricted Subsidiaries (other than any judgment as to which a reputable
and solvent third party insurer has accepted coverage) and such judgments
remain undischarged, unpaid or unstayed for a period of 60 days after such
judgment or judgments become final and non-appealable;
(6) the Company or any Significant Subsidiary (A) commences a
voluntary case or proceeding under any Bankruptcy Code with respect to
itself, (B) consents to the entry of an order for relief against it in an
involuntary case under any Bankruptcy Code, (C) consents to the
appointment of a Custodian of it or for substantially all of its property,
(D) makes a general assignment for the benefit of its creditors; or (E)
takes any corporate action to authorize or effect any of the foregoing;
(7) a court of competent jurisdiction enters an order or decree that
(A) is an order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case under any Bankruptcy Code, (B) appoints
a Custodian of the Company or any Significant Subsidiary or for
substantially all of its property or (C) orders the winding-up or
liquidation of its affairs; and such order or decree shall remain unstayed
and in effect for a period of sixty (60) consecutive days; or
(8) any Guarantee of a Significant Subsidiary ceases to be in full
force and effect or any Guarantee of a Significant Subsidiary is declared
to be null and void and unenforceable or any Guarantee of a Significant
Subsidiary is found to be invalid or any Guarantor denies its liability
under its Guarantee (other than by reason of release of such Guarantor in
accordance with the terms of this Indenture).
Section 6.02. Acceleration.
(a) If an Event of Default (other than an Event of Default specified in
Section 6.01(6) or (7) above with respect to the Company) shall occur and be
continuing and has not been waived, the Trustee or the Holders of at least 25%
in principal amount of outstanding Notes may declare the principal of and
premium, if any, accrued interest and Additional Interest, if any, on all the
Notes to be due and payable by notice in writing to the Company and the Trustee
specifying the Event of Default and that it is a "notice of acceleration" (the
"Acceleration Notice"), and the same shall become immediately due and payable.
(b) If an Event of Default specified in Section 6.01(6) or (7) above with
respect to the Company occurs and is continuing, then all unpaid principal of,
and premium, if any, and accrued and unpaid interest and Additional Interest, if
any, on all of the outstanding Notes shall ipso facto become and be immediately
due and payable without any declaration or other act on the part of the Trustee
or any Holder.
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(c) At any time after a declaration of acceleration with respect to the
Notes as described in clause (a) or (b) above, the Holders of a majority in
principal amount of the Notes may rescind and cancel such declaration and its
consequences:
(i) if the rescission would not conflict with any judgment or
decree;
(ii) if all existing Events of Default have been cured or waived
except nonpayment of principal, premium, if any, interest or Additional
Interest, if any, that has become due solely because of the acceleration;
(iii) to the extent the payment of such interest is lawful, interest
on overdue installments of interest and Additional Interest, if any, and
overdue principal and premium, if any, which has become due otherwise than
by such declaration of acceleration, has been paid;
(iv) if the Company has paid the Trustee its reasonable compensation
and reimbursed the Trustee for its reasonable expenses, disbursements and
its advances; and
(v) in the event of the cure or waiver of an Event of Default of the
type described in Section 6.01(6) or (7), the Trustee shall have received
an Officers' Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived.
(d) No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
principal of, premium, if any, or interest or Additional Interest, if any, on
the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Subject to Sections 2.09, 6.02, 6.07 and 9.02, the Holders of a majority
in principal amount of the Notes may waive any existing Default or Event of
Default and its consequences, except (other than as provided in Section 6.02(c))
a default in the payment of the principal of or premium, if any, interest or
Additional Interest, if any, on any Notes. When a Default or Event of Default is
waived, it is cured and ceases to exist.
Section 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount of
the outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on the Trustee, including, without limitation, any
remedies provided for in Section 6.03. Subject to Section 7.01 and 7.02(f),
however, the Trustee may
52
refuse to follow any direction (which direction, if sent to the Trustee, shall
be in writing) that the Trustee reasonably believes conflicts with any
applicable law or this Indenture, that the Trustee determines may be unduly
prejudicial to the rights of another Holder, or that may subject the Trustee to
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction (which
direction, if sent to the Trustee, shall be in writing).
Section 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or the
Notes unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) subject to Section 2.09, Holders of at least 25% in principal
amount of the outstanding Notes make a written request to the Trustee to
institute proceedings in respect of that Event of Default;
(3) such Holders offer to the Trustee indemnity reasonably
satisfactory to the Trustee against any loss, liability or expense to be
incurred in compliance with such request;
(4) the Trustee does not comply with the request within sixty (60)
days after receipt of the request and the offer of indemnity; and
(5) during such sixty (60) day period the Holders of a majority in
principal amount of the outstanding Notes do not give the Trustee a
written direction which, in the opinion of the Trustee, is inconsistent
with the request.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
Section 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, and interest and
Additional Interest, if any, on a Note, on or after the respective due dates
expressed in such Note, or to bring suit for the enforcement of any such payment
on or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default 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, in each case, against the Company or any other
obligor on the Notes for the whole amount of principal of, premium, if any, and
accrued interest and Additional Interest, if any, remaining unpaid on, the
Notes, together with interest on overdue principal and, to the extent that
payment of such interest is lawful, interest on overdue installments of interest
and Additional Interest, if any, at the rate set forth in Section 4.01 and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee and its agents and counsel and any other amounts due the
Trustee under Section 7.07.
53
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee Section 7.07. The
Company's payment obligations under this Section 6.09 shall be secured in
accordance with the provisions of Section 7.07. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money in the following order:
First: to the Trustee, the Paying Agent and the Registrar for
amounts due under Section 7.07 (including payment of all compensation
expense, all liabilities incurred and all advances made by the Trustee and
the costs and expenses of collection);
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, and interest and Additional Interest, if any,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if any, and
interest and Additional Interest, if any, respectively; and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to Holders pursuant to this Section
6.10.
Section 6.11. Undertaking for Costs.
All parties to this Indenture agree, and each Holder by its
acceptance of its Note shall be deemed to have agreed, that in any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit by the Trustee a suit by a Holder pursuant to
54
Section 6.07, or a suit by a Holder or Holders of more than 10% in principal
amount of the outstanding Notes.
Section 6.12. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceedings to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding has been instituted.
ARTICLE SEVEN
TRUSTEE
Section 7.01. Duties of Trustee.
The duties and responsibilities of the Trustee shall be as provided by the
TIA and as set forth herein.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such rights and powers vested in it by this Indenture and use the
same degree of care and skill in its exercise thereof as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the TIA and the Trustee need
perform only such duties as are specifically set forth in this Indenture
and no covenants or obligations shall be implied in or read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
provided, however, in case of any such certificates or opinions furnished
to the Trustee which by the provisions hereof are furnished to the
Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) this clause (c) does not limit the effect of clause (b) above;
(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
55
(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) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any liability. The Trustee shall be under
no obligation to exercise of any of its rights or powers under this Indenture at
the request, order or direction of any Holders unless such Holders have offered
to the Trustee security and indemnity reasonably satisfactory to the Trustee
against the costs and expenses which may be incurred by it in compliance with
such request, order or direction.
(e) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to clauses (a), (b),
(c) and (d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Money and assets held in trust by the Trustee need not be segregated from other
funds or assets held by the Trustee except to the extent required by law.
Section 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate,
statement instrument, opinion, report, request direction, consent, order,
bond, note or other paper or 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 consult
with counsel and may require an Officers' Certificate or an Opinion of
Counsel, or both, which shall conform to Sections 11.04 and 11.05. The
Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on such Officers' Certificate or Opinion of
Counsel. The written advice of the Trustee's counsel or any Opinion of
Counsel shall be full and complete authorization and protection from
liability in respect of any action taken, suffered or omitted by the
Trustee hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and 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 that it takes or
omits to take in good faith which it reasonably believes to be authorized
or within its rights or powers under this Indenture.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters
as it may see fit and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled, upon reasonable notice to
the Company, to examine the books, records and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys. Except as expressly stated herein to the contrary, in no event
shall the Trustee have any responsibility to ascertain whether there
56
has been compliance with any of the covenants or provisions of Articles
Four or Five or Section 10.04 hereof.
(f) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(g) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient
if signed by an Officer of the Company and any resolution of the Board of
Directors shall be sufficient if evidenced by a copy of such resolution
certified by an Officer of the Company to have been duly adopted and in
full force and effect on the date hereof.
(h) The Trustee shall not be deemed to have notice or be charged
with knowledge of any Default or Event of Default unless the Trustee shall
have received from the Company, any Guarantor or any other obligor upon
the Notes or from any Holder written notice thereof at its address set
forth in Section 11.02 hereof, and such notice references the Notes and
this Indenture.
(i) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and each agent, custodian and other
Person employed to act hereunder.
(j) The Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officers' Certificate may be signed by any persons
authorized to sign an Officers' Certificate, including any person
specified as so authorized in any such certificate previously delivered
and not superseded.
(k) The permissive right of the Trustee to take any action under
this Indenture shall not be construed as a duty to so act.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Company, any Subsidiary of
the Company or its respective Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 of this Indenture, and the
Trustee is subject to TIA Sections 310(b) and 311.
Section 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity, adequacy or
sufficiency of this Indenture or the Notes, and it shall not be accountable for
the Company's use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Company in this Indenture, the Notes or any
other documents in connection with the issuance of the Notes other than the
Trustee's certificate of authentication, which shall be taken as the statement
of Company, and the Trustee assumes no responsibility for their correctness.
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Section 7.05. Notice of Default.
If a Default or an Event of Default occurs and is continuing and if a
Trust Officer has actual knowledge or has received written notice from the
Company or any Holder, the Trustee shall mail to each Holder, with a copy to the
Company, notice of the Default or Event of Default within thirty (30) days
thereof. Except in the case of a Default or an Event of Default in payment of
principal of, premium, if any, or interest and Additional Interest, if any, on,
any Note, including an accelerated payment and the failure to make payment on
the Change of Control Payment Date pursuant to a Change of Control Offer and,
except in the case of a failure to comply with Article Five, the Trustee may
withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders.
Section 7.06. Reports by Trustee to Holders.
Within sixty (60) days after each May 15, beginning with May 15, 2005, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b) and (c).
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed by the Company with the SEC and each stock
exchange or market, if any, on which the Notes are listed or quoted.
The Company shall promptly notify the Trustee if the Notes become listed
or quoted on any stock exchange or market and the Trustee shall comply with TIA
Section 313(d) and any delisting thereof.
Section 7.07. Compensation and Indemnity.
The Company and the Guarantors, jointly and severally, shall pay to the
Trustee, the Paying Agent and the Registrar (each, an "Indemnified Party") from
time to time compensation for their respective services as Trustee, Paying Agent
or Registrar, as the case may be. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse each Indemnified Party upon request for all reasonable
out-of-pocket expenses incurred or made by it in connection with the performance
of its duties under, as the case may be, this Indenture. Such expenses shall
include the reasonable fees and expenses of each of such Indemnified Party's
agents and counsel.
The Company and the Guarantors, jointly and severally, hereby indemnify
each Indemnified Party and its agents, employees, stockholders and directors and
officers for, and holds each of them harmless against, any loss, cost, claim,
liability or expense (including taxes) incurred by any of them except for such
actions to the extent caused by any gross negligence, bad faith or willful
misconduct on the part of such Indemnified Party, arising out of or in
connection with this Indenture, or the administration of this trust, including
the reasonable costs and expenses of enforcing this Indenture against the
Company (including this Section 7.07) and defending themselves against any claim
or liability in connection with the exercise or performance of any of their
rights, powers or duties hereunder or thereunder (including the reasonable fees
and expenses of counsel). The Trustee shall notify the Company promptly of any
claim asserted against an Indemnified Party for which such Indemnified Party has
advised the Trustee that it may seek indemnity hereunder. Failure by the Trustee
to so notify the Company shall not relieve the Company of its obligations
hereunder. At the Indemnified Party's sole discretion, the Company shall defend
the claim and the Indemnified Party shall cooperate and may
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participate in the defense; provided that any settlement of a claim shall be
approved in writing by the Indemnified Party. Alternatively, the Indemnified
Party may at its option have separate counsel of its own choosing and the
Company shall pay the reasonable fees and expenses of such counsel; provided
that the Company shall not be required to pay such fees and expenses if it
assumes the Indemnified Party's defense and there is no conflict of interest
between the Company and the Indemnified Party in connection with such defense as
reasonably determined by the Indemnified Party. The Company need not pay for any
settlement made without its written consent, which consent shall not be
unreasonably withheld.
To secure the Company's and each Guarantor's payment obligations in this
Section 7.07, each Indemnified Party shall have a lien prior to the Notes on all
money or property held or collected by the Trustee, in its capacity as Trustee,
except assets or money held in trust to pay principal of or interest and
Additional Interest, if any, on particular Notes which have been called for
redemption.
When an Indemnified Party incurs expenses or renders services after an
Event of Default specified in Section 6.01(6) or (7) occurs, such expenses
(including the reasonable fees and expenses of its counsel) and the compensation
for such services are intended to constitute expenses of administration under
any Bankruptcy Code.
The obligations of the Company under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee.
The Trustee shall comply with the provisions of TIA Section 312(b)(2) to
the extent applicable.
Section 7.08. Replacement of Trustee.
The Trustee may resign by so notifying the Company. The Holders of a
majority in aggregate principal amount of the outstanding Notes may remove the
Trustee by so notifying the Company and the Trustee in writing and may appoint a
successor Trustee. The Company, by a Board Resolution, may 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 becomes incapable of acting with respect to the
Notes.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall notify each Holder in writing of
such event and shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in aggregate
principal amount of the outstanding Notes may appoint a successor Trustee to
replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all rights, powers, trusts, duties and obligations of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such Trustee so ceasing to act hereunder subject nevertheless
to its lien, if any, provided for in Section 7.07. Upon request of the Company
or the successor Trustee, such retiring Trustee shall at the expense of the
Company and upon
59
payment of the charges of the Trustee then unpaid, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
If a successor Trustee does not take office within thirty (30) days after
the retiring Trustee resigns or is removed, the retiring Trustee, at the
Company's expense, the Company or the Holders of at least 10% in principal
amount of the outstanding Notes 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 Holder who satisfies
the requirements of TIA Section 310(b) may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
The Company shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders in writing.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office and its notice address for purposes of Section 11.02.
Notwithstanding any resignation or replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, Etc.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another Person, the
resulting, surviving or transferee Person without any further act shall, if such
resulting, surviving or transferee Person is otherwise eligible hereunder, be
the successor Trustee; provided, however, that such Person shall be otherwise
qualified and eligible under this Article Seven.
In case any Notes have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Notes
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Notes.
Section 7.10. Eligibility; Disqualification.
(a) This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2), (3) and (5). The Trustee (or, in
the case of a corporation included in a bank holding company system, the related
bank holding company) 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. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA Section 310(a)(2). 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. The provisions of TIA
Section 310 shall apply to the Company, as obligor of the Notes.
(b) If the Trustee has or acquires a conflicting interest within the
meaning of the TIA, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the TIA and this Indenture.
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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 therein.
Section 7.12. Trustee as Paying Agent.
References to the Trustee in Sections 7.01(f), 7.02, 7.03, 7.04, and 7.07
shall include the Trustee in its role as Paying Agent.
Section 7.13. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other Persons as to other matters and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion, or
representation by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel or representation by
counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel has actual knowledge that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
Section 8.01. Legal Defeasance and Covenant Defeasance.
(a) The Company may, at its option and at any time, elect to have either
clause (b) or clause (c) below be applied to the outstanding Notes upon
compliance with the applicable conditions set forth in clause (d).
(b) Upon the Company's exercise under clause (a) of the option applicable
to this clause (b), the Company and the Guarantors shall be deemed to have been
released and discharged from their obligations with respect to the outstanding
Notes and the Guarantees on the date the applicable conditions set forth below
are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such Legal
Defeasance means that the Company shall be deemed to have paid and discharged
the entire Indebtedness represented by the outstanding Notes, which shall
thereafter be deemed to be "outstanding" only for the purposes of the Sections
and matters under this Indenture referred to in clause (i) and (ii) below, and
the Company
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and the Guarantors shall be deemed to have satisfied all their other obligations
under such Notes and this Indenture and the Guarantees, except for the following
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of outstanding Notes to receive solely from the trust fund
described in clause (d) below and as more fully set forth in such clause,
payments in respect of the principal of, premium, if any, interest and
Additional Interest, if any, on such Notes when such payments are due, (ii)
obligations listed in Section 8.03, subject to compliance with this Section 8.01
and (iii) the rights, powers, trusts, duties and immunities of the Trustee and
the Company's obligations in connection therewith. The Company may exercise its
option under this clause (b) notwithstanding the prior exercise of its option
under clause (c) below with respect to the Notes.
(c) Upon the Company's exercise under clause (a) of the option applicable
to this clause (c), the Company and its Restricted Subsidiaries shall be
released and discharged from their obligations under any covenant contained in
Section 4.05 (other than clause (c) thereof), Sections 4.08 through 4.17,
Section 4.19 and Section 5.01(2), with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed to be not
"outstanding" for the purpose of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, such Covenant Defeasance means that,
with respect to the outstanding Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference in
any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under clause (a) hereof of the option applicable to this
clause (c), subject to the satisfaction of the conditions set forth in clause
(d) below, Sections 6.01(3), (4), (5) and (8) shall not constitute Events of
Default.
(d) The following shall be the conditions to application of either clause
(b) or clause (c) above to the outstanding Notes:
(1) The Company shall have irrevocably deposited in trust with the
Trustee, pursuant to an irrevocable trust and security agreement in form
and substance reasonably satisfactory to the Trustee, U.S. Legal Tender or
non-callable U.S. Government Obligations or a combination thereof, in such
amounts and at such times as are sufficient, in the opinion of a
nationally-recognized firm of independent public accountants, to pay the
principal of, and premium, if any, interest and Additional Interest, if
any, on the outstanding Notes on the stated dates for payment or
redemption, as the case may be; provided, however, that the Trustee (or
other qualifying trustee) shall have received an irrevocable written order
from the Company instructing the Trustee (or other qualifying trustee) to
apply such U.S. Legal Tender or the proceeds of such U.S. Government
Obligations to said payments with respect to the Notes to maturity or
redemption;
(2) In the event the Company elects clause (b) above, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (a) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling; or (b) since the Issue Date, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance contemplated hereby and will
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be subject to federal income tax in the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance
had not occurred;
(3) In the event the Company elects clause (c) above, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders
will not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance contemplated hereby and will be
subject to federal income tax in 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;
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit pursuant to clause (1) of this
clause (d) (except such Default or Event of Default resulting from the
failure to comply with Section 4.08 as a result of the borrowing of funds
required to effect such deposit) or insofar as Defaults or Events of
Default from bankruptcy or insolvency events are concerned, at any time in
the period ending on the 91st day after the date of such deposit;
(5) Such Legal Defeasance or Covenant Defeasance shall not result in
a breach of, or constitute a default hereunder or any other material
agreement or instrument to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound;
(6) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit under clause (1) of this clause (d)
was not made by the Company with the intent of preferring the Holders over
any other creditors of the Company or with the intent of defeating,
hindering, delaying or defrauding any other creditors of the Company or
others;
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance, as the case may be, have been complied with; and
(8) The Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary qualifications and exclusions) to the effect
that the trust resulting from the deposit under clause (1) of this clause
(d) does not constitute, or is qualified as, a regulated investment
company under the Investment Company Act of 1940.
Notwithstanding the foregoing, the Opinion of Counsel required by Section
8.01(d)(4)(i) above with respect to a Legal Defeasance need not be delivered if
all Notes not theretofore delivered to the Trustee for cancellation (1) have
become due and payable or (2) shall become due and payable on the maturity date
within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company.
In the event all or any portion of the Notes are to be redeemed
through such irrevocable trust, the Company must make arrangements reasonably
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
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Section 8.02. Satisfaction and Discharge.
In addition to the Company's rights under Section 8.01, the Company
may terminate all of its obligations under this Indenture (subject to Section
8.03), and this Indenture, the Notes and the Guarantees, shall be discharged and
shall cease to be in effect when:
(1) either:
(a) all the Notes theretofore authenticated and delivered
(except lost, stolen or destroyed Notes which have been replaced or
paid as provided in Section 2.07 and Notes for whose payment money
has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust) have been delivered to the Trustee for
cancellation; or
(b) all Notes not theretofore delivered to the Trustee for
cancellation (i) have become due and payable, (ii) will become due
and payable at their stated maturity within one year or (iii) are to
be called for redemption within one year under arrangements
reasonably satisfactory to the Trustee, and the Company has
irrevocably deposited or caused to be deposited with the Trustee
funds in an amount sufficient to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee
for cancellation, for principal of, premium, if any, interest and
Additional Interest, if any, on the Notes to the date of deposit
together with irrevocable instructions from the Company directing
the Trustee to apply such funds to the payment thereof at maturity
or redemption, as the case may be;
(2) the Company has paid all other sums payable under this
Indenture; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel stating that all conditions
precedent under this Indenture relating to the satisfaction and
discharge of this Indenture have been complied with.
Section 8.03. Survival of Certain Obligations.
Notwithstanding the satisfaction and discharge of this Indenture and of
the Notes referred to in Section 8.01 or 8.02, the respective obligations of the
Company and the Trustee under Sections 2.03, 2.04, 2.05, 2.06, 2.07 and 2.08,
Sections 7.07 and 7.08 and Sections 8.05, 8.06 and 8.07 shall survive until the
Notes are no longer outstanding, and thereafter the obligations of the Company
and the Trustee under Sections 7.07, 8.04, 8.05 and 8.06 and 8.07 shall survive.
Section 8.04. Acknowledgment of Discharge by Trustee.
Subject to Section 8.07, after (i) the conditions of Section 8.01 or 8.02
have been satisfied, (ii) the Company has paid or caused to be paid all other
sums payable hereunder by the Company and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
all conditions precedent referred to in clause (i) above relating to the
satisfaction and discharge of this Indenture have been complied with, the
Trustee, upon written request, shall acknowledge in writing the discharge of the
Company's obligations under this Indenture except for those surviving
obligations specified in Section 8.03.
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Section 8.05. Application of Trust Moneys.
The Trustee shall hold any U.S. Legal Tender or U.S. Government
Obligations deposited with it in the irrevocable trust established pursuant to
Section 8.01. The Trustee shall apply the deposited U.S. Legal Tender or the
U.S. Government obligations, together with earnings thereon, through the Paying
Agent, in accordance with this Indenture and the terms of the irrevocable trust
agreement established pursuant to Section 8.01, to the payment of principal of,
premium, if any, and interest and Additional Interest, if any, on the Notes.
Anything in this Article Eight to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the Company's request
any U.S. Legal Tender or U.S. Government Obligations held by it as provided in
Section 8.01(d) which, in the opinion of a nationally-recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 8.01 or 8.02 or the principal, premium, if any,
and interest and Additional Interest, if any, received in respect thereof other
than any such tax, fee or other charge which by law is for the account of the
Holders of outstanding Notes.
Section 8.06. Repayment to the Company; Unclaimed Money.
Subject to Sections 7.07, 8.01 and 8.02, the Trustee and the Paying Agent
shall promptly pay to the Company upon written request from the Company any
excess U.S. Legal Tender or U.S. Government Obligations held by them at any
time. The Trustee and the Paying Agent shall pay to the Company, upon receipt by
the Trustee or the Paying Agent, as the case may be, of a written request from
the Company any money held by it for the payment of principal, premium, if any,
or interest and Additional Interest, if any, that remains unclaimed for two
years after payment to the Holders is required, without interest thereon;
provided, however, that the Trustee and the Paying Agent before being required
to make any payment may, but need not, at the expense of the Company cause to be
published once in a newspaper of general circulation in the City of New York or
mail to each Holder entitled to such money notice that such money remains
unclaimed and that after a date specified therein, which shall be at least
thirty (30) days from the date of such publication or mailing, any unclaimed
balance of such money then remaining shall be repaid to the Company, without
interest thereon. After payment to the Company, Holders entitled to money must
look solely to the Company for payment as general creditors unless an applicable
abandoned property law designated another Person, and all liability of the
Trustee or Paying Agent with respect to such money shall thereupon cease.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with Section 8.01 or 8.02 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and each Guarantors' obligations under this Indenture
and each other Indenture Document to which such person is a party shall be
revived and reinstated as though no deposit had occurred pursuant to Section
8.01 or 8.02 until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with Section 8.01 or 8.02; provided, however, that if the Company has made any
payment of premium, if any, or interest and Additional Interest, if any, on or
principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
Section 9.01. Without Consent of Holders.
From time to time, the Company, the Guarantors and the Trustee, without
the consent of the Holders, may amend, modify, waive or supplement provisions of
this Indenture, the Notes and the Guarantees:
(1) to cure any ambiguity, defect or inconsistency contained
therein;
(2) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(3) to provide for the assumption of the Company's or a Guarantor's
obligations to Holders in accordance with Section 5.01 or 10.04;
(4) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
of any such Holder under this Indenture, the Notes or the Guarantees;
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(6) to allow any Subsidiary or any other Person to guarantee the
Notes;
(7) to release a Guarantor as permitted by this Indenture and the
relevant Guarantee;
(8) to secure the Notes, this Indenture and the Guarantees; or
(9) to make any amendment to the provisions of this Indenture
relating to the form, authentication, transfer or legending of the Notes;
provided, however, that (a) compliance with this Indenture as so amended
would not result in the Notes 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 the
Notes,
so long as such amendment, modification, waiver or supplement does not, in the
opinion of the Trustee, adversely affect the rights of any of the Holders in any
material respect. In formulating its opinion on such matters, the Trustee will
be entitled to rely on such evidence as it deems appropriate, including, without
limitation, solely on an Opinion of Counsel.
After an amendment, modification, waiver or supplement under this Section
9.01 becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, modification, waiver or supplement. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
modification, waiver or supplement.
Section 9.02. With Consent of Holders.
The Company and the Guarantors, when authorized by a Board Resolution, and
the Trustee, together, with the written consent of the Holder or Holders of at
least a majority in aggregate principal
66
amount of the outstanding Notes, may amend or supplement this Indenture, the
Notes or the Guarantees without notice to any other Holders. The Holder or
Holders of a majority in aggregate principal amount of the outstanding Notes may
waive compliance by the Company with any provision of this Indenture, the
Guarantees or the Notes without notice to any other Holder. However, no
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
shall without the consent of each Holder of each Note affected thereby:
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver of any provision of this Indenture
or the Notes;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including default interest, or Additional
Interest on any Notes;
(3) reduce the principal of or change or have the effect of changing
the fixed maturity of any Notes, or change the date on which any Notes may
be subject to redemption or reduce the redemption price therefor;
(4) make any Notes payable in money other than that stated in the
Notes;
(5) make any change in provisions of this Indenture (a) protecting
the right of each Holder to receive payment of principal of, premium, if
any, interest and Additional Interest, if any, on such Note on or after
the due date thereof or to bring suit to enforce such payment, or (b)
permitting Holders of a majority in principal amount of Notes to waive
Defaults or Events of Default;
(6) amend, change or modify in any material respect the obligation
of the Company to make and consummate a Change of Control Offer after the
occurrence of a Change of Control or make and consummate a Net Proceeds
Offer with respect to any Asset Sale that has been consummated or, modify
any of the provisions or definitions with respect thereto;
(7) subordinate the Notes in right of payment to any other
Indebtedness of the Company or any Guarantor;
(8) release any Guarantor from any of its obligations under its
Guarantee or this Indenture otherwise than in accordance with the terms of
this Indenture; or
(9) make any change to Section 9.01 or this Section 9.02.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
Section 9.03. Compliance with TIA.
Every amendment, waiver or supplement of this Indenture, the Notes or the
Guarantees shall comply with the TIA as then in effect.
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Section 9.04. Revocation and Effect of Consents.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
written notice to the Trustee and the Company received before the date on which
the Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, waiver or
supplement shall become effective upon receipt by the Trustee of written
consents from the Holders of the requisite percentage in principal amount of the
outstanding Notes or such Officers' Certificate, whichever first occurs, and the
execution thereof by the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be either (i) at least thirty (30)
days prior to the first solicitation of such consent or (ii) the date of the
most recent list furnished to the Trustee under Section 2.05. If a record date
is fixed, then notwithstanding the last sentence of the immediately preceding
paragraph, those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than ninety (90) days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder unless it makes a change described in any of clauses (1) through
(10) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; provided that any such waiver shall not impair or
affect the right of any Holder to receive payment of principal of, premium, if
any, and interest and Additional Interest, if any, on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.
Section 9.05. Notation on or Exchange of Notes.
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of the Note to deliver the Note to the Trustee.
The Trustee at the written direction of the Company may place an appropriate
notation on the Note about the changed terms and return it to the Holder and the
Trustee may place an appropriate notation on any Note thereafter authenticated.
Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms. Failure to make an appropriate notation, or
issue a new Note, shall not affect the validity and effect of such amendment,
supplement or waiver. Any such notation or exchange shall be made at the sole
cost and expense of the Company. Failure to make the appropriate notation or
issue a new Note shall not effect the validity and effect of such amendment,
supplement or waiver.
Section 9.06. Trustee to Sign Amendments, Etc.
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
rights, duties or immunities of the Trustee under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, in
addition to any
68
other documents required by Section 11.04, an Opinion of Counsel and an
Officers' Certificate each stating that the execution of any amendment,
supplement or waiver authorized pursuant to this Article Nine is authorized or
permitted by this Indenture. Such Opinion of Counsel shall not be an expense of
the Trustee and shall be paid for by the Company.
Section 9.07. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article Nine shall
conform to the requirements of the TIA as then in effect.
ARTICLE TEN
GUARANTEE
Section 10.01. Guarantee.
Each Guarantor hereby fully, irrevocably and unconditionally, jointly and
severally, guarantees (such guarantee to be referred to herein as the
"Guarantee"), to each of the Holders and the Trustee and its respective
successors and assigns that (i) the principal of, premium, if any, and interest
and Additional Interest, if any, on the Notes shall be promptly paid in full
when due, subject to any applicable grace period, whether upon redemption
pursuant to the terms of the Notes, by acceleration or otherwise, and interest
on the overdue principal, if any, and interest on any interest and Additional
Interest, if any, to the extent lawful, of the Notes and all other obligations
of the Company to the Holders and the Trustee hereunder or thereunder shall be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; and (ii) in case of any extension of time of payment or renewal of any
of the Notes or of any such other obligations, the same shall be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise, subject, however, in the case of clauses (i) and (ii)
above, to the limitations set forth in Section 10.03. The Guarantee of each
Guarantor shall rank senior in right of payment to all subordinated Indebtedness
of such Guarantor and equal in right of payment with all other senior
obligations of such Guarantor. Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any of the Holders with respect to
any provisions hereof or thereof, any release of any other Guarantor, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Guarantee shall not be discharged except by complete performance of
the obligations contained in the Notes, this Indenture and in this Guarantee.
The obligations of each Guarantor are limited to the maximum amount which, after
giving effect to all other contingent and fixed liabilities of such Guarantor
and after giving effect to any collections from or payments made by or on behalf
of any other Guarantor in respect of the obligations of such other Guarantor
under its Guarantee or pursuant to its contribution obligations under this
Indenture, shall result in the obligations of such Guarantor under the Guarantee
not constituting a fraudulent conveyance or fraudulent transfer under federal or
state law. The net worth of any Guarantor for such purpose shall include any
claim of such Guarantor against the Company for reimbursement and any claim
against any other Guarantor for contribution. Each Guarantor may consolidate
with or merge into or sell its assets to the Company or another Guarantor
without limitation in accordance with Sections 4.10, 5.01 and 10.04. If any
Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Guarantor,
69
any amount paid by the Company or any Guarantor to the Trustee or such Holder,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect. Each Guarantor further agrees that, as between each
Guarantor, on the one hand, and the Holders and the Trustee, on the other hand,
(x) the maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Six for the purposes of this Guarantee notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article Six, such obligations (whether or not
due and payable) shall forthwith become due and payable by each Guarantor for
the purpose of this Guarantee.
Section 10.02. Release of a Guarantor.
A Guarantor will be automatically and unconditionally released from its
Guarantee (and may subsequently dissolve) without any action required on the
part of the Trustee or any Holder:
(1) if (a) the Company sells or otherwise disposes of all of the
Capital Stock issued by such Guarantor or all or substantially all of the
assets of such Guarantor are sold or otherwise disposed of (including by
way of merger or consolidation) to a Person other than the Company or any
of its Domestic Restricted Subsidiaries or (b) such Guarantor ceases to be
a Restricted Subsidiary, and the Company otherwise complies, to the extent
applicable, with Section 4.10, or
(2) if the Company designates such Guarantor as an Unrestricted
Subsidiary in accordance with Section 4.09, or
(3) if the Company exercises its legal defeasance option or its
covenant defeasance option as described in Section 8.01, or
(4) upon satisfaction and discharge of this Indenture in accordance
with Section 8.02 or payment in full in cash of the principal of, premium,
if any, accrued and unpaid interest and Additional Interest, if any, on
the Notes and all other Obligations that are then due and payable.
The Trustee shall promptly deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 10.02.
Any Guarantor not so released remains liable for the full amount of its
Guarantee as provided in this Article Ten.
Section 10.03. Limitation of Guarantor's Liability.
Each Guarantor and, by its acceptance hereof, each of the Holders hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Code, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law. To effectuate the foregoing intention, the Holders and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under the
Guarantee shall be limited to the maximum amount as shall, after giving effect
to all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under its
Guarantee or pursuant to Section 10.05, result in the obligations of such
Guarantor under the Guarantee not constituting such fraudulent transfer or
conveyance.
70
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms.
Each Guarantor (other than any Guarantor whose Guarantee is to be released
in accordance with the terms of the Guarantee and this Indenture in connection
with any transaction complying with this Section 10.04 and Section 4.10) will
not, and the Company will not cause or permit any Guarantor to, consolidate with
or merge with or into any Person, other than the Company or any other Guarantor,
unless:
(1) the entity formed by or surviving any such consolidation or
merger (if other than the Guarantor) or to which such sale, lease,
conveyance or other disposition shall have been made is a corporation
organized and existing under the laws of the United States or any State
thereof or the District of Columbia;
(2) such entity assumes by supplemental indenture (in form and
substance reasonably satisfactory to the Trustee), executed and delivered
to the Trustee, all of the obligations of the Guarantor under the
Guarantee and the performance of every covenant of the Guarantee, this
Indenture and the Registration Rights Agreement; and
(3) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.
Any merger or consolidation of (i) a Guarantor with and into the Company
(with the Company being the surviving entity) or another Guarantor or (ii) a
Guarantor or the Company with an Affiliate organized solely for the purpose of
reincorporating such Guarantor or the Company in another jurisdiction in the
United States or any state thereof or the District of Columbia need only comply
with (A) clause (4) of the first paragraph of Section 5.01; and (B) in the case
of a merger or consolidation involving the Guarantor as described in clause (ii)
of this sentence, clause (2) of the immediately preceding paragraph.
Section 10.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that each Guarantor that makes a
payment or distribution under a Guarantee shall be entitled to a pro rata
contribution from each other Guarantor hereunder based on the net assets of each
other Guarantor. The preceding sentence shall in no way affect the rights of the
Holders of Notes to the benefits of this Indenture, the Notes or the Guarantees.
Section 10.06. Waiver of Subrogation.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
Section 10.07. Waiver of Stay, Extension or Usury Laws.
Each Guarantor covenants to the extent permitted by law that it shall not
at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive such Guarantor from performing its Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Guarantee; and each
Guarantor hereby expressly waives to the extent permitted by law all benefit or
advantage of any such law, and covenants that it shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
71
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. 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. Any provision of the TIA which is required
to be included in a qualified Indenture, but not expressly included herein,
shall be deemed to be included by this reference.
Section 11.02. Notices.
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
Hawk Corporation
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Chief Financial Officer
Facsimile Number: (000) 000-0000
if to the Trustee:
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust
Facsimile Number: (000) 000-0000
Each of the Company and the Trustee by written notice to each other may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Company or the Trustee shall be deemed to have
been given or made as of the date so delivered if personally delivered; when
answered back, if telexed; when receipt is acknowledged, if faxed; and five (5)
calendar days after mailing if sent by registered or certified mail, postage
prepaid (except that a notice of change of address or a notice sent by mail to
the Trustee shall not be deemed to have been given until actually received by
the addressee).
Any notice or communication mailed to a Holder shall be mailed to such
Holder by first class mail or other equivalent means at such Holder's address as
it appears on the registration books of the Registrar and shall be sufficiently
given to such Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
72
Section 11.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture, any Guarantee or the Notes.
The Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or any Guarantor to the
Trustee to take any action under this Indenture, the Company shall furnish to
the Trustee upon request:
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent to be performed by the Company or the applicable
Guarantor (as the case may be), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company or
the applicable Guarantor (as the case may be), if any, provided for in
this Indenture relating to the proposed action have been complied with.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall include:
(1) a statement that the Person 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 Person, he has made
such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with.
Section 11.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
Section 11.07. Legal Holidays.
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on
73
the next succeeding day that is not a Legal Holiday, and no interest or
Additional Interest, if applicable, shall accrue for the intervening period.
Section 11.08. GOVERNING LAW.
THIS INDENTURE, THE NOTES AND THE GUARANTEES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of its Subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.
Section 11.10. No Recourse Against Others.
A past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company or of the Trustee shall not have any
liability for any obligations of the Company or the Guarantors under the Notes,
the Guarantees or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Holder, by accepting a Note,
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
Section 11.11. Successors.
All agreements of the Company and the Guarantors in this Indenture, the
Notes, and the Guarantees shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successors.
Section 11.12. Duplicate Originals.
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
Section 11.13. Severability.
In case any one or more of the provisions in this Indenture, the Notes or
in the Guarantees shall be held invalid, illegal or unenforceable, in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and of the remaining provisions shall not in
any way be affected or impaired thereby, it being intended that all of the
provisions hereof shall be enforceable to the full extent permitted by law.
74
Section 11.14. WAIVER OF JURY TRIAL.
THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR IN CONNECTION WITH THIS INDENTURE, THE NOTES, THE GUARANTEES
OR THE TRANSACTIONS CONTEMPLATED BY THIS INDENTURE.
75
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
HAWK CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board, Chief
Executive Officer and President
FRICTION PRODUCTS CO., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
XXXXX METAL STAMPINGS, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
XXXXXX, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
X.X. XXXXXXX HOLDINGS, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
INDENTURE
S-1
X.X. XXXXXXX CORP., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
ALLEGHENY CLEARFIELD, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
HAWK MIM, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
HAWK MOTORS, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
HAWK PRECISION COMPONENTS GROUP, INC.,
as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
INDENTURE
S-2
NET SHAPE TECHNOLOGIES LLC, as a Guarantor
By: HAWK MIM, INC.,
its Sole Member
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
QUARTER MASTER INDUSTRIES, INC., as
a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
SINTERLOY CORPORATION, as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
TEX RACING ENTERPRISES, INC., as
a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
XXXXXXX PRODUCTS GROUP, INC., as
a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
INDENTURE
S-3
XXXXXXX PRODUCTS, LLC, as a Guarantor
By: XXXXXXX PRODUCTS GROUP, INC.,
its Sole Member
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board and
Chief Executive Officer
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
INDENTURE
S-1
EXHIBIT A
[FORM OF INITIAL NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT (A) IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) IT IS A NON-U.S. PURCHASER AND IS ACQUIRING THIS NOTE IN AN OFFSHORE
TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (C)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT, AND (2) AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH NOTE OR ANY INTEREST OR PARTICIPATION
HEREIN, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS
TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR
ANY PREDECESSOR OF SUCH NOTE), ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION
OF THE SECURITIES ACT, (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSE (C), (D) OR (F) TO REQUIRE THE DELIVERY
A-1
OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM. IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS NOTE SHALL BE COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-2
HAWK CORPORATION
8-3/4% SENIOR NOTES DUE 2014
CUSIP No. [___________]
No. [___________] $ [___________]
Hawk Corporation, a Delaware corporation, for value received promises to
pay to ___________________, or registered assigns, the principal sum of
____________ DOLLARS ($ [___________]) on November 1, 2014.
Interest Rate: 8-3/4% per annum
Interest Payment Dates: January 1 and July 1, commencing January 1,
2005
Record Dates: December 15 and June 15
Reference is made to the further provisions of this Note contained
on the reverse side of this Note, which will for all purposes have the same
effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.
HAWK CORPORATION
By: ____________________________________
Name:
Title:
Dated: November 1, 2004
A-3
TRUSTEE CERTIFICATE OF AUTHENTICATION
This is one of the 8-3/4% Senior Notes due 2014 referred to in the
within-mentioned Indenture.
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
Dated: November 1, 2004 By: ______________________________________
Authorized Officer
A-4
(REVERSE OF NOTE)
8-3/4% SENIOR NOTE DUE 2014
1. Interest.
Hawk Corporation (the "Company", which term includes any
Surviving Entity) promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Note will accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from and including the date of issuance. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing January 1,
2005. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. [FOR REGULATION S TEMPORARY GLOBAL NOTES INSERT: Until
this Regulation S Temporary Global Note is exchanged for one or more Regulation
S Permanent Global Notes, the Holder hereof shall not be entitled to receive
payments of interest hereon; until so exchanged in full, this Regulation S
Temporary Global Note shall in all other respects be entitled to the same
benefits as other Notes under the Indenture.]
2. Method of Payment.
The Company shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Notes are cancelled on registration of transfer or registration of exchange
after such Record Date, and on or before such Interest Payment Date. Holders
must surrender Notes to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, HSBC Bank USA, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. Neither the Company nor
any Affiliate of the Company shall act as Paying Agent or Registrar.
4. Indenture.
The Notes and the Guarantees were issued under an Indenture,
dated as of November 1, 2004 (the "Indenture"), among the Company, the
Guarantors named therein and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such tIme as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under
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the TIA. Notwithstanding anything to the contrary herein, the Notes are subject
to all such terms, and Holders of Notes are referred to the Indenture and the
TIA for a statement of such terms. The Notes are senior obligations of the
Company. Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein.
5. Redemption.
(a) Optional Redemption on or after November 1, 2009. Except as
described in Section 5(b), the Notes are not redeemable before November 1, 2009.
Thereafter, the Company may on any one or more occasions redeem the Notes. The
Notes will be redeemed at their option, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the following redemption prices (expressed
as percentages of the aggregate principal amount thereof) if redeemed during the
twelve-month period commencing on November 1 of the year set forth below:
Year Percentage
---- ----------
2009............................................................... 104.375%
2010............................................................... 103.281%
2011............................................................... 102.188%
2012............................................................... 101.094%
2013............................................................... 100.000%
In addition, the Company must pay accrued and unpaid interest and
Additional Interest, if any, on the aggregate principal amount of the Notes
redeemed to the Redemption Date.
(b) Optional Redemption upon Equity Offerings. At any time, or from
time to time, on or prior to November 1, 2008, the Company may, at its option,
use an amount not to exceed the net cash proceeds of one or more Equity
Offerings to redeem up to 35% of the aggregate principal amount of the Notes
ever issued under this Indenture. The Notes will be redeemed at a redemption
price of 108-3/4% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to the Redemption Date,
provided that:
(1) at least 65% of the original principal amount of Notes ever
issued under this Indenture remains outstanding immediately after any such
redemption; and
(2) the Company makes such redemption not more than 120 days after
the consummation of any such Equity Offering.
(c) Notice of Redemption. Notice of redemption will be mailed by
first-class mail at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address. If fewer than all of the Notes are to be redeemed, at any
time, selection of Notes for redemption will be made by the Trustee in
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compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed, or, if the Notes are not so listed, on a
pro rata basis, by lot or by such method as the Trustee deems to be fair and
appropriate; provided that no partial redemption will reduce the principal
amount of a Note not redeemed to a denomination of less than $1,000; and
provided, further, that any such partial redemption made with the proceeds of an
Equity Offering will be made only on a pro rata basis or on as nearly a pro rata
basis as practicable (subject to the procedures of the DTC or any other
depository) unless such method is otherwise prohibited. Notes in denominations
of $1,000 or more may be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date sufficient to pay such redemption
price plus accrued and unpaid interest and Additional Interest, if any, to the
Redemption Date, the Notes called for redemption will cease to bear interest
from and after such Redemption Date, and the only remaining right of the Holders
of such Notes will be to receive payment of the redemption price plus accrued
and unpaid interest and Additional Interest, if any, as of the Redemption Date
upon surrender to the Paying Agent of the Notes redeemed.
6. Offers to Purchase.
Sections 4.10 and 4.19 of the Indenture provide that after
certain Asset Sales, and upon the occurrence of a Change of Control and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
7. Registration Rights.
Pursuant to the Registration Rights Agreement among the
Company, the Guarantors and the Initial Purchaser of the Initial Notes, the
Company will be obligated to consummate an exchange offer. Upon such exchange
offering, the Holders of the Initial Notes shall have the right, subject to
compliance with securities laws, to exchange such Initial Notes for 8-3/4%
Senior Notes due 2014, which have been registered under the Securities Act, in
like principal amount and having terms identical in all material respects to the
Initial Notes. The Holders of the Initial Notes shall be entitled to receive
certain additional interest payments in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
8. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof. A Holder shall register
the transfer of or exchange of Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes, fees or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
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9. Persons Deemed Owners.
The registered Holder of a Note shall be treated as the owner
of it and the Notes of which it is composed for all purposes.
10. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent may pay the money
without interest thereon back to the Company. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
11. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S.
Legal Tender or U.S. Government Obligations sufficient to pay the principal of
and interest on the Notes to redemption or Maturity and complies with the other
provisions of the Indenture relating thereto, the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes, except for the rights of Holders to receive payments in respect of the
principal of, and premium, if any, interest and Additional Interest, if any, on
the Notes when such payments are due from the deposits referred to above.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Notes or the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Notes or the Guarantees to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes or
Guarantees in addition to or in place of certificated Notes or Guarantees,
comply with the TIA, or comply with Article Five or Section 10.04 of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
13. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and the Restricted Subsidiaries to, among other things, incur
additional Indebtedness or grant Liens, make payments in respect of their
Capital Stock or certain Indebtedness, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
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14. Successors.
When a successor assumes, in accordance with the Indenture,
all the obligations of its predecessor under the Notes, the Guarantees and the
Indenture, the predecessor will be released from those obligations.
15. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding may declare all the Notes to be due and payable in the manner, at
the time and with the effect provided in the Indenture. Holders of Notes may not
enforce the Indenture except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Notes unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
16. Trustee Dealings with Company.
Subject to the terms of the TIA and the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company, the
Subsidiaries or their respective Affiliates as if it were not the Trustee.
17. No Recourse Against Others.
No past, present or future stockholder, director, officer,
employee or incorporator, as such, of the Company or the Guarantors shall have
any liability for any obligation of the Company under the Notes, the Guarantees
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
18. Guarantees.
Payment of principal and interest and Additional Interest, if
any (including interest on overdue principal and overdue interest, if lawful),
is unconditionally guaranteed, jointly and severally, by each of the Guarantors.
19. Authentication.
This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
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20. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS NOTE, THE
GUARANTEES AND THE INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
21. Waiver of Jury Trial.
Each of the parties hereto and the holders (by their
acceptance of the Note) hereby irrevocably waives, to the fullest extent
permitted by law, any and all right to trial by jury in any action or proceeding
arising out of or in connection with the Indenture, this Note, the Guarantees or
the transactions contemplated by the Indenture.
22. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
Hawk Corporation, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000-0000.
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ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ______________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: _________________________ Signed: ______________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: ___________________________________
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) November 1, 2006, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
[CHECK ONE]
[ ] (1) to the Company or a subsidiary thereof; or
[ ] (2) pursuant to and in compliance with Rule 144A under the Securities Act;
or
[ ] (3) to an institutional "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) that has furnished to the
Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee);
or
[ ] (4) outside the United States to a person other than a "U.S. person" in
compliance with Rule 904 of Regulation S under the Securities Act; or
[ ] (5) pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
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? (6) pursuant to an effective registration statement under the Securities
Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (5) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Dated: ___________________________ Signed: _________________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: _____________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: _________________________ _______________________________________
NOTICE: To be executed by an executive
officer
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[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.19 of the Indenture, check the appropriate box:
[ ] Section 4.10
[ ] Section 4.19
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.10 or 4.19 of the Indenture, state the amount you
elect to have purchased:
$ ___________________________________
Dated: ______________________________ _____________________________________
NOTICE: The signature on this
assignment must correspond
with the name as it appears
upon the face of the within
Note in every particular
without alteration or
enlargement or any change
whatsoever and be guaranteed
by the endorser's bank or
broker.
Signature Guarantee:
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EXHIBIT B
[FORM OF EXCHANGE NOTE]
HAWK CORPORATION
8-3/4% SENIOR NOTES DUE 2014
CUSIP No. [___________]
No. [___________] $ [___________]
Hawk Corporation, a Delaware corporation, for value received promises to pay
to ___________________, or registered assigns, the principal sum of ____________
DOLLARS ($ [___________]) on November 1, 2014.
Interest Rate: 8-3/4% per annum
Interest Payment Dates: January 1 and July 1, commencing January 1, 2005
Record Dates: December 15 and June 15
Reference is made to the further provisions of this Note contained on the
reverse side of this Note, which will for all purposes have the same effect as
if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officer.
HAWK CORPORATION
By: _________________________________
Name:
Title:
Dated:
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TRUSTEE CERTIFICATE OF AUTHENTICATION
This is one of the 8-3/4% Senior Notes due 2014 referred to in the
within-mentioned Indenture.
HSBC BANK USA, NATIONAL ASSOCIATION,
as Trustee
Dated: By: _____________________________________
Authorized Officer
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(REVERSE OF NOTE)
8-3/4% SENIOR NOTE DUE 2014
1. Interest.
Hawk Corporation (the "Company", which term includes any
Surviving Entity) promises to pay interest on the principal amount of this Note
at the rate per annum shown above. Interest on the Note will accrue (a) from the
later of (i) the last interest payment date on which interest was paid on the
note surrendered in exchange for this Note (the "Surrendered Note"), or (ii) if
the Surrendered Note is surrendered for exchange on a date in a period that
includes the record date for an interest payment date to occur on or after the
date of such exchange and as to which interest will be paid, the date of such
interest payment date; or (b) if no interest has been paid on such Surrendered
Note, from the Issue Date. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing January 1, 2005. Interest will
be computed on the basis of a 360-day year comprised of twelve 30-day months.
2. Method of Payment.
The Company shall pay interest on the Notes (except defaulted
interest) to the Persons who are the registered Holders at the close of business
on the Record Date immediately preceding the Interest Payment Date even if the
Notes are cancelled on registration of transfer or registration of exchange
after such Record Date, and on or before such Interest Payment Date. Holders
must surrender Notes to a Paying Agent to collect principal payments. The
Company shall pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts
("U.S. Legal Tender"). However, the Company may pay principal and interest by
check payable in such U.S. Legal Tender. The Company may deliver any such
interest payment to the Paying Agent or to a Holder at the Holder's registered
address.
3. Paying Agent and Registrar.
Initially, HSBC Bank USA, National Association (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders. Neither the Company nor
any Affiliate of the Company shall act as Paying Agent or Registrar.
4. Indenture.
The Notes and the Guarantees were issued under an Indenture,
dated as of November 1, 2004 (the "Indenture"), among the Company, the
Guarantors named therein and the Trustee. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such tIme as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Notes are subject to all such
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terms, and Holders of Notes are referred to the Indenture and the TIA for a
statement of such terms. The Notes are senior obligations of the Company. Each
Holder, by accepting a Note, agrees to be bound by all of the terms and
provisions of the Indenture, as the same may be amended from time to time.
Capitalized terms herein are used as defined in the Indenture unless otherwise
defined herein.
5. Redemption.
(a) Optional Redemption on or after November 1, 2009. Except as
described in Section 5(b), the Notes are not redeemable before November 1, 2009.
Thereafter, the Company may on any one or more occasions redeem the Notes. The
Notes will be redeemed at their option, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the following redemption prices (expressed
as percentages of the aggregate principal amount thereof) if redeemed during the
twelve-month period commencing on November 1 of the year set forth below:
Year Percentage
---- ----------
2009.................................................................... 104.375%
2010.................................................................... 103.281%
2011.................................................................... 102.188%
2012.................................................................... 101.094%
2013.................................................................... 100.000%
In addition, the Company must pay accrued and unpaid interest and
Additional Interest, if any, on the aggregate principal amount of the Notes
redeemed to the Redemption Date.
(b) Optional Redemption upon Equity Offerings. At any time, or from
time to time, on or prior to November 1, 2008, the Company may, at its option,
use an amount not to exceed the net cash proceeds of one or more Equity
Offerings to redeem up to 35% of the aggregate principal amount of the Notes
ever issued under this Indenture. The Notes will be redeemed at a redemption
price of 108-3/4% of the aggregate principal amount thereof, plus accrued and
unpaid interest and Additional Interest, if any, to the Redemption Date,
provided that:
(1) at least 65% of the original principal amount of Notes ever
issued under this Indenture remains outstanding immediately after any such
redemption; and
(2) the Company makes such redemption not more than 120 days after
the consummation of any such Equity Offering.
(c) Notice of Redemption. Notice of redemption will be mailed by
first-class mail at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address. If fewer than all of the Notes are to be redeemed, at any
time, selection of Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which
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the Notes are listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee deems to be fair and appropriate;
provided that no partial redemption will reduce the principal amount of a Note
not redeemed to a denomination of less than $1,000; and provided, further, that
any such partial redemption made with the proceeds of an Equity Offering will be
made only on a pro rata basis or on as nearly a pro rata basis as practicable
(subject to the procedures of the DTC or any other depository) unless such
method is otherwise prohibited. Notes in denominations of $1,000 or more may be
redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such Redemption Date sufficient to pay such redemption
price plus accrued and unpaid interest and Additional Interest, if any, to the
Redemption Date, the Notes called for redemption will cease to bear interest
from and after such Redemption Date, and the only remaining right of the Holders
of such Notes will be to receive payment of the redemption price plus accrued
and unpaid interest and Additional Interest, if any, as of the Redemption Date
upon surrender to the Paying Agent of the Notes redeemed.
6. Offers to Purchase.
Sections 4.10 and 4.19 of the Indenture provide that after
certain Asset Sales, and upon the occurrence of a Change of Control and subject
to further limitations contained therein, the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.
7. Denominations; Transfer; Exchange.
The Notes are in registered form, without coupons, in
denominations of $1,000 and integral multiples thereof. A Holder shall register
the transfer of or exchange of Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes, fees or similar
governmental charges payable in connection therewith as permitted by the
Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.
8. Persons Deemed Owners.
The registered Holder of a Note shall be treated as the owner
of it and the Notes of which it is composed for all purposes.
9. Unclaimed Money.
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee and the Paying Agent may pay the money
without interest thereon back to the Company. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
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10. Discharge Prior to Redemption or Maturity.
If the Company at any time deposits with the Trustee U.S.
Legal Tender or U.S. Government Obligations sufficient to pay the principal of
and interest on the Notes to redemption or Maturity and complies with the other
provisions of the Indenture relating thereto, the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes, except for the rights of Holders to receive payments in respect of the
principal of, and premium, if any, interest and Additional Interest, if any, on
the Notes when such payments are due from the deposits referred to above.
11. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture, the Notes or the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or Event of Default or noncompliance with
any provision may be waived with the written consent of the Holders of a
majority in aggregate principal amount of the Notes then outstanding. Without
consent of any Holder, the parties thereto may amend or supplement the
Indenture, the Notes or the Guarantees to, among other things, cure any
ambiguity, defect or inconsistency, provide for uncertificated Notes or
Guarantees in addition to or in place of certificated Notes or Guarantees,
comply with the TIA, or comply with Article Five or Section 10.04 of the
Indenture or make any other change that does not adversely affect in any
material respect the rights of any Holder of a Note.
12. Restrictive Covenants.
The Indenture imposes certain limitations on the ability of
the Company and the Restricted Subsidiaries to, among other things, incur
additional Indebtedness or grant Liens, make payments in respect of their
Capital Stock or certain Indebtedness, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Subsidiaries, merge or
consolidate with any other Person, sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets or adopt a plan of
liquidation. Such limitations are subject to a number of important
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
13. Successors.
When a successor assumes, in accordance with the Indenture,
all the obligations of its predecessor under the Notes, the Guarantees and the
Indenture, the predecessor will be released from those obligations.
14. Defaults and Remedies.
If an Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding may declare all the Notes to be due and payable in the manner, at
the time and with the effect provided in the Indenture. Holders of Notes may not
enforce the Indenture except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Notes unless it has received
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indemnity satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Notes notice of any
continuing Default or Event of Default (except a Default in payment of principal
or interest) if it determines that withholding notice is in their interest.
15. Trustee Dealings with Company.
Subject to the terms of the TIA and the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Notes and may otherwise deal with the Company, the
Subsidiaries or their respective Affiliates as if it were not the Trustee.
16. No Recourse Against Others.
No past, present or future stockholder, director, officer,
employee or incorporator, as such, of the Company or the Guarantors shall have
any liability for any obligation of the Company under the Notes, the Guarantees
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder of a Note by accepting a Note waives
and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
17. Guarantees.
Payment of principal and interest and Additional Interest, if
any (including interest on overdue principal and overdue interest, if lawful),
is unconditionally guaranteed, jointly and severally, by each of the Guarantors.
18. Authentication.
This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.
19. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS NOTE, THE
GUARANTEES AND THE INDENTURE, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
20. Waiver of Jury Trial.
Each of the parties hereto and the holders (by their
acceptance of the Note) hereby irrevocably waives, to the fullest extent
permitted by law, any and all right to trial by jury in any action or proceeding
arising out of or in connection with the Indenture, this Note, the Guarantees or
the transactions contemplated by the Indenture.
B-7
21. Abbreviations and Defined Terms.
Customary abbreviations may be used in the name of a Holder of
a Note or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
Hawk Corporation, 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxx 00000-0000.
B-8
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint _______________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated: ___________________ Signed: _____________________________
(Sign exactly as your name appears
on the other side of this Note)
Signature Guarantee: _________________________
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) November 1, 2006, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
[CHECK ONE]
[ ] (1) to the Company or a subsidiary thereof; or
[ ] (2) pursuant to and in compliance with Rule 144A under the Securities Act;
or
[ ] (3) to an institutional "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act) that has furnished to the
Trustee a signed letter containing certain representations and
agreements (the form of which letter can be obtained from the Trustee);
or
[ ] (4) outside the United States to a person other than a "U.S. person" in
compliance with Rule 904 of Regulation S under the Securities Act; or
[ ] (5) pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
B-9
? (6) pursuant to an effective registration statement under the Securities
Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (5) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
If none of the foregoing boxes is checked, the Trustee or Registrar
shall not be obligated to register this Note in the name of any person other
than the Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Dated: ___________________________ Signed: ______________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated: ___________________ _______________________________________________
NOTICE: To be executed by an executive officer
B-10
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.19 of the Indenture, check the appropriate box:
[ ] Section 4.10
[ ] Section 4.19
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.10 or 4.19 of the Indenture, state the amount you
elect to have purchased:
$ __________________________________
Dated: ________________________ ________________________________________
NOTICE: The signature on this
assignment must correspond
with the name as it appears
upon the face of the within
Note in every particular
without alteration or
enlargement or any change
whatsoever and be guaranteed
by the endorser's bank or
broker.
Signature Guarantee: ________________
B-11
EXHIBIT C
[FORM OF LEGEND FOR GLOBAL NOTES]
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
[If a Regulation S Temporary Global Note, insert: THE RIGHTS
ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS
AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE
ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.]
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
C-1
EXHIBIT D
[FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS TO NON-QIB ACCREDITED INVESTORS]
___________'____
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust
Re: 8-3/4% Senior Notes due 2014 (the "Notes") of Hawk
Corporation, a Delaware corporation (the "Company")
Ladies and Gentlemen:
In connection with our proposed purchase of $_____________ aggregate
principal amount of the Notes, we confirm that:
1. We have received a copy of the Offering Circular (the "Offering
Circular"), dated October 25, 2004, relating to the Notes and such other
information as we deem necessary in order to make our investment decision. We
acknowledge that we have read and agreed to the matters stated in the section
entitled "Notice to Investors" of the Offering Circular.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture dated
as of November 1, 2004 relating to the Notes (the "Indenture") and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with, such restrictions and conditions
and the Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell or otherwise transfer any Notes prior to the date which
is within two years after the original issuance of the Notes or the last date on
which the Note is owned by the Company or any affiliate of the Company, we will
do so only (i) to the Company or any of its subsidiaries, (ii) inside the United
States in accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act), (iii)
inside the United States to an institutional "accredited investor" (as defined
below) provided that, prior to such transfer, the transferee furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you a signed letter
containing certain representations and agreements relating to the restrictions
on transfer of the Notes, substantially in the form of this letter, (iv) outside
the United States in accordance with Rule 904
D-1
of Regulation S under the Securities Act, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available) or
(vi) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes from
us a notice advising such purchaser that resales of the Notes are restricted as
stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974), except as permitted in the
section entitled "Notice to Investors" of the Offering Circular.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certification, legal opinions
and other information as you and the Company may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend to the foregoing
effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or their investment, as the case may be.
7. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.
8. We are not acquiring Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the securities
laws of any state of the United States or any other applicable jurisdiction;
provided that the disposition of our property and the property of any accounts
for which we are acting as fiduciary shall remain at all times within our and
their control.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby, and we agree to notify you promptly if
any of our representations or warranties herein cease to be accurate and
complete.
D-2
This letter shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to principles of conflicts of
laws.
Very truly yours,
[Name of Transferee]
By: ___________________________________
Authorized Signature
D-3
EXHIBIT E
[FORM OF CERTIFICATE TO BE
DELIVERED IN CONNECTION WITH
TRANSFERS PURSUANT TO REGULATION S]
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust
Re: 8-3/4% Senior Notes due 2014 (the "Notes") of Hawk Corporation
(the "Company")
Ladies and Gentlemen:
In connection with our proposed sale of $________________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
1. the offer of the Notes was not made to a person in the United
States;
2. either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States, or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;
3. no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable;
4. the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
5. we have advised the transferee of the transfer restrictions
applicable to the Notes.
E-1
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferee]
By: ____________________________________
Authorized Signature
E-2
