Exhibit 4.5
INDENTURE
INDENTURE dated as of November 21, 2001 between TELEX COMMUNICATIONS,
INC., a Delaware corporation (the "Company"), and BNY MIDWEST TRUST COMPANY, an
Illinois trust company (the "Trustee").
For good and valuable consideration, the receipt of which is hereby
acknowledged, each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's 13%
Senior Subordinated Discount Notes due 2006 (the "Initial Securities") and, when
and if issued as provided in the Exchange and Registration Rights Agreement of
even date herewith, the Company's 13% Senior Subordinated Discount Notes due
2006, Series A (the "Exchange Securities", and together with the Initial
Securities, the "Securities").
ARTICLE 1
Definitions and Incorporation by Reference
Section 1.1. Definitions.
"Accreted Value" means, as of any date of determination prior to November
15, 2006, with respect to any Security, the sum of (i) the deemed issue price of
such Security and (ii) the portion of the excess of the principal amount of such
Security over such deemed issue price which shall have been accreted thereon
through such date, such amount to be so accreted on a daily basis at the rate of
13% per annum of the deemed issue price of such Security, compounded
semi-annually on each May 15 and November 15 from the Issue Date through the
date of determination, computed on the basis of a 360-day year of twelve 30-day
months. The Accreted Value of any Security on or after November 15, 2006 shall
be 100% of the principal amount thereof.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock of
any Person that at such time is a Restricted Subsidiary, acquired from a third
party; provided, however, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
"Additional Mezzanine Indebtedness" means (i) Indebtedness (exclusive of
the Senior Secured Notes) in an aggregate initial principal amount not to exceed
from time to time $10 million which may be issued from time to time on such
terms as the Company shall determine; (ii) any increase in the amount of the
Indebtedness described in the foregoing clause (i) resulting from any accrual,
compounding or payment-in-kind of interest under such Indebtedness which is not
paid currently in cash, which accretes or which is added to the principal amount
of such Indebtedness; and (iii) any Refinancing Indebtedness in respect of such
Indebtedness and amounts under the foregoing clause (ii), including without
limitation any refunding, restructuring, replacement, substitution, renewal or
modification of such
Indebtedness. "Additional Mezzanine Indebtedness" shall be on such terms as the
Company shall agree from time to time and may be secured or unsecured and may be
Senior Indebtedness and Designated Senior Indebtedness.
"Affiliate" of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Premium" means, with respect to a Security at any Redemption
Date, the greater of (i) 1.0% of the then outstanding Accreted Value of such
Security and (ii) the excess of (A) the present value of the principal amount of
the Security payable on the Scheduled Maturity Date, computed using a discount
rate equal to the Treasury Rate plus 75 basis points, over (B) the
then-outstanding Accreted Value of such Security; provided, however, that in no
case shall the Applicable Premium be less than zero.
"Asset Disposition" means any sale, lease, transfer or other disposition
of shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares, or (in the case of a Foreign Subsidiary) to the extent
required by applicable law), property or other assets (each referred to for the
purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition of inventory,
equipment, obsolete assets or surplus personal property in the ordinary course
of business, (iii) the sale of Temporary Cash Investments or Cash Equivalents in
the ordinary course of business, (iv) dispositions with a fair market value not
exceeding $500,000 in the aggregate in any fiscal year, (v) the sale or discount
(with or without recourse, and on commercially reasonable terms) of accounts
receivable or notes receivable arising in the ordinary course of business, or
the conversion or exchange of accounts receivable for notes receivable, (vi) the
licensing of intellectual property in the ordinary course of business, (vii) for
purposes of Section 4.6 only, a disposition subject to Section 4.4, or (viii) a
disposition of property or assets that is governed by Section 5.1.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as
at the time of determination, the present value (discounted at the interest rate
assumed in making calculations in accordance with FAS 13) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding on the
Issue Date or thereafter incurred, payable under or in respect of the Senior
Credit Facility, including without limitation principal, premium (if any),
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any
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Restricted Subsidiary whether or not a claim for post-filing interest is allowed
in such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees, other monetary obligations of any nature and all other amounts
payable thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banking institutions are authorized or required by law to close
in New York City.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease.
"Cash Equivalents" means any of the following: (a) securities issued or
fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (b) time deposits, certificates of deposit or bankers'
acceptances of (i) any lender under the Senior Credit Agreement or (ii) any
commercial bank having capital and surplus in excess of $500.0 million and the
commercial paper of the holding company of which is rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Xxxxx'x
(or if at such time neither is issuing ratings, then a comparable rating of
another nationally recognized rating agency), (c) commercial paper rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Xxxxx'x (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency) and (d)
investments in money market funds complying with the risk limiting conditions of
Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of
1940, as amended.
"Change of Control" means the occurrence of any of the following events:
(i) prior to the earlier of the first public offering of Voting
Stock of the Company or the effectiveness of a Shelf Registration
Statement with respect to the New Capital Stock, either (x) Permitted
Holders cease to be the "beneficial owner" or "beneficial owners" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of more than 35% of the total voting power of the Voting Stock
of the Company, or (y) Permitted Holders cease to be entitled by voting
power, contract or otherwise to elect or cause the election of directors
of the Company having a majority of the total voting power of the Board of
Directors, in each case, whether as a result of issuance of securities of
the Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by any Permitted
Holder or otherwise (for purposes of this clause (i) and clause (ii)
below, Permitted Holders shall be deemed to beneficially own any Voting
Stock of an entity (the "specified entity" held by any other entity (the
"parent entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, a majority of the Voting Stock of the
parent entity);
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(ii) following the earlier of the first public offering of Voting
Stock of the Company or the effectiveness of a Shelf Registration
Statement with respect to the New Capital Stock, any "Person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), other than
one or more Permitted Holders, is or becomes the beneficial owner (as
defined in clause (i) above, except that a Person shall be deemed to have
"beneficial ownership" of all shares that any such Person has the right to
acquire within one year), directly or indirectly, of more than 35% of the
Voting Stock of the Company, provided that the Permitted Holders
beneficially own (as defined in clause (i) above), directly or indirectly,
in the aggregate a lesser percentage of the Voting Stock of the Company
than such other Person and do not have the right or ability by voting
power, contract or otherwise to elect or designate for election a majority
of the Board of Directors; or
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a vote of a majority of the directors of the Company then still in office
who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in
office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Telex Communications, Inc., a Delaware corporation, and
any successor thereto.
"Consolidated Coverage Ratio" as of any date of determination means the
ratio of (i) the aggregate amount of EBITDA of the Company and its Restricted
Subsidiaries for the period of the most recent four consecutive fiscal quarters
ending prior to the date of such determination for which consolidated financial
statements of the Company are available to (ii) Consolidated Interest Expense
for such four fiscal quarters (in each case, determined, for each fiscal quarter
(or portion thereof) of the four fiscal quarters ending prior to the Issue Date,
on a pro forma basis to give effect to the Restructuring Transactions as if it
had occurred at the beginning of such four-quarter period); provided, however,
that:
(1) if the Company or any Restricted Subsidiary (x) has Incurred any
Indebtedness since the beginning of such period that remains outstanding
on such date of determination or if the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of
such period (except that in making such computation, the amount of
Indebtedness under any revolving credit facility outstanding on the date
of such calculation shall be computed based on (A) the average daily
balance of such Indebtedness during such four fiscal quarters or such
shorter period for which such facility was outstanding or (B) if such
facility was created after the end of such four fiscal quarters, the
average daily balance of such Indebtedness during the period from the date
of creation of such facility to the date of such calculation) and the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period, or (y) has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of the period that is no longer outstanding on such date of
determination, or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio involves a
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discharge of Indebtedness (in each case other than Indebtedness Incurred
under any revolving credit facility unless such Indebtedness has been
permanently repaid), EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to
such discharge of such Indebtedness, including with the proceeds of such
new Indebtedness, as if such discharge had occurred on the first day of
such period,
(2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition of any company
or any business or any group of assets constituting an operating unit of a
business, the EBITDA for such period shall be reduced by an amount equal
to the EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Disposition for such period or increased by an
amount equal to the EBITDA (if negative) directly attributable thereto for
such period and Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in
connection with such Asset Disposition for such period (and, if the
Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness
of such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale),
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary, or
otherwise acquired any company or any business or any group of assets
constituting an operating unit of a business, including any such
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period, and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition or any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (2) or
(3) above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition of assets occurred on the first day
of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an Asset Disposition, Investment or acquisition of assets, or any transaction
governed by the provisions of Article 5, or the amount of income or earnings
relating thereto and the amount of Consolidated Interest Expense associated with
any Indebtedness Incurred or repaid, repurchased, defeased or otherwise
discharged in connection therewith, the pro forma calculations in respect
thereof shall be as determined in good faith by a responsible financial or
accounting Officer of the Company, based on reasonable assumptions. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term as at the
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date of determination in excess of 12 months). If any Indebtedness bears, at the
option of the Company or a Restricted Subsidiary, a fixed or floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness shall be computed by applying, at the option of the Company or such
Restricted Subsidiary, either a fixed or floating rate. If any Indebtedness
which is being given pro forma effect was Incurred under a revolving credit
facility, the interest expense on such Indebtedness shall be computed based upon
the average daily balance of such Indebtedness during the applicable period.
"Consolidated Interest Expense" means, for any period, the total
consolidated interest expense of the Company and its Restricted Subsidiaries,
the Company and its consolidated Restricted Subsidiaries, determined in
accordance with GAAP, minus, to the extent included in such interest expense,
amortization or write-off of financing costs, and plus, to the extent incurred
by the Company and its Restricted Subsidiaries in such period but not included
in such interest expense, without duplication, (i) interest expense attributable
to Capitalized Lease Obligations and the interest component of rent expense
associated with Attributable Debt in respect of the relevant lease giving rise
thereto, determined as if such lease were a capitalized lease, in accordance
with GAAP, (ii) amortization of debt discount, (iii) interest in respect of
Indebtedness of any other Person that has been Guaranteed by the Company or any
Restricted Subsidiary, but only to the extent that such interest is actually
paid by the Company or any Restricted Subsidiary, (iv) non-cash interest
expense, (v) net costs associated with Hedging Obligations, (vi) the product of
(A) Preferred Stock dividends in respect of all Preferred Stock of Domestic
Subsidiaries of the Company and Disqualified Stock of the Company held by
Persons other than the Company or a Restricted Subsidiary multiplied by (B) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
the Company, expressed as a decimal, in each case, determined on a consolidated
basis in accordance with GAAP; and (vii) the cash contributions to any employee
stock ownership plan or similar trust to the extent such contributions are used
by such plan or trust to pay interest to any Person (other than the Company or
any Restricted Subsidiary) on Indebtedness Incurred by such plan or trust;
provided, however, that there shall be excluded therefrom any such interest
expense of any Unrestricted Subsidiary to the extent the related Indebtedness is
not Guaranteed or paid by the Company or any Restricted Subsidiary. For purposes
of the foregoing, gross interest expense shall be determined after giving effect
to any net payments made or received by the Company and its Subsidiaries with
respect to Interest Rate Agreements.
"Consolidated Net Income" means, for any period, the consolidated net
income (loss) of the Company and its Restricted Subsidiaries, determined in
accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to a Restricted Subsidiary, to the limitations
contained in clause (iii) below) and (B) the Company's equity in the net
loss of such Person shall be included to the extent of the aggregate
Investment of the Company or any of its Restricted Subsidiaries in such
Person,
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(ii) any net income (loss) of any Person acquired by the Company or
a Restricted Subsidiary in a pooling of interests transaction for any
period prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except that
(A) subject to the limitations contained in clause (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash that could have been distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend (subject, in the case of a dividend
that could have been made to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the net loss of such
Restricted Subsidiary shall be included to the extent of the aggregate
Investment of the Company or any of its other Restricted Subsidiaries in
such Restricted Subsidiary,
(iv) any gain or loss realized upon the sale or other disposition of
any asset of the Company or its consolidated Restricted Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) that is not sold or
otherwise disposed of in the ordinary course of business,
(v) any extraordinary gain or loss, and
(vi) the cumulative effect of a change in accounting principles.
"Consolidated Tangible Assets" means, as of any date of determination, the
total assets, less goodwill and other intangibles (other than patents,
trademarks, copyrights, licenses and other intellectual property), shown on the
balance sheet of the Company and its Restricted Subsidiaries as of the most
recent date for which such a balance sheet is available, determined on a
consolidated basis in accordance with GAAP.
"Consolidation" means the consolidation of the accounts of each of the
Restricted Subsidiaries with those of the Company in accordance with GAAP;
provided, however, that "Consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary, but the interest of the Company or any
Unrestricted Subsidiary will be accounted for as an investment. The term
"Consolidated" has a correlative meaning.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement or arrangements
(including derivative agreements or arrangements) as to which such Person is a
party or a beneficiary.
"Default" means any event or condition that is, or after notice or passage
of time or both would be, an Event of Default as defined in Section 6.1.
"Definitive Securities" means Securities that are substantially in the
form of Exhibit A or Exhibit B attached hereto that do not include the
information called for by footnote 1 thereof.
"Depository" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.3 as the
Depository with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the
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applicable provisions of this Indenture, and thereafter, "Depository" shall mean
or include such successor.
"Designated Senior Indebtedness" means (i) the Bank Indebtedness, (ii) the
Senior Secured Notes, (iii) the Additional Mezzanine Indebtedness, and (iv) any
other Senior Indebtedness which, at the date of determination, has an aggregate
principal amount to or under which, at the date of determination, the holders
thereof are committed to lend up to, at least $10.0 million and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
(other than Management Stock) that by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable or exercisable) or
upon the happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible or
exchangeable for Indebtedness or Disqualified Stock or (iii) is redeemable at
the option of the holder thereof, in whole or in part, in each case on or prior
to the 91st day after the Stated Maturity of the Securities.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company other
than a Foreign Subsidiary.
"EBITDA" means, for any period, the Consolidated Net Income for such
period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense and (iv) amortization of intangibles and
other non-cash charges or non-cash losses.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement dated as of November 21, 2001 entered into by the
Company for the benefit of the Initial Holders, as such agreement may be
amended, modified, or supplemented from time to time in accordance with the
terms thereof.
"Exchange Offer" means the "Exchange Offer" described in the Amended and
Supplemented Consent Solicitation Statement and Exchange Offering Memorandum of
the Company dated October 24, 2001.
"Foreign Subsidiary" means (a) any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
state thereof or the District of Columbia and (b) any Restricted Subsidiary of
the Company that has no material assets other than securities of one or more
Foreign Subsidiaries, and other assets relating to an ownership interest in any
such securities or Subsidiaries.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect on the Issue Date (for purposes of the definitions of
the terms "Consolidated Coverage Ratio," "Consolidated Interest Expense,"
"Consolidated Net Income" and "EBITDA," all defined terms in the Indenture to
the extent used in or relating to any of the foregoing definitions, and all
ratios and computations based on any of the foregoing definitions) and as in
effect from time to time (for all other purposes of the Indenture), including
those set forth in the opinions and pronouncements of the Accounting Principles
Board of the American Institute of
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Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
approved by a significant segment of the accounting profession all ratios and
computations based on GAAP contained in the Indenture shall be computed in
conformity with GAAP.
"Global Security" means a Security that is substantially in the form of
Exhibit A or Exhibit B hereto that includes the information called for by
footnote 1 thereof.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness or other non-financial
obligation of any other Person, including any such obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
such other obligation of such other Person (whether arising by virtue of
partnership arrangements, or by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor Senior Indebtedness" means the following obligations, whether
outstanding on the date of the Indenture or thereafter issued, without
duplication: (i) any Guarantee of the Bank Indebtedness by a Note Guarantor and
all other Guarantees by such Note Guarantor of Senior Indebtedness of the
Company or Guarantor Senior Indebtedness for any other Note Guarantor; and (ii)
all obligations consisting of the principal of and premium, if any, and accrued
and unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Note Guarantor
regardless of whether post-filing interest is allowed in such proceeding) on,
and fees and other amount owing in respect of, all other Indebtedness of the
Note Guarantor, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is expressly provided that the
obligations in respect of such Indebtedness are not senior in right of payment
to the obligations of such Note Guarantor under the Note Guarantee; provided,
however, that Guarantor Senior Indebtedness shall not include (1) any
obligations of such Note Guarantor to the Note Guarantor or any other Subsidiary
of the Note Guarantor, (2) any liability for Federal, state, local, foreign or
other taxes owed or owing by such Note Guarantor, (3) any accounts payable or
other liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of such Note Guarantor that is expressly subordinate in right
of payment to any of the Indebtedness of such Note Guarantor, including any
Guarantor Senior Subordinated Indebtedness and Guarantor Subordinated
Obligations of such Note Guarantor, or (5) any Capital Stock.
"Guarantor Senior Subordinated Indebtedness" means, with respect to a Note
Guarantor, the obligations of such Note Guarantor under the Note Guarantee and
any other Indebtedness of such Note Guarantor that specifically provides that
such Indebtedness is to rank pari passu in right of payment with the obligations
of such Note Guarantor under the Note Guarantee and is not expressly
subordinated by its terms in right of payment to any
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Indebtedness of such Note Guarantor which is not Guarantor Senior Indebtedness
of such Note Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a Note
Guarantor, any Indebtedness of such Note Guarantor (whether outstanding on the
Issue Date or thereafter Incurred) which is expressly subordinate in right of
payment to the obligations of such Note Guarantor under its Note Guarantee
pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered in the Register.
"Incur" means issue, assume, enter into any Guarantee of, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. Any
Indebtedness issued at a discount (including Indebtedness on which interest is
payable through the issuance of additional Indebtedness) shall be deemed
incurred at the time of original issuance of the Indebtedness at the initial
accreted amount thereof.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal of indebtedness of such Person for borrowed money,
(ii) the principal of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(iii) all reimbursement obligations of such Person (including
reimbursement obligations) in respect of letters of credit or other
similar instruments (the amount of such obligations being equal at any
time to the aggregate then undrawn and unexpired amount of such letters of
credit or other instruments plus the aggregate amount of drawings
thereunder that have not then been reimbursed),
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than one year after the date of placing such
property in final service or taking final delivery and title thereto or
the completion of such services,
(v) all Capitalized Lease Obligations and Attributable Debt of such
Person,
(vi) the redemption, repayment or other repurchase amount of such
Person with respect to any Disqualified Stock or (if such Person is a
Subsidiary of the Company) any Preferred Stock of such Subsidiary, but
excluding, in each case, any accrued dividends (the amount of such
obligation to be equal at any time to the maximum fixed involuntary
redemption, repayment or repurchase price for such Capital Stock, or if
such Capital Stock has no such fixed price, to the involuntary redemption,
repayment or repurchase price therefor calculated in accordance with the
terms thereof as if then redeemed, repaid or repurchased, and if such
price is based upon or measured by the fair market value of such
10
Capital Stock, such fair market value shall be as determined in good faith
by the Board of Directors or the board of directors of the issuer of such
Capital Stock),
(vii) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of Indebtedness of such Person
shall be the lesser of (A) the fair market value of such asset at such
date of determination and (B) the amount of such Indebtedness of such
other Persons,
(viii) all Indebtedness of other Persons to the extent Guaranteed by
such Person, and
(ix) to the extent not otherwise included in this definition, net
Hedging Obligations of such Person (the amount of any such obligation to
be equal at any time to the termination value of such agreement or
arrangement giving rise to such Hedging Obligation that would be payable
by such Person at such time).
The amount of Indebtedness of any Person at any date shall be determined
as set forth above or otherwise provided in this Indenture, or otherwise in
accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Initial Holders" means the record or beneficial holders of Old Senior
Subordinated Notes to whom the Securities are delivered in exchange for such Old
Senior Subordinated Notes, whether delivered pursuant to Exchange Offer or
delivered subsequent thereto.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement (including derivative agreements or arrangements) as to which
such Person is party or a beneficiary.
"Investment" in any Person by any other Person means any direct or
indirect advance, loan or other extension of credit (other than to customers,
directors, officers or employees of any Person in the ordinary course of
business) or capital contribution (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) to, or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by, such Person. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.4, (i) "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 in an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) 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 (ii) 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.
"Investors" means Greenwich Street Capital Partners, L.P., Greenwich
Street Capital Offshore Fund, Ltd., The Travelers Insurance Company, The
Travelers Life and Annuity
11
Company, TRV Employees Fund, L.P. and the parties that purchased equity
interests in the Company on the date of the Recapitalization.
"Issue Date" means the date on which the Securities are originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Management Agreements" means, collectively, the Consulting Agreement, the
Fee Agreement and the Indemnification Agreement, each between the Company and
Greenwich Street Capital Partners, Inc. (and its permitted successors and
assigns thereunder), as each may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms thereof and of the
Indenture.
"Management Investors" means the officers, directors, employees and other
members of the management of the Company or any of its Subsidiaries, or family
members or relatives thereof, or trusts for the benefit of any of the foregoing,
or any of their heirs, executors, successors and legal representatives, who at
any date beneficially own or have the right to acquire, directly or indirectly,
Capital Stock of the Company.
"Management Stock" means Capital Stock of the Company, or options,
warrants or other rights in respect thereof, held by any of the Management
Investors.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other non-cash form) therefrom, in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP, as a consequence of such Asset
Disposition, (ii) all payments made, and all installment payments required to be
made, on any Indebtedness that is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon such assets, or that
must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, or to any other Person (other than the Company or a
Restricted Subsidiary) owning a beneficial interest in the assets disposed of in
such Asset Disposition and (iv) appropriate amounts to be provided as a reserve,
in accordance with GAAP, against any liabilities associated with the assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of any
securities of the Company or any Subsidiary by the Company or any Subsidiary, or
any capital contribution, means the cash proceeds of such issuance, sale or
contribution net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and
12
brokerage, consultant and other fees actually incurred in connection with such
issuance, sale or contribution and net of taxes paid or payable as a result
thereof.
"New Capital Stock" means (i) the Series B Preferred Stock, par value
$0.01 per share, of the Company (the "Series B Preferred Stock") issued by the
Company in exchange for the Old Senior Subordinated Notes, whether issued
pursuant to the Exchange Offer or issued subsequent thereto, together with any
Capital Stock of the Company issued in respect of the Series B Preferred Stock
upon conversion of the Series B Preferred Stock, and (ii) the Series B Preferred
Stock and any other Capital Stock of the Company issued upon exercise of the New
Warrants.
"New Warrants" means the warrants issued by the Company in exchange for
the Old Senior Subordinated Notes, whether issued pursuant to the Exchange Offer
or issued subsequent thereto.
"Note Guarantee" means any guarantee that may from time to time be
executed and delivered by a Subsidiary of the Company pursuant to Section 4.11.
"Note Guarantor" means any Subsidiary that has issued a Note Guarantee.
"Officer" means the President, Chief Financial Officer, any Vice
President, Controller or Treasurer of the Company.
"Officer's Certificate" means a certificate signed by one Officer.
"Old Senior Subordinated Notes" means the 10-1/2% Senior Subordinated
Notes Due 2007 of the Company and the 11% Senior Subordinated Notes Due 2007 of
the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holder" means any of the following: (i) any of the Investors,
Xxxxx Xxxxxx Holdings Inc. and their respective Affiliates; (ii) any investment
fund or vehicle managed, sponsored or advised by Greenwich Street Capital
Partners, Inc., The Travelers Insurance Company, The Travelers Life and Annuity
Company, Xxxxx Xxxxxx Holdings Inc. or any of their respective Affiliates; (iii)
any limited or general partners of, or other investors in, any of the Investors
and their respective Affiliates, or any such investment fund or vehicle; (iv)
any Person acting in the capacity of an underwriter in connection with a public
or private offering of Capital Stock of the Company; and (v) any Person who
acquires record or beneficial ownership of New Capital Stock or New Warrants in
exchange for the Old Senior Subordinated Notes, whether such New Capital Stock
or New Warrants are issued pursuant to the Exchange Offer or issued subsequent
thereto, or who acquires record or beneficial ownership of New Capital Stock (or
Voting Securities) upon exercise of such New Warrants, and such Person's
respective Affiliates.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in, or consisting of, any of the following:
(i) a Restricted Subsidiary, the Company or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary;
13
(ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted
Subsidiary;
(iii) Temporary Cash Investments or Cash Equivalents;
(iv) receivables owing to the Company or any Restricted Subsidiary,
if created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(v) securities or other Investments received as consideration in
sales or other dispositions of property or assets, including Asset
Dispositions made in compliance with Section 4.6;
(vi) securities or other Investments received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary, or as a result of foreclosure, perfection or
enforcement of any Lien, or in satisfaction of judgments, including in
connection with any bankruptcy proceeding or other reorganization of
another Person;
(vii) Investments in existence or made pursuant to legally binding
written commitments in existence on the Issue Date;
(viii) Currency Agreements, Interest Rate Agreements and related
Hedging Obligations, which obligations are Incurred in compliance with
Section 4.3;
(ix) pledges or deposits (x) with respect to leases or utilities
provided to third parties in the ordinary course of business or (y)
otherwise described in the definition of "Permitted Liens"; and
(x) other Investments in an aggregate amount outstanding at any time
not to exceed the greater of (A) $7.0 million and (B) 7% of Consolidated
Tangible Assets.
"Permitted Liens" means:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or the nonpayment of which in the aggregate would not
reasonably be expected to have a material adverse effect on the Company
and its Restricted Subsidiaries, or that are being contested in good faith
and by appropriate proceedings if adequate reserves with respect thereto
are maintained on the books of the Company or a Subsidiary thereof, as the
case may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations that are not overdue for a
period of more than 60 days, or that are bonded or that are being
contested in good faith and by appropriate proceedings;
(c) pledges, deposits or Liens in connection with workers'
compensation, unemployment insurance and other social security and other
similar legislation or other
14
insurance related obligations (including, without limitation, pledges or
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements);
(d) pledges, deposits or Liens to secure the performance of bids,
tenders, trade, government or other contracts (other than for borrowed
money), obligations for utilities, leases, licenses, statutory
obligations, surety, judgment and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(e) easements (including reciprocal easement agreements),
rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments, changes,
and other similar encumbrances or title defects incurred, or leases or
subleases granted to others, in the ordinary course of business, which do
not in the aggregate materially interfere with the ordinary conduct of the
business of the Company and its Subsidiaries, taken as a whole;
(f) Liens existing on, or provided for under written arrangements
existing on, the Issue Date, or (in the case of any such Liens securing
Indebtedness of the Company or any of its Subsidiaries existing or arising
under written arrangements existing on the Issue Date) securing any
Refinancing Indebtedness in respect of such Indebtedness so long as the
Lien securing such Refinancing Indebtedness is limited to all or part of
the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or under such
written arrangements could secure) the original Indebtedness;
(g) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by any
developer, landlord or other third party on property over which the
Company or any Restricted Subsidiary of the Company has easement rights or
on any leased property and subordination or similar agreements relating
thereto and (ii) any condemnation or eminent domain proceedings affecting
any real property;
(h) Liens securing Hedging Obligations Incurred in compliance with
Section 4.3;
(i) Liens arising out of judgments, decrees, orders or awards in
respect of which the Company shall in good faith be prosecuting an appeal
or proceedings for review, which appeal or proceedings shall not have been
finally terminated, or if the period within which such appeal or
proceedings may be initiated shall not have expired;
(j) leases, subleases, licenses or sublicenses to third parties;
(k) Liens securing (x) Indebtedness Incurred in compliance with
clause (b)(i), (b)(ii), (b)(v) or (b)(vii) of Section 4.3, or clause
(b)(iv) thereof (other than Refinancing Indebtedness Incurred in respect
of Indebtedness described in paragraph (a) thereof) or (y) Senior
Indebtedness and Guarantor Senior Indebtedness;
(l) Liens securing commercial bank indebtedness;
(m) Liens on properties or assets (1) of the Company or any Note
Guarantor securing Senior Indebtedness or Guarantor Senior Indebtedness,
(2) of any Wholly Owned Subsidiary that is not a Note Guarantor securing
Indebtedness of any Wholly Owned
15
Subsidiary that is not a Note Guarantor or (3) of any Restricted
Subsidiary that is not a Note Guarantor securing its Indebtedness;
(n) Liens existing on property or assets of a Person at the time
such Person becomes a Subsidiary of the Company (or at the time the
Company or a Restricted Subsidiary acquires such property or assets);
provided, however, that such Liens are not created in connection with, or
in contemplation of, such other Person becoming such a Subsidiary (or such
acquisition of such property or assets), and that such Liens are limited
to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof)
that secured (or, under the written arrangements under which such Liens
arose, could secure) the obligations to which such Liens relate;
(o) Liens on Capital Stock of an Unrestricted Subsidiary that secure
Indebtedness or other obligations of such Unrestricted Subsidiary;
(p) any encumbrance or restriction (including, but not limited to,
put and call agreements) with respect to Capital Stock of any joint
venture or similar arrangement pursuant to any joint venture or similar
agreement;
(q) Liens securing the Securities; and
(r) Liens securing Refinancing Indebtedness Incurred in respect of
any Indebtedness secured by, or securing any refinancing, refunding,
extension, renewal or replacement (in whole or in part) of any other
obligation secured by, any other Permitted Liens, provided that any such
new Lien is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under
which the original Lien arose, could secure) the obligations to which such
Liens relate.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any corporation means
Capital Stock of any class or classes (however designated) that is preferred as
to the payment of dividends, or as to the distribution of assets upon any
voluntary or involuntary liquidation or dissolution of such corporation, over
shares of Capital Stock of any other class of such corporation.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security that is due or overdue or is to become
due at the relevant time.
"Public Equity Offering" means an underwritten primary public offering of
common stock of the Company pursuant to an effective registration statement
under the Securities Act (whether alone or in conjunction with any secondary
public offering).
"Public Market" means any time after a Public Equity Offering has been
consummated and either (x) at least 10% of the total issued and outstanding
common stock (or equivalent equity interests) of the Company has been
distributed by means of an effective registration statement under the Securities
Act or (y) an established public trading market otherwise exists for any such
common stock or equivalent equity interests.
16
"Redemption Date" means the date on which the Securities are optionally
redeemed pursuant to Section 3.7.
"Refinancing Indebtedness" means Indebtedness that is Incurred to refund,
refinance, replace, renew, repay or extend (including pursuant to any defeasance
or discharge mechanism) (collectively, "refinances," "refinanced" and
"refinancing" as used in the Indenture shall have a correlative meaning) any
Indebtedness existing on the date of the Indenture or Incurred in compliance
with the Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary (to the extent permitted in the
Indenture) and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness; provided, however, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced, and (iii)
such Refinancing Indebtedness is Incurred in an aggregate principal amount (or
if issued with original issue discount, an aggregate issue price) that is equal
to or less than the sum of (x) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced, plus (y) fees, underwriting discounts, premiums
and other costs and expenses incurred in connection with such Refinancing
Indebtedness; provided further, however, that Refinancing Indebtedness shall not
include (x) Indebtedness of a Restricted Subsidiary that is not a Note Guarantor
that refinances Indebtedness of the Company or (y) Indebtedness of the Company
or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary.
"Registered Exchange Offer" shall have the meaning set forth in the
Exchange and Registration Rights Agreement.
"Related Business" means those businesses in which the Company or any of
its Subsidiaries is engaged on the date of the Indenture, or that are reasonably
related, complementary or incidental thereto.
"Representative" means the trustee, agent or representative (if any) for
an issue of Senior Indebtedness.
"Restricted Securities Legend" means the legend set forth in Section
2.6(g) hereof.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Restructuring Transactions" shall have the meaning given such term in the
Amended and Supplemented Consent Solicitation Statement and Exchange Offering
Memorandum of the Company dated October 24, 2001.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired by the Company or a Restricted Subsidiary whereby
the Company or such Restricted Subsidiary transfers such property to a Person
and the Company or such Restricted Subsidiary leases it from such Person, other
than leases (x) between the Company and a Restricted Subsidiary or between or
(y) required to be classified and accounted for as capitalized leases for
financial reporting purposes in accordance with GAAP.
17
"Scheduled Maturity Date" shall mean November 15, 2006.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by a
Lien.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by the Depository), or any successor entity thereto and
shall initially be the Trustee.
"Senior Credit Agreement" means the Credit Agreement dated as of May 6,
1997, as amended from time to time, among the Company, the several banks and
other financial institutions party thereto from time to time (the "Senior
Lenders"), Xxxxxx Xxxxxxx Senior Funding, Inc., as documentation agent for the
Senior Lenders, and The Chase Manhattan Bank, as administrative agent for the
Senior Lenders, as such agreement may be assumed by any successor in interest,
and as such agreement may be amended, supplemented, waived or otherwise modified
from time to time, or refunded, refinanced, restructured, replaced, renewed,
repaid, increased or extended from time to time (whether in whole or in part,
whether with the original agent and lenders or other agents and lenders or
otherwise, and whether provided under the original Senior Credit Agreement or
otherwise).
"Senior Credit Facility" means the collective reference to the Senior
Credit Agreement, any Loan Documents (as defined therein), any notes and letters
of credit issued pursuant thereto and any guarantee and collateral agreement,
patent and trademark security agreement, mortgages, letter of credit
applications and other security agreements, guarantees and collateral documents,
and other instruments and documents, executed and delivered pursuant to or in
connection with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise). Without limiting the generality
of the foregoing, the term "Senior Credit Facility" shall include any agreement
(i) changing the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder or (iv) otherwise
altering the terms and conditions thereof.
"Senior Indebtedness" means the following obligations, whether outstanding
on the date of the Indenture or thereafter issued, without duplication: (i) all
obligations consisting of Bank Indebtedness, the Senior Secured Notes and the
Additional Mezzanine Indebtedness; and (ii) all obligations consisting of the
principal of and premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company regardless of whether post-filing
interest is allowed in such proceeding) on, and fees and other amounts owing in
respect of, all other Indebtedness of the Company, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is expressly provided that the obligations in respect of such Indebtedness are
not senior in right of payment to the Notes; provided, however, that Senior
Indebtedness shall not include (1) any obligation of the Company to any
Subsidiary, (2) any liability for Federal, state, foreign, local or other taxes
owed or owing by the Company, (3) any accounts payable or other liability to
trade creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness
18
(other than the Bank Indebtedness, the Senior Secured Notes and the Additional
Mezzanine Indebtedness) of the Company (or Guarantee by the Company of any
Indebtedness) that is expressly subordinate in right of payment to any other
Indebtedness of the Company (or Guarantee by the Company of any Indebtedness),
or (5) any Capital Stock. If any Designated Senior Indebtedness is disallowed,
avoided or subordinated pursuant to the provisions of Section 548 of Title 11 of
the United States Code or any applicable state fraudulent conveyance law, such
Designated Senior Indebtedness nevertheless will constitute Senior Indebtedness.
"Senior Secured Notes" means: (i) the 18% Adjusted Interest PIK Senior
Secured Notes in the initial principal amount of $20 million issued by the
Company as of April 11, 2001; (ii) the 19.5% Adjusted Interest PIK Senior
Secured Notes in the initial principal amount of $10 million issued by the
Company as of November 21, 2001; (iii) any increase in the amount of the Senior
Secured Notes described in the foregoing clauses (i) and (ii) resulting from any
accrual, compounding or payment-in-kind of interest under such Senior Secured
Notes which is not paid currently in cash, which accretes or which is added to
the principal amount of such Senior Secured Notes; and (iv) any Refinancing
Indebtedness in respect of such Senior Secured Notes and amounts under the
foregoing clause (iii), including without limitation any refunding,
restructuring, replacement, substitution, renewal or modification of such
Indebtedness.
"Senior Subordinated Indebtedness" means the Securities and any other
Indebtedness of the Company that (i) specifically provides that such
Indebtedness is to rank pari passu with the Securities or is otherwise entitled
"Senior Subordinated" Indebtedness and (ii) is not expressly subordinated by its
terms in right of payment to any Indebtedness of the Company that is not Senior
Indebtedness. The Exchange Securities shall constitute Senior Subordinated
Indebtedness.
"Shelf Registration Statement" means any shelf registration statement of
the Company pursuant to the Exchange and Registration Rights Agreement.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC, as in effect on the Issue Date.
"Significant Subsidiary" shall not include Telex Communications International,
Ltd. or any other subsidiary which serves principally as a holding company for
subsidiaries which are organized in a country other than the United States.
"S&P" means Standard & Poor's Ratings Service, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision (but excluding any provision providing for the repurchase of such
security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the date of the Indenture or thereafter Incurred) which is
expressly subordinate in right of payment to the Securities pursuant to a
written agreement.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or
19
other equity interests (including partnership interests) entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such person or (ii) one or more Subsidiaries of
such Person.
"Tax Sharing Agreement" means the Tax Sharing Agreement between the
Company and TCG, as the same may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms thereof and of the
Indenture.
"TCG" means Telex Communications Group, Inc., a Delaware corporation.
"Temporary Cash Investments" means any of the following: (i) any
investment in direct obligations (x) of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or any
agency thereof or (y) of any foreign country recognized by the United States of
America rated at least "A" by S&P or "A-1" by Moody's, (ii) investments in time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company that is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital and surplus aggregating in excess of $250.0 million (or the
foreign currency equivalent thereof) and whose long-term debt is rated "A" by
S&P or "A-1" by Moody's, (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i) or
(ii) above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) Investments in commercial paper, maturing not more than
270 days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United States
of America with a rating at the time as of which any Investment therein is made
of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P,
(v) Investments in securities with maturities of six months or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States of America, or by any political subdivision or
taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's, (vi)
any money market deposit accounts issued or offered by a domestic commercial
bank or a commercial bank organized and located in a country recognized by the
United States of America, in each case, having capital and surplus in excess of
$250.0 million (or the foreign currency equivalent thereof), or investments in
money market funds complying with the risk limiting conditions of Rule 2a-7 or
any short-term successor rule) of the SEC, under the Investment Company Act of
1940, as amended, and (vii) similar short-term investments approved by the Board
of Directors in the ordinary course of business.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Indenture.
"Trade Payables" means, with respect to any Person, any accounts payable
or any indebtedness or monetary obligation to trade creditors created, assumed
or Guaranteed by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.6(g) hereof.
"Treasury Rate" means the yield to maturity at the time of computation of
United States Treasury securities with a constant maturity (as compiled and
published in the most recent
20
Federal Reserve Statistical Release H.15(519) which has become publicly
available at least two Business Days prior to the Redemption Date (or, if such
Statistical Release is no longer published, any publicly available source or
similar market data)) most nearly equal to the period from the Redemption Date
to the Stated Maturity; provided, however, that if the period from the
Redemption Date to the Stated Maturity is not equal to the constant maturity of
a United States Treasury security for which a weekly average yield is given, the
Treasury Rate shall be obtained by linear interpolation (calculated to the
nearest one-twelfth of a year) from the weekly average yields of United States
Treasury securities for which such yields are given, except that if the period
from the Redemption Date to the Stated Maturity is less than one year, the
weekly average yield on actually traded United States Treasury securities
adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in the Indenture until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" means, when used with respect to the Trustee, any officer
within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or 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.
"Uniform Commercial Code" means the Uniform Commercial Code as in effect
from time to time in any relevant jurisdiction.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness 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, however,
that either (A) the Subsidiary to be so designated has total consolidated assets
of $1,000 or less or (B) if such Subsidiary has consolidated assets greater than
$1,000, then such designation would be permitted under Section 4.4. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (x) the Company could incur at least $1.00 of additional
Indebtedness under Section 4.3(a) and (y) no Default shall have occurred and be
continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of the
Company's Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
21
"Voting Stock" of an entity means all classes of Capital Stock of such
entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company all
the Capital Stock of which (other than directors' qualifying shares, or (in the
case of any Foreign Subsidiary) to the extent required by applicable law) is
owned by the Company or another Wholly Owned Subsidiary.
Section 1.2. Other Definitions.
DEFINED
TERM IN SECTION
---- ----------
"Affiliate Transaction" 4.7
"Bankruptcy Law" 6.1
"Blockage Notice" 10.3
"covenant defeasance option" 8.1(b)
"Custodian" 6.1
"Event of Default" 6.1
"Excess Proceeds" 4.6(a)
"Fairness Opinion" 4.7
"Foreign Subsidiary Amount" 4.3(b)(ii)
"Initial Agreement" 4.5
"Initial Lien" 4.10
"legal defeasance option" 8.1(b)
"Legal Holiday" 11.8
"Notice of Default: 6.1
"Offer" 4.6
"Offer Period" 4.6
"pay the Securities" 10.3
"Paying Agent" 2.3
"Payment Blockage Period" 10.3
"Refinancing Agreement" 4.5
"Register" 2.3
"Restricted Payment" 4.4
"Securities Act" 2.1
"Successor Company" 5.1
Section 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this indenture. The following
TIA terms have the following meanings:
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
22
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
Section 1.4. Rules of Construction. (a) Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) as used herein, accounting terms relating to the Company and its
Subsidiaries not defined in Section 1.1, and accounting terms partly
defined in Section 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP. All computations determining
compliance with financial covenants or terms, including definitions used
therein, shall be prepared in accordance with generally accepted
accounting principles in effect at the Issue Date, as and to the extent
provided in the definition of the term "GAAP". If at any time the
computations for determining compliance with such financial covenants or
provisions relating thereto utilize generally accepted accounting
principles different than those in effect at the Issue Date, the financial
statements within which such computations are delivered shall be
accompanied by a reconciliation statement with respect to such
computations;
(3) the phrases "prior payment in full", "payment in full", "paid in
full" and any other similar terms or phrases when used herein with respect
to any Senior Indebtedness shall mean to the collective reference to (i)
the indefeasible payment in full, in immediately available funds of all
such Senior Indebtedness, (ii) the termination of any commitments relating
to such Senior Indebtedness and (iii) the cash collateralization of any
obligations (contingent or otherwise) relating to letters of credit issued
pursuant to the terms of such Senior Indebtedness but undrawn and
unexpired;
(4) "or" is not exclusive;
(5) "including" means including without limitation; and
(6) words in the singular include the plural and words in the plural
include the singular.
(b) Unsecured Indebtedness is not deemed to be subordinate or junior to
Secured Indebtedness merely because it is unsecured, and Indebtedness that is
not guaranteed by a particular Person is not deemed to be subordinate or junior
to Indebtedness that is so guaranteed merely because it is not so guaranteed.
23
ARTICLE 2
The Securities
Section 2.1. Form and Dating. The Initial Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A,
which is hereby incorporated in and expressly made a part of this Indenture. Any
Exchange Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit B, which is incorporated in and expressly
made a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The terms of the Securities set forth in
Exhibit A and B are part of the terms of this Indenture.
(a) Global Securities. The Initial Securities are being issued by the
Company for delivery to the Initial Holders or for their account pursuant to the
Exchange Offer. Additional Initial Securities may be delivered from time to time
by the Company to holders of Old Senior Subordinated Notes who subsequently
exchange their Old Senior Subordinated Notes with the consent of the Company.
Initial Securities shall be issued initially in definitive, fully
registered form without interest coupons with the legend called for by footnote
1 to Exhibit A hereto (the "Restricted Definitive Securities"), duly executed by
the Company and authenticated by the Trustee as hereinafter provided. The
Restricted Definitive Securities shall be registered in the names of the Initial
Holders based on participation information satisfactory to the Company which is
provided by such Initial Holders. The Company will appoint The Depository Trust
Company to act as Depository with respect to the Global Securities upon the
closing of the Registered Exchange Offering respect to the Initial Securities,
or the transfer of Global Securities pursuant to a Shelf Registration Statement
with respect to the Initial Securities, and Global Securities which are issued
pursuant to the Registered Exchange Offering or reissued upon a transfer
pursuant to a Shelf Registration Statement shall be registered in the name of
Cede & Co., as nominee of such Depository, and shall be deposited on behalf of
the Initial Holders of the Initial Securities represented thereby with the
Trustee, as Securities Custodian for the Depository. The aggregate principal
amount of the Restricted Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as Securities
Custodian, and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to Global
Securities deposited with or on behalf of the Depository after the closing of
the Registered Exchange Offer.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially one or more Global Securities
that (i) shall be registered in the name of the Depository for such Global
Security or Global Securities or the nominee of such Depository and (ii) shall
be held by the Trustee as custodian for the Depository. After the issuance of
Exchange Securities under a Registered Exchange Offer, the Trustee shall have no
duty to hold any Global Security as custodian for the Depository or any other
Security registered in the name of the Depository or a nominee of the
Depository.
24
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as otherwise provided herein, owners
of beneficial interests in Global Securities will not be entitled to receive
physical delivery of certificated Securities. If certificated Initial Securities
are issued, such certificated Initial Securities shall bear the Restricted
Securities Legend ("Restricted Certificated Securities"); provided, however,
that upon any permitted transfer of such Restricted Certificated Securities to a
Person who desires to hold the Securities pursuant to an interest in a Global
Security, such Restricted Certificated Securities will, unless the relevant
Global Security has previously been exchanged, be exchanged for an interest in a
Global Security pursuant to the provisions of Section 2.6 hereof. Certificated
Securities will include the Restricted Securities Legend unless removed in
accordance with this Section 2.1(c) or Section 2.6(g) hereof.
After a transfer of any Initial Securities during the period of the
effectiveness of, and pursuant to, a Shelf Registration Statement with respect
to the Initial Securities, all requirements pertaining to legends on such
Initial Securities will cease to apply, the requirements requiring that any such
Initial Securities issued to certain Holders be issued in global form will cease
to apply, and certificated Initial Securities without legends will be made
available to the Holders of such Initial Securities. Upon the consummation of a
Registered Exchange Offer with respect to the Initial Securities pursuant to
which Holders of Initial Securities are offered Exchange Securities in exchange
for their Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in global
form will cease to apply and certificated Initial Securities with the Restricted
Securities Legend will be available to Holders of such Initial Securities that
do not exchange their Initial Securities, and Exchange Securities in
certificated form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer.
Section 2.2. Execution and Authentication. One Officer shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be impressed, affixed, imprinted or reproduced on the Securities and may
be in facsimile form.
If an Officer whose signature is on a Security no longer holds that office
at the time the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Security. The signature
shall be conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate and make available for delivery (1) Initial
Securities for original issue in an aggregate deemed original issue price of
$56,250,000 million and which will represent an aggregate principal amount as of
the Scheduled Maturity Date of the Securities of approximately $105,374,169, and
(2) Exchange Securities for issue only in a Registered
25
Exchange Offer, pursuant to the Exchange and Registration Rights Agreement, for
Initial Securities for a like deemed issue price and principal amount of Initial
Securities exchanged pursuant thereto, in each case upon a written order of the
Company signed by one Officer. Such order shall specify the amount of the
Securities to be authenticated, the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities or Exchange Securities. The aggregate deemed original issue price and
aggregate principal amount as of the Scheduled Maturity Date of the Securities
outstanding at any time may not exceed $56,250,000 and approximately
$105,374,169, respectively, except as provided in Section 2.7.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate the Securities. Any such appointment shall be evidenced by an
instrument in writing signed by a Trust Officer, a copy of which instrument
shall be promptly furnished to the Company. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
Section 2.3. Registrar and Paying Agent. The Company shall maintain an
office or agency where Securities may be presented for registration of transfer
or for exchange (the "Registrar") and an office or agency where Securities may
be presented for payment (the "Paying Agent"). The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Register").
The ownership of Securities shall be proved by such Register. The Company may
have one or more co registrars and one or more additional paying agents. The
term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its Wholly Owned Subsidiaries that is a Domestic Subsidiary
may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying Agent
in connection with the Securities.
The Company will appoint The Depository Trust Company to act as Depository
with respect to the Global Securities upon the closing of the Registered
Exchange Offering respect to the Initial Securities, or the transfer of the
Global Securities pursuant to a Shelf Registration Statement with respect to the
Initial Securities.
Section 2.4. Paying Agent To Hold Money in Trust. On or prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust (but
subject to all applicable subordination provisions) for the benefit of
Securityholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such
26
payment. If the Company or a Subsidiary acts as Paying Agent, it shall, on or
immediately prior to each due date of the principal and interest on any
Security, segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.
Any money deposited with the Trustee or any Paying Agent in trust for the
payment of principal and interest on any Security and remaining unclaimed for
two years after such principal and interest has become due and payable shall be
paid to the Company at its request; and the Holder of such Security shall
thereafter look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money shall
thereupon cease.
Section 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of principal or interest on any Security
and remaining unclaimed for two years after such principal and interest has
become due and payable shall be paid to the Company at its request, or, if then
held by the Company, shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
Section 2.6. Transfer and Exchange. (a) Transfer and Exchange of
Definitive Securities and Global Securities Generally. When Definitive
Securities or Global Securities or beneficial interests therein are presented to
the Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive Securities or Global
Securities or beneficial interests therein; or
(y) to exchange such Definitive Securities or Global Securities or
beneficial interests therein for an equal principal amount of Definitive
Securities or Global Securities or beneficial interests therein of other
authorized denominations,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities or Global Securities or
beneficial interests therein surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form and substance reasonably satisfactory to the Company and
the Registrar or co-registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
27
(ii) in the case of Transfer Restricted Securities that are
Definitive Securities or Global Securities or beneficial interests
therein, are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A),
(B) or (C) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Securities are being delivered
to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in substantially the form set forth on the reverse of the
Security); or
(B) if such Transfer Restricted Securities are being
transferred to the Company, a certification to that effect (in
substantially the form set forth on the reverse of the Security); or
(C) if such Transfer Restricted Securities are being
transferred (w) pursuant to an exemption from registration in
accordance with Rule 144 or Regulation S under the Securities Act;
or (x) to an institutional "accredited investor" within the meaning
of Rules 501(a)(1), (2), (3) or (7) under the Securities Act that is
acquiring the security for its own account, or for the account of
such an institutional accredited investor, with respect to which it
exercises sole discretion, in each case in a minimum principal
amount of the Securities of $250,000 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; or (y) in reliance
on another exemption from the registration requirements of the
Securities Act: (i) a certification to that effect (in substantially
the form set forth on the reverse of the Security), (ii) if the
Company or Registrar so requests, an Opinion of Counsel reasonably
acceptable to the Company and to the Registrar to the effect that
such transfer is in compliance with the Securities Act, and (iii) in
the case of clause (x), a signed letter substantially in the form of
Exhibit C hereto.
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below and in Section 2.6(a). Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by appropriate
instruments of transfer, in form and substance satisfactory to the Trustee and
the Company, together with written instructions directing the Trustee to make,
or to direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global Security,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officer's Certificate, a new Global Security in
the appropriate principal amount.
(d) Transfer and Exchange of Global Securities. The transfer and exchange
of Global Securities or beneficial interests therein shall be effected through
the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor.
28
(e) Transfer of a Beneficial Interest in a Global Security for a
Definitive Security.
(i) Any person having a beneficial interest in a Global Security
that is being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A)
or (B) below may upon request, and if accompanied by the information
specified below, exchange such beneficial interest for a Definitive
Security of the same aggregate principal amount. Upon receipt by the
Trustee of written instructions or such other form of instructions as is
customary for the Depository from the Depository or its nominee on behalf
of any Person having a beneficial interest in a Global Security and upon
receipt by the Trustee of a written order or such other form of
instructions as is customary for the Depository or the Person designated
by the Depository as having such a beneficial interest in a Transfer
Restricted Security only, the following additional information and
documents:
(A) if such beneficial interest is being transferred to the Person
designated by the Depository as being the owner of a beneficial interest
in a Global Security, a certification from such Person to that effect (in
substantially the form set forth on the reverse of the Security); or
(B) if such beneficial interest is being transferred (w) pursuant to
an exemption from registration in accordance with Rule 144 or Regulation S
under the Securities Act; or (x) to an institutional "accredited investor"
within the meaning of Rules 501(a)(1), (2), (3) and (7) under the
Securities Act that is acquiring the security for its own account, or for
the account of such an institutional accredited investor, with respect to
which it exercises sole discretion, in each case in a minimum principal
amount of the Securities of $250,000 for investment purposes and not with
a view to, or for offer or sale in connection with, any distribution in
violation of the Securities; or (y) in reliance on another exemption from
the registration requirements of the Securities Act: (i) a certification
to that effect from the transferee or transferor (in substantially the
form set forth on the reverse of the Security), (ii) if the Company or
Registrar so requests, an Opinion of Counsel from the transferee or
transferor reasonably acceptable to the Company and to the Registrar to
the effect that such transfer is in compliance with the Securities Act,
and (iii) in the case of clause (x), a signed letter substantially in the
form of Exhibit C hereto,
then the Trustee or the Securities Custodian, at the direction of the Trustee,
will cause, in accordance with the standing instructions and procedures existing
between the Depository and the Securities Custodian, the aggregate principal
amount of the Global Security to be reduced on its books and records and,
following such reduction, the Company will execute and the Trustee will
authenticate and make available for delivery to the transferee a Definitive
Security.
(ii) Definitive Securities issued in exchange for a beneficial
interest in a Global Security pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
make such Definitive Securities available for delivery to the persons in
whose names such Securities are so registered in accordance with the
instructions of the Depository.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in Subsection (f) of this
29
Section 2.6), a Global Security may not be transferred as a whole except by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository.
(f) Authentication of Definitive Securities in Absence of
Depository. If at any time:
(i) the Depository for the Securities notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global
Securities and a successor Depository for the Global Securities is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of Definitive Securities
under this Indenture,
then the Company will execute, and the Trustee, upon receipt of an Officer's
Certificate requesting the authentication and delivery of Definitive Securities
to the Persons designated by the Company, will authenticate and make available
for delivery Definitive Securities, in an aggregate principal amount equal to
the principal amount of Global Securities, in exchange for such Global
Securities.
(g) Legend.
(i) Except as permitted by the following paragraph (ii), each Security
certificate evidencing the Global Securities and the Definitive Securities (and
all Securities issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES, ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, 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 SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
PURSUANT TO OFFERS AND SALES 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 RULES 501(A)(1),
(2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY
FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE
SECURITIES OF $250,000 FOR INVESTMENT PURPOSES AND NOT WITH A
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VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (E) 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 (D) OR (E) TO REQUIRE THE DELIVERY OF
AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY
TO EACH OF THEM, AND IN THE CASE OF ANY OF THE FOREGOING CLAUSES (A)-(E),
A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND
THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER
AFTER THE RESALE RESTRICTION TERMINATION DATE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Security, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legend set forth above and rescind
any restriction on the transfer of such Transfer Restricted
Security; and
(B) any such Transfer Restricted Security represented by a Global
Security shall not be subject to the provisions set forth in clause
(i) of this Section 2.6(g) (such sales or transfers being subject
only to the provisions of Section 2.6(c) hereof); provided, however,
that with respect to any request for an exchange of a Transfer
Restricted Security that is represented by a Global Security for a
Definitive Security that does not bear a legend, which request is
made in reliance upon Rule 144, the Holder thereof shall certify in
writing to the Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the form set
forth on the reverse of the Security).
(h) Cancellation and/or Adjustment of Global Security. At such time
as all beneficial interests in a Global Security have either been exchanged for
Definitive Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for Definitive Securities, redeemed,
repurchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) or the Securities Custodian with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(i) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
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(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith.
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any Definitive Security
selected for redemption in whole or in part pursuant to Article 3, except
the unredeemed portion of any Definitive Security being redeemed in part,
or (b) any Security for a period beginning 15 Business Days before the
mailing of a notice of an offer to repurchase or redeem Securities or 15
Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, each of the Company, the Trustee, the Paying Agent, the
Registrar and any co-registrar may deem and treat the person in whose name
a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Security
and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Company, the Trustee, the Paying Agent, the
Registrar and any co-registrar shall be affected by notice to the
contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(j) No Obligation of the Trustee. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to the
Holders and all payments to be made to Holders under the Securities shall be
given or made only to or upon the order of the registered Holders (which shall
be the Depository or its nominee in the case of a Global Security). The rights
of beneficial owners in any Global Security in global form shall be exercised
only through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may conclusively rely and shall be fully protected
in relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including, without limitation, any transfers between
or among Depository participants, members or beneficial owners in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Indenture, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
Section 2.7. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Article 8 of the Uniform Commercial Code and any other
32
applicable law are met, and if the Holder (i) satisfies the Company and the
Trustee, within a reasonable time after such Holder has notice thereof, with
respect to such loss, destruction or wrongful taking and the Registrar does not
register a transfer prior to receiving such notification, (ii) so requests the
Company or the Trustee prior to the Security being acquired by a bona fide
purchaser and (iii) satisfies any other reasonable requirements of the Company
and the Trustee. Such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss that any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security (including amounts necessary
to pay taxes or other governmental charges associated with such replacement).
Every replacement Security is an additional obligation of the Company.
The provisions of this Section 2.7 shall (to the extent lawful) be
exclusive and preclude all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 2.8. Outstanding Securities. Securities outstanding at any time
are all Securities authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation and those described in this Section as
not outstanding. A Security does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.7, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Securities (or
portions thereof) to be redeemed or maturing, as the case may be, and the Paying
Agent is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture, then on and after that date such
Securities (or portions thereof) cease to be outstanding and interest on them
ceases to accrue.
Section 2.9. Temporary Securities. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and make
them available for delivery in exchange for temporary Securities.
Section 2.10. Cancellation. The Company at any time may deliver Securities
to the Trustee for cancellation. The Registrar and the Paying Agent shall
forward to the Trustee any Securities surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel and
deliver canceled Securities to the Company. The Company may not issue new
Securities to replace Securities it has delivered to the Trustee for
cancellation. The Trustee shall not authenticate Securities in place of canceled
Securities other than pursuant to the terms of this Indenture.
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Section 2.11. Interest after the Scheduled Maturity Date. If the Company
defaults in the payment of the principal under the Securities on the Scheduled
Maturity Date, interest shall be payable thereafter at the rate and as provided
in the Securities and, if not paid on any interest payment date, shall be added
to the principal amount of the Securities until paid.
Section 2.12. CUSIP Numbers. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
Redemption
Section 3.1. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the Accreted Value and principal
amount of Securities to be redeemed and the paragraph of the Securities pursuant
to which the redemption will occur.
The Company shall give each notice to the Trustee provided for in this
Section at least 45 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officer's
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. If fewer than all the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall be not less than 15 days after the
date of notice to the Trustee. Any such notice may be canceled at any time prior
to notice of such redemption being mailed to any Holder and shall thereby be
void and of no effect.
Section 3.2. Selection of Securities To Be Redeemed. If fewer than all the
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed on a pro rata basis, by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee considers, in its sole discretion, fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be
in amounts of $1,000 or a whole multiple of $1,000 unless otherwise directed by
the Company. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly in writing of the Securities or
portions of Securities to be redeemed.
Section 3.3. Notice of Redemption. At least 30 days but not more than 60
days before a date for redemption of Securities, the Company shall mail a notice
of redemption by first-class mail to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
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(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the
redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers and principal amounts
of the particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or he Paying Agent is prohibited from
making such payment pursuant to the terms of this
Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the
redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities
being redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such
notice or printed on the Securities.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by this Section.
Section 3.4. Effect of Notice of Redemption. Once notice of redemption is
mailed, Securities called for redemption become due and payable on the
redemption date and at the redemption price stated in the notice. Upon surrender
to the Paying Agent, such Securities shall be paid at the redemption price
stated in the notice, plus accrued interest, if any, to the redemption date;
provided that if the redemption date is after a regular record date and on or
prior to the interest payment date, the accrued interest shall be payable to the
Securityholder of the redeemed Securities registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
Section 3.5. Deposit of Redemption Price. On or prior to 10:00 a.m. on the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation, and from and after such date (unless the Company
defaults in making such redemption payment) interest on such Securities shall
cease to accrue.
Section 3.6. Securities Redeemed in Part. Upon surrender of a Security
that is redeemed in part, the Company shall execute and the Trustee shall
authenticate for the Holder
35
(at the Company's expense) a new Security equal in principal amount to the
unredeemed portion of the Security surrendered.
Section 3.7. Optional Redemption. (a) Except as set forth in this Section
3.7, the Securities may not be redeemed pursuant to this Section 3.7(a) at the
option of the Company prior to September 15, 2003. On and after that date, the
Company may redeem the Securities in whole at any time or in part from time to
time at the following redemption prices expressed in percentages of Accreted
Value as of the redemption date, plus accrued interest, if any, to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date) if
redeemed during the 12-month period beginning on or after September 15 of the
years set forth below:
Period Redemption Price
2003................................ 106.5000%
2004................................ 104.3333%
2005................................ 102.1667%
2006 and thereafter................. 100.000%
(b) Notwithstanding the foregoing, at any time and from time to time prior
to September 15, 2003, the Company may redeem Securities which represent in the
aggregate up to 33 1/3% of the original aggregate principal amount of the
Securities payable as of the Scheduled Maturity Date with the proceeds of one or
more Public Equity Offerings by the Company following which there is a Public
Market, at a redemption price equal to 113% of Accreted Value as of the
redemption date; provided, however, that Securities representing at least 66
2/3% of the original aggregate principal amount payable as of the Scheduled
Maturity Date of the Securities must remain outstanding after each such
redemption.
(c) At any time on or prior to September 15, 2006, the Securities may be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days' prior notice (but in no
event more than 180 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the Accreted Value thereof plus the Applicable Premium as of
the Redemption Date.
ARTICLE 4
Covenants
Section 4.1. Payment of Securities. The Company shall promptly pay the
principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due, and the Trustee or the Paying Agent, as the
case may be, is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate specified
therefor in the Securities, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
36
Section 4.2. SEC Reports. Notwithstanding that the Company may not be
required to be or remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Company will file (if then permitted to do so)
with the SEC and provide (whether or not so filed with the SEC) the Trustee and
Securityholders and prospective Securityholders (upon request) with the annual
reports and the information, documents and other reports, which are specified in
Sections 13 and 15(d) of the Exchange Act. The Company also will comply with the
other provisions of TIA Section 314(a).
Section 4.3. Limitation on Indebtedness. (a) The Company will not, and
will not permit any Restricted Subsidiary to, Incur any Indebtedness; provided,
however, that the Company and the Note Guarantors may Incur Indebtedness if on
the date of the Incurrence of such Indebtedness the Consolidated Coverage Ratio
would be greater than (i) 2.00:1.00, if such Indebtedness is Incurred on or
prior to the second anniversary of the Issue Date, and (ii) 2.25:1.00 if such
Indebtedness is Incurred thereafter.
(b) Notwithstanding Section 4.3(a), the Company and its Restricted
Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred pursuant to the Senior Credit Facility in
a maximum principal amount not to exceed at any time an aggregate
principal amount of $120 million (including letters of credit outstanding
under the Senior Credit Facility);
(ii) Indebtedness of Foreign Subsidiaries for working capital
purposes and any Guarantees in respect thereof, the aggregate principal
amount of which Indebtedness outstanding at any time does not exceed, as
to all such Foreign Subsidiaries, the greater of (the "Foreign Subsidiary
Amount") (A) $10.0 million and (B) an amount equal to 10% of Consolidated
Tangible Assets; provided, however, that the principal amount of such
Indebtedness may exceed the Foreign Subsidiary Amount by an amount not to
exceed the amount of Indebtedness permitted to be Incurred by clause
4.3(b)(i)(B) as of such date but the principal amount of Indebtedness
permitted to be Incurred by clause 4.3(b)(i)(B) above shall be reduced by
the amount by which such Indebtedness exceeds the Foreign Subsidiary
Amount;
(iii) Indebtedness (A) of the Company to any Restricted Subsidiary
and (B) of any Wholly Owned Subsidiary to the Company or any Restricted
Subsidiary; provided, however, that any subsequent issuance or transfer of
any Capital Stock or any other event that results in any such Wholly Owned
Subsidiary ceasing to be a Wholly Owned Subsidiary or any other subsequent
transfer of any such Indebtedness (except to the Company or a Wholly Owned
Subsidiary) will be deemed, in each case, an Incurrence of Indebtedness by
the Company or such Restricted Subsidiary, as the case may be;
(iv) Indebtedness represented by the Securities, any Indebtedness
(other than the Indebtedness described in clause 4.3(b)(i), (ii) or (iii)
above) outstanding on the date of the Indenture (including without
limitation the Old Senior Subordinated Notes), and any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this
clause 4.3(b)(iv) or Section 4.3(a) above;
(v) Indebtedness of the Company or any Restricted Subsidiary to
finance or refinance the deferred purchase price of newly acquired
property of the Company and its Subsidiaries used in the ordinary course
of business of the Company and its Subsidiaries
37
(provided such purchase money financing is entered into within six months
of the acquisition of such property), and any Refinancing Indebtedness
with respect thereto, in an amount (based on the remaining balance of the
obligations therefor on the books of the Company and its Restricted
Subsidiaries) which shall not exceed the greater of (A) $7.0 million and
(B) an amount equal to 7% of Consolidated Tangible Assets in the aggregate
at any one time outstanding;
(vi) [omitted];
(vii) Indebtedness of the Company or any Restricted Subsidiary in
the form of Capitalized Lease Obligations or Attributable Debt, and any
Refinancing Indebtedness with respect thereto, in an aggregate amount not
in excess of the greater of (A) $7.0 million and (B) an amount equal to 7%
of Consolidated Tangible Assets at any one time outstanding; provided,
however, that all Indebtedness Incurred by one or more Restricted
Subsidiaries that are not Note Guarantors pursuant to clause 4.3(b)(v) or
(vi) above or this clause 4.3(b)(vii) shall not exceed the greater of (A)
$7.0 million and (B) an amount equal to 7% of Consolidated Tangible Assets
in aggregate principal amount at any one time outstanding;
(viii) Indebtedness represented by the Note Guarantees and
Guarantees of Indebtedness Incurred pursuant to clause 4.3(b)(i) or (iii)
above;
(ix) Guarantees (A) by any Note Guarantor of Senior Indebtedness,
(B) by the Company or any Note Guarantor of Guarantor Senior Indebtedness
or (C) by any Wholly Owned Subsidiary that is not a Note Guarantor of
Indebtedness of any Wholly Owned Subsidiary that is not a Note Guarantor;
(x) Indebtedness (A) arising by reason of any Lien created or
permitted to exist by Section 4.10, including any Indebtedness of any Note
Guarantor arising by reason of any Lien granted by such Person to secure
Senior Indebtedness, or of the Company or any Note Guarantor arising by
reason of any Lien granted by such Person to secure Guarantor Senior
Indebtedness, or (B) of any Restricted Subsidiary that is not a Note
Guarantor arising by reason of any Lien granted by such Person to secure
Indebtedness of any Restricted Subsidiary that is not a Note Guarantor;
(xi) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring of a check, draft or similar instrument of such
Person drawn against insufficient funds, provided that such Indebtedness
is extinguished within five Business Days of its incurrence;
(xii) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities, or obligations in respect of
purchase price adjustments, in connection with the acquisition or
disposition of assets;
(xiii) Indebtedness in respect of (A) commercial letters of credit,
or other letters of credit or other similar instruments or obligations,
issued in connection with liabilities incurred in the ordinary course of
business (including those issued to governmental entities in connection
with self-insurance under applicable workers' compensation statutes), or
(B) surety, judgment, appeal, performance and other similar bonds,
instruments or obligations provided in the ordinary course of business;
38
(xiv) Indebtedness under Hedging Obligations; provided, however,
that such Hedging Obligations are entered into for bona fide hedging
purposes of the Company or any Restricted Subsidiary and are in the
ordinary course of business;
(xv) Indebtedness (A) of the Company consisting of Guarantees of up
to an aggregate principal amount of $4.0 million of borrowings by
Management Investors in connection with the purchase of Capital Stock of
the Company by such Management Investors or (B) of the Company or any
Restricted Subsidiary consisting of guarantees in respect of loans or
advances made to officers or employees of the Company or any Restricted
Subsidiary, or guarantees otherwise made on their behalf, (1) in respect
of travel, entertainment and moving-related expenses incurred in the
ordinary course of business, or (2) in the ordinary course of business not
exceeding $500,000 in the aggregate outstanding at any time;
(xvi) Indebtedness of any Restricted Subsidiary that is Indebtedness
of another Person assumed by such Restricted Subsidiary in connection with
its acquisition of assets from such Person (other than Indebtedness
Incurred in connection with, or in contemplation of, such acquisition) and
any Refinancing Indebtedness with respect thereto; provided, however, that
at the time of such acquisition of assets the Company shall have been able
to Incur at least an additional $1.00 of Indebtedness under Section 4.3(a)
above after giving effect to such acquisition;
(xvii) Indebtedness of a Restricted Subsidiary issued and
outstanding on or prior to the date on which such Restricted Subsidiary
was acquired by the Company (other than Indebtedness Incurred (A) as
consideration in, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Restricted Subsidiary or was acquired by the Company or (B) otherwise in
connection with, or in contemplation of, such acquisition) and any
Refinancing Indebtedness with respect thereto; provided, however, that on
the date of any such acquisition the Company shall have been able to Incur
at least $1.00 of Indebtedness under Section 4.3(a) above after giving
effect to such acquisition; and
(xviii) Indebtedness constituting Senior Secured Notes and
Additional Mezzanine Indebtedness of the Company in an aggregate principal
amount outstanding from time to time not to exceed $40 million, plus any
increase in the amount of such Indebtedness resulting from any accrual,
compounding or payment-in-kind of interest under such Indebtedness which
is not paid currently in cash or which is added to the principal amount of
such Indebtedness, including without limitation any refunding,
restructuring, replacement, substitution, renewal or modification of such
Indebtedness; and such Indebtedness shall be on such terms as the Company
shall agree from time to time and may be secured or unsecured and may be
Senior Indebtedness and Designated Senior Indebtedness.
(c) Notwithstanding the foregoing, the Company will not Incur any
Indebtedness pursuant to any provision of Section 4.3(b) above that permits
Refinancing Indebtedness in respect of Indebtedness constituting Subordinated
Obligations, if the proceeds of such Refinancing Indebtedness are used, directly
or indirectly, to refinance such Subordinated Obligations, unless such
Refinancing Indebtedness will be subordinated to the Securities to at least the
same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this
39
covenant, (i) any other obligation of the obligor on such Indebtedness arising
under any Guarantee, Lien or letter of credit supporting such Indebtedness shall
be disregarded to the extent that such Guarantee, Lien or letter of credit
secures the principal amount of such Indebtedness; (ii) in the event that
Indebtedness meets the criteria of more than one of the types of Indebtedness
described in any clause of Section 4.3(b) above, the Company, in its sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses; and
(iii) the amount of Indebtedness issued at a price that is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
(e) For purposes of determining compliance with any Dollar-denominated
restriction on the Incurrence of Indebtedness denominated in a foreign currency,
the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant
thereto shall be calculated based on the relevant currency exchange rate in
effect on the date that such Indebtedness was Incurred, in the case of term
debt, or first committed, in the case of revolving credit debt, provided that
(x) the Dollar-equivalent principal amount of any such Indebtedness outstanding
on the Issue Date shall be calculated based on the relevant currency exchange
rate in effect on the Issue Date and (y) if such Indebtedness is Incurred to
refinance other Indebtedness denominated in a foreign currency, and such
refinancing would cause the applicable Dollar-denominated restriction to be
exceeded if calculated at the relevant currency exchange rate in effect on the
date of such refinancing, such Dollar-denominated restriction shall be deemed
not to have been exceeded so long as the principal amount of such refinancing
Indebtedness does not exceed the principal amount of such Indebtedness being
refinanced. The principal amount of any Indebtedness Incurred to refinance other
Indebtedness, if Incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such respective Indebtedness is denominated that is
in effect on the date of such refinancing.
Section 4.4. Limitation on Restricted Payments. (a) The Company shall not,
and shall not permit any Restricted Subsidiary, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving the Company) except (x) dividends or distributions
payable solely in its Capital Stock (other than Disqualified Stock) and (y)
dividends or distributions payable to the Company or any Restricted Subsidiary
(and, if the Restricted Subsidiary making such dividend or distribution is not a
Wholly Owned Subsidiary, to its other shareholders on no more than a pro rata
basis, measured by value), (ii) purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company held by Persons other than the
Company or another Restricted Subsidiary, (iii) purchase, repurchase, redeem,
defease or otherwise acquire or retire for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment, any Subordinated
Obligations (other than the purchase, repurchase, redemption or other
acquisition of Subordinated Obligations in anticipation of satisfying a sinking
fund obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition) or (iv) make any Investment (other
than a Permitted Investment) in any Person (any such dividend, distribution,
purchase, redemption, repurchase, defeasance, other acquisition, retirement or
Investment being herein referred to as a "Restricted Payment") if at the time
the Company or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
40
(2) the Company could not incur at least an additional $1.00 of
Indebtedness under Section 4.3(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
determined in good faith by the Company's Board of Directors whose determination
shall be conclusive and evidenced by a resolution of the Company's Board of
Directors) declared or made subsequent to the date of the Indenture would exceed
the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the end of the most recent fiscal
quarter ending prior to the Issue Date to the end of the most recent
fiscal quarter ending prior to the date of such Restricted Payment for
which consolidated financial statements of the Company are available (or,
in case such Consolidated Net Income shall be a deficit, minus 100% of
such deficit);
(B) the aggregate Net Cash Proceeds received by the Company either
(x) as capital contributions to the Company after the Issue Date or (y)
from the issuance or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to a
Restricted Subsidiary of the Company), provided that in the event such
issuance or sale is to an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries for the benefit of
their employees, to the extent the purchase by such plan or trust is
financed by Indebtedness of such plan or trust for which the Company is
liable as Guarantor or otherwise, such aggregate amount of Net Cash
Proceeds shall be limited to the aggregate amount of principal payments
made by such plan or trust with respect to such Indebtedness;
(C) the amount by which Indebtedness of the Company is reduced on
the Company's balance sheet upon the conversion or exchange (other than by
a Restricted Subsidiary of the Company) subsequent to the Issue Date, of
any Indebtedness of the Company or its Restricted Subsidiaries convertible
or exchangeable for Capital Stock (other than Disqualified Stock) of the
Company (less the amount of any cash, or other property (other than
Capital Stock), distributed by the Company upon such conversion or
exchange), plus the amount of any cash or other property received by the
Company or any Restricted Subsidiary upon such conversion or exchange;
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) repayments of the principal
of loans or advances or other transfers of assets to the Company or any
Restricted Subsidiary from any Unrestricted Subsidiary or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries
(valued in each case as provided in the definition of "Investment"), not
to exceed in the case of any such Unrestricted Subsidiary the aggregate
amount of Investments (other than Permitted Investments) made by the
Company or any Restricted Subsidiary in such Unrestricted Subsidiary after
the Issue Date; and
(E) in the case of disposition or repayment of any Investment
constituting a Restricted Payment (without duplication of any amount
deducted in calculating the amount of Investments at any time outstanding
included in the amount of Restricted Payments), an amount equal to the
lesser of the return of capital or repayment with respect to such
Investment and the initial amount of such Investment, in either case, less
the cost of the disposition of such Investment.
41
(b) The provisions of Section 4.4(a) will not prohibit:
(i) any purchase, redemption, repurchase, defeasance, retirement or
other acquisition of Capital Stock of the Company or Subordinated
Obligations made by exchange (including any such exchange pursuant to the
exercise of a conversion right or privilege in connection with which cash
is paid in lieu of the issuance of fractional shares) for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of the
Company (other than Disqualified Stock and other than Capital Stock issued
or sold to a Subsidiary or an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries) or a substantially
concurrent capital contribution to the Company; provided, however, that
(A) such purchase, redemption, repurchase, defeasance, retirement or other
acquisition shall be excluded in subsequent calculations of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale or
capital contribution shall be excluded in subsequent calculations under
clause (B) of Section 4.4(a);
(ii) any purchase, redemption, repurchase, defeasance, retirement or
other acquisition of Subordinated Obligations made by exchange for, or out
of the proceeds of the substantially concurrent sale of, Subordinated
Obligations of the Company that is permitted to be Incurred pursuant to
Section 4.3; provided, however, that such purchase, redemption,
repurchase, defeasance, retirement or other acquisition shall be excluded
in subsequent calculations of the amount of Restricted Payments;
(iii) any purchase, redemption, repurchase, defeasance, retirement
or other acquisition of Subordinated Obligations from Net Available Cash
to the extent permitted by Section 4.6; provided, however, that such
purchase, redemption, repurchase, defeasance, retirement or other
acquisition shall be excluded in subsequent calculations of the amount of
Restricted Payments;
(iv) any purchase, redemption, repurchase, defeasance, retirement or
other acquisition of Subordinated Obligations upon a Change of Control to
the extent required by the agreement governing such Subordinated
Obligations but only if the Company shall have complied with Section 4.8
and purchased all Securities tendered pursuant to the offer to repurchase
all the Securities required thereby, prior to purchasing or repaying such
Subordinated Obligations; provided, however, that (A) the purchase price
(stated as a percentage of principal amount or issue price plus accrued
original issue discount, if less) of such Subordinated Obligations shall
not be greater than the price (stated as a percentage of principal amount)
of the Securities pursuant to any such offer to repurchase the Securities
in the event of a Change of Control, and (B) any such purchase,
redemption, repurchase, defeasance, retirement or other acquisition shall
be included in subsequent calculations of the amount of Restricted
Payments;
(v) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 4.4(a); provided, however, that such dividends shall be
included in subsequent calculations of the amount of Restricted Payments;
(vi) payments by the Company to repurchase or otherwise acquire
Capital Stock or options, warrants or other rights in respect thereof, in
each case from Management Investors, such payments not to exceed an amount
equal to $500,000 in any fiscal year and $2.0 million in the aggregate
(plus the Net Cash Proceeds received by the Company since
42
the Issue Date as a capital contribution from the sale to Management
Investors of Capital Stock or options, warrants or other rights in respect
thereof); provided, however, that such payments, loans, advances,
dividends or distributions will be included in subsequent calculations of
the amount of Restricted Payments;
(vii) loans, advances, dividends or distributions by the Company or
any Restricted Subsidiary to TCG (A) to pay its costs (including all
professional fees and expenses) incurred to comply with its reporting
obligations under federal or state laws or under the Indenture, including
any reports filed with respect to the Securities Act, Exchange Act or the
respective rules and regulations promulgated thereunder, (B) to make
payments in respect of its indemnification obligations owing to directors,
officers, employees or other Persons under its charter or by-laws or
pursuant to written agreements with any such Person, to the extent such
payments relate to the Company and its Subsidiaries and to any period
ending on or prior to the closing of the Restructuring Transactions, (C)
to permit TCG to pay all reasonable fees and expenses payable by it in
connection with the Restructuring Transactions, or (D) in respect of any
Securities and Capital Stock of the Company which are held by TCG;
(viii) payments by the Company or any Restricted Subsidiary to TCG
(A) to satisfy or permit TCG to satisfy obligations under or in respect of
the Tax Sharing Agreement, (B) to pay or permit TCG to pay, with respect
to any period ending on or prior to the closing of the Restructuring
Transactions, any taxes, charges or assessments, including but not limited
to sales, use, transfer, rental, ad valorem, value-added, stamp, property,
consumption, franchise, license, capital, net worth, gross receipts,
excise, occupancy, intangibles or similar taxes, charges or assessments
(other than federal, state or local taxes measured by income and federal,
state or local withholding imposed on payments made by TCG by virtue of
its being incorporated or having capital stock outstanding (but not by
virtue of owning stock of any corporation other than the Company or any of
its Subsidiaries), or being a holding company parent of the Company or
receiving dividends from or other distributions in respect of the stock of
the Company, or having guaranteed any obligations of the Company or any
Subsidiary thereof, or having made any payment in respect of any of the
items for which the Company is permitted to make payments to TCG pursuant
to this covenant, or (C) to pay or permit TCG to pay, with respect to any
period ending on or prior to the closing of the Restructuring
Transactions, any other federal, state, foreign, provincial or local taxes
measured by income for which TCG is liable up to an amount not to exceed
with respect to such federal taxes the amount of any such taxes which the
Company would have been required to pay on a separate company basis or on
a consolidated basis if the Company had filed a consolidated return on
behalf of an affiliated group (as defined in Section 1504 of the Internal
Revenue Code of 1986, as amended, or an analogous provision of state,
local or foreign law) of which it were the common parent, or with respect
to state and local taxes, on a combined basis if the Company had filed a
combined return on behalf of an affiliated group consisting only of the
Company and its Subsidiaries; provided, however, that such payments will
be excluded in subsequent calculations of the amount of Restricted
Payments;
(ix) the payment by the Company of interest or principal under the
Securities, or dividends or redemption amounts under the Capital Stock of
the Company; except that (A) dividends shall not be paid on the Capital
Stock of the Company so long as there shall exist an Event of Default
hereunder or under any Senior Indebtedness or so long as dividends on such
Capital Stock shall otherwise be prohibited under the terms of any Senior
Indebtedness, (B) no Capital Stock shall be redeemed prior to its stated
mandatory
43
redemption date and then only so long as there does not exist an Event of
Default hereunder or under any Senior Indebtedness and so long as
redemptions of such Capital Stock shall otherwise be prohibited under the
terms of any Senior Indebtedness, and (C) dividends shall not be paid on
the Capital Stock of the Company prior to an initial public offering of
such common stock and then thereafter only in an amount not to exceed in
any fiscal year 6% of the net proceeds received by the Company, in or from
such public offering; provided, however, that such payments, dividends or
distributions will be included in subsequent calculations of the amount of
Restricted Payments; and
(x) payments, loans, advances, dividends or distributions by the
Company or any Restricted Subsidiary in an aggregate amount not to exceed
$10.0 million (in addition to payments, loans, advances, dividends or
distributions otherwise permitted under this Section 4.4(b)); provided,
however, that (A) the Company or any Restricted Subsidiary shall not be
permitted to make Restricted Payments under this clause (x) unless, after
giving effect thereto (including the Incurrence of any Indebtedness to
fund such Restricted Payment), the Consolidated Coverage Ratio of the
Company would be at least equal to 2.25:1.00 and (B) such loans, advances,
dividends or distributions will be included in subsequent calculations of
the amount of Restricted Payments; and
provided, further, that in the case of clauses 4.4(b) (vii), (ix) and (x) no
Default or Event of Default shall have occurred or be continuing at the time of
such payment after giving effect thereto.
Section 4.5. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (ii)
make any loans or advances to the Company or (iii) transfer any of its property
or assets to the Company, except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the date of the Indenture (including, without
limitation, the Senior Credit Facility);
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary (x) pursuant to an agreement relating to any Indebtedness
Incurred by a Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Company, or of another Person
that is assumed by the Company or a Restricted Subsidiary in connection
with the acquisition of assets from, or merger or consolidation with, such
Person (other than Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to
consummate, the transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted Subsidiary or was
acquired by the Company, or such acquisition of assets, merger or
consolidation) and outstanding on the date of such acquisition, merger or
consolidation or (y) pursuant to any agreement (not relating to any
Indebtedness) in existence when a Person becomes a Subsidiary of the
Company or when such agreement is acquired by the Company or any
Subsidiary thereof, that is not created in contemplation of such Person
becoming such a Subsidiary or such acquisition (for purposes of this
clause (2), if another Person is the Successor Company, any Subsidiary or
agreement thereof shall be deemed acquired or assumed, as the case may be,
by the Company when such Person becomes the Successor Company);
44
(3) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement (a "Refinancing Agreement") effecting
a refinancing of Indebtedness Incurred pursuant to, or that otherwise
extends, renews, refinances or replaces, an agreement referred to in
clause (1) or (2) of this Section 4.5 or this clause (3) (an "Initial
Agreement") or contained in any amendment to an Initial Agreement;
provided, however, that the encumbrances and restrictions contained in any
such Refinancing Agreement or amendment are no less favorable to the
Holders of the Securities taken as a whole than encumbrances and
restrictions contained in the Initial Agreement or Initial Agreements to
which such Refinancing Agreement or amendment relates (as conclusively
determined in good faith by the Board of Directors);
(4) any encumbrance or restriction (A) that restricts in a customary
manner the subletting, assignment or transfer of any property or asset
that is subject to a lease, license or similar contract, or the assignment
or transfer of any lease, license or other contract, (B) by virtue of any
transfer of, agreement to transfer, option or right with respect to, or
Lien on, any property or assets of the Company or any Restricted
Subsidiary not otherwise prohibited by the Indenture, (C) contained in
mortgages, pledges or other security agreements securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or restrictions
restrict the transfer of the property subject to such mortgages, pledges
or other security agreements or (D) pursuant to customary provisions
restricting dispositions of real property interests set forth in any
reciprocal easement agreements of the Company or any Restricted
Subsidiary;
(5) any restriction with respect to a Restricted Subsidiary (or any
of its property or assets) imposed pursuant to an agreement entered into
for the direct or indirect sale or disposition of all or substantially all
the Capital Stock or assets of such Restricted Subsidiary (or the property
or assets that are subject to such restriction) pending the closing of
such sale or disposition;
(6) any encumbrance or restriction on the transfer of property or
assets required by any regulatory authority having jurisdiction over the
Company or any Restricted Subsidiary or any of their businesses; and
(7) any encumbrance or restriction pursuant to an agreement relating
to any Indebtedness incurred, or any sale of receivables, by a Foreign
Subsidiary.
Section 4.6. Limitation on Sales of Assets. (a) The Company will not, and
will not permit any Restricted Subsidiary to, make any Asset Disposition unless:
(i) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming
responsibility for, any liabilities, contingent or otherwise) at the time
of such Asset Disposition at least equal to the fair market value of the
shares and assets subject to such Asset Disposition, as such fair market
value may be determined (and shall be determined, to the extent such Asset
Disposition or any series of related Asset Dispositions involves aggregate
consideration in excess of $1.0 million) in good faith by the Board of
Directors, whose determination shall be conclusive (including as to the
value of all non-cash consideration); however, the provisions of this
clause (i) shall not be applicable to any Asset Disposition which is
permitted under the terms of any Senior Indebtedness or as to which the
holders of such Senior Indebtedness shall have consented thereto;
45
(ii) at least 80% of the consideration therefor (excluding, in the
case of an Asset Disposition of assets, any consideration by way of relief
from, or by any other Person assuming responsibility for, any liabilities,
contingent or otherwise, which are not Indebtedness) received by the
Company or such Restricted Subsidiary is in the form of cash; however, the
provisions of this clause (ii) shall not be applicable to any Asset
Disposition which is permitted under the terms of any Senior Indebtedness
or as to which the holders of such Senior Indebtedness shall have consent
thereto; and
(iii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) as follows:
(A) first, to the extent the Company elects (or is required by
the terms of any Senior Indebtedness or Indebtedness (other than
Preferred Stock) of a Restricted Subsidiary), to prepay, repay or
purchase Senior Indebtedness or such Indebtedness of a Restricted
Subsidiary (in each case other than Indebtedness owed to the Company
or a Restricted Subsidiary) within 365 days after the date of such
Asset Disposition;
(B) second, to the extent of the balance of Net Available Cash
after application in accordance with clause (A) above, to the extent
the Company or such Restricted Subsidiary elects, to reinvest in
Additional Assets (including by means of an Investment in Additional
Assets by a Restricted Subsidiary with Net Available Cash received
by the Company or another Restricted Subsidiary) within 365 days
from the date of such Asset Disposition, or, if such reinvestment in
Additional Assets is a project authorized by the Board of Directors
that will take longer than such 365 days to complete, the period of
time necessary to complete such project;
(C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B) above
(such balance, the "Excess Proceeds"), and provided that a purchase
of the Securities by the Company is not then prohibited under the
terms of any Senior Indebtedness, to make an offer to purchase
Securities and (to the extent required by the terms thereof) any
other Senior Subordinated Indebtedness, pursuant and subject to the
conditions of the Indenture and the agreements governing such other
Indebtedness, at a purchase price of 100% of the principal amount
thereof (or accreted value, as applicable) plus accrued and unpaid
interest, if any, to the purchase date; and
(D) fourth, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A), (B) and (C)
(or if a purchase of the Securities by the Company is prohibited
under the terms of any Senior Indebtedness) above, to fund (to the
extent consistent with any other applicable provision of the
Indenture) any general corporate purpose (including the repayment of
any Subordinated Obligations);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions of this covenant, the Company and the Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with this covenant
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions that is not applied in accordance with this covenant exceeds $5.0
million. If the
46
aggregate principal amount (or accreted value, as applicable) of Securities and
Senior Subordinated Indebtedness validly tendered and not withdrawn in
connection with an offer pursuant to clause (C) above exceeds the Excess
Proceeds, the Excess Proceeds will be apportioned between the Securities and
such Senior Subordinated Indebtedness, with the portion of the Excess Proceeds
payable in respect of the Securities to equal the lesser of (x) the Excess
Proceeds amount multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Securities and the denominator of which is
the sum of the outstanding principal amount of the Securities and the
outstanding principal amount (or accreted value, as applicable) of the relevant
Senior Subordinated Indebtedness, and (y) the aggregate principal amount of
Securities validly tendered and not withdrawn.
For the purposes of this covenant, the following are deemed to be cash:
(v) Cash Equivalents, (w) the assumption of Indebtedness of the Company (other
than Disqualified Stock of the Company) or any Restricted Subsidiary and the
release of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition, (x) Indebtedness of any
Restricted Subsidiary that is no longer a Restricted Subsidiary as a result of
such Asset Disposition, to the extent that the Company and each other Restricted
Subsidiary is released from any Guarantee of such Indebtedness in connection
with such Asset Disposition, (y) securities received by the Company or any
Restricted Subsidiary from the transferee that are promptly converted by the
Company or such Restricted Subsidiary into cash, and (z) consideration
consisting of Indebtedness of the Company or any Restricted Subsidiary.
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to clause 4.6(a)(iii)(C) above (provided that a purchase of
the Securities by the Company is not then prohibited under the terms of any
Senior Indebtedness), the Company will be required to purchase Securities
tendered pursuant to an offer by the Company for the Securities (the "Offer") at
a purchase price of 100% of their principal amount plus accrued and unpaid
interest to the Purchase Date in accordance with the procedures (including
prorating in the event of oversubscription) set forth in the Indenture. If the
aggregate purchase price of the Securities tendered pursuant to the Offer is
less than the Net Available Cash allotted to the purchase of the Securities, the
remaining Net Available Cash will be available to the Company for use in
accordance with clause 4.6(a)(iii)(C) above (to repay Senior Subordinated
Indebtedness) or clause 4.6(a)(iii)(D) above. The Company shall not be required
to make an Offer for Securities pursuant to this covenant if the Net Available
Cash available therefor (after application of the proceeds as provided in
clauses 4.6(a)(iii)(A) and 4.6(a)(iii)(B) above) is less than $5.0 million for
any particular Asset Disposition (which lesser amounts shall be carried forward
for purposes of determining whether an Offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition).
(c) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.6. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.6, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.6 by virtue
thereof.
Section 4.7. Limitation on Transactions with Affiliates. (a) The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
47
Transaction") on terms (i) that taken as a whole are less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained at the time of such transaction in arm's-length dealings with a
Person who is not such an Affiliate and (ii) that, in the event such Affiliate
Transaction involves an aggregate amount in excess of $1.0 million, are not in
writing and (x) have not been approved by a majority of the members of the Board
of Directors having no material personal financial interest in such Affiliate
Transaction, or (y) in the event there are no such members, as to which the
Company has not obtained a Fairness Opinion (as hereinafter defined). In
addition, any transaction involving aggregate payments or other transfers by the
Company and its Restricted Subsidiaries in excess of $10.0 million will also
require an opinion (a "Fairness Opinion") from an independent investment banking
firm or appraiser, as appropriate, of national prominence, to the effect that
the terms of such transaction taken as a whole are either (i) no less favorable
to the Company or such Restricted Subsidiary, as the case may be, than those
that could be obtained at the time of such transaction in arm's-length dealings
with a Person who is not an Affiliate or (ii) fair to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of view.
(b) The provisions of Section 4.7(a) shall not prohibit (i) any Restricted
Payment permitted by Section 4.4, any Permitted Investment, or any other
transaction specifically excluded from the definition of the term "Restricted
Payment", (ii) the performance of the Company's or Restricted Subsidiary's
obligations under any employment contract, collective bargaining agreement,
employee benefit plan, related trust agreement or any other similar arrangement
heretofore or hereafter entered into in the ordinary course of business, (iii)
payment of compensation, performance of indemnification or contribution
obligations, or any issuance, grant or award of stock, options or other
securities, to employees, officers or directors in the ordinary course of
business, (iv) maintenance in the ordinary course of business of benefit
programs or arrangements for employees, officers or directors, including
vacation plans, health and the insurance plans, deferred compensation plans, and
retirement or savings plans and similar plans, (v) any transaction between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries, (vi)
loans or advances made to directors, officers or employees of the Company or any
Restricted Subsidiary, or guarantees in respect thereof or otherwise made on
their behalf (including any payments under such guarantees), (A) in respect of
travel, entertainment or moving-related expenses incurred in the ordinary course
of business, or (B) in the ordinary course of business not exceeding $500,000 in
the aggregate outstanding at any time, (vii) guarantees of borrowings by
Management Investors in connection with the purchase of Capital Stock of the
Company by such Management Investors, which guarantees are permitted by Section
4.3, and payments thereunder, (viii) the Restructuring Transactions and the
incurrence and payment of all fees and expenses payable in connection therewith,
(ix) any other transaction arising out of agreements in existence on the Issue
Date, (x) execution, delivery and performance of the Tax Sharing Agreement and
the Management Agreements, including the ongoing payment of fees to GSCP of up
to $1.75 million per year plus reasonable out of pocket expenses, (xi) any
commercial or other business transaction in the ordinary course of business with
any Permitted Holder or any Affiliate thereof, on terms that taken as a whole
are no less favorable to the Company and its Restricted Subsidiaries than those
that could be obtained at the time in arm's-length dealings with a Person who is
not an Affiliate of the Company, (xii) any transaction in the ordinary course of
business, or approved by a majority of the members of the Board of Directors
having no material personal financial interest in such transaction, between the
Company or any Restricted Subsidiary and any Affiliate of the Company controlled
by the Company that is a joint venture or similar entity primarily engaged in a
Related Business, and (xiii) any of the Restructuring Transactions.
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Section 4.8. Change of Control. (a) Upon the occurrence of a Change of
Control, and provided that a purchase of the Securities by the Company is not
then prohibited under the terms of any Senior Indebtedness, each Securityholder
shall have the right to require the Company to repurchase all or any part of
such Holder's Securities at a purchase price in cash equal to 101% of the
Accreted Value thereof to the date of repurchase, provided, however, that
notwithstanding the occurrence of a Change of Control, the Company shall not be
obligated to purchase the Securities pursuant to this Section 4.8 in the event
that it has exercised its right to redeem all the Securities under Section 3.7
hereof.
In the event that at the time of such Change of Control the terms of the
Bank Indebtedness restrict or prohibit the repurchase of Securities pursuant to
this Section, then prior to the mailing of the notice to Holders provided for in
Section 4.8(b) below but in any event within 30 days following any Change of
Control (unless the Company has exercised its right to redeem all the Securities
under Section 3.7 hereof), the Company shall (i) repay in full all Bank
Indebtedness or offer to repay in full all Bank Indebtedness and repay the Bank
Indebtedness of each lender who has accepted such offer or (ii) obtain the
requisite consent under the agreements governing the Bank Indebtedness to permit
the repurchase of the Securities as provided for in Section 4.8(b) below.
(b) Unless the Company has exercised its right to redeem all the
Securities under Section 3.7 hereof, within 30 days following any Change of
Control (or at the Company's option, prior to such Change of Control but after
the public announcement thereof) (except as provided in the proviso to the first
sentence of Section 4.8(a)), the Company shall mail a notice to each Holder with
a copy to the Trustee stating: (1) that a Change of Control has occurred or will
occur and that such Holder has (or upon such occurrence will have) the right to
require the Company to purchase such Holder's Securities at a purchase price in
cash equal to 101% of the Accreted Value thereof to the date of purchase; (2)
the circumstances and relevant facts and financial information regarding such
Change of Control; (3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); (4) the
instructions determined by the Company, consistent with this Section, that a
Holder must follow in order to have its Securities purchased; and (5) that if
such offer is made prior to such Change of Control, payment is conditioned on
the occurrence of such Change of Control.
(c) Holders electing to have a Security purchased shall be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders shall be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date a facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Security which was delivered for purchase by
the Holder and a statement that such Holder is withdrawing his election to have
such Security purchased.
(d) On the purchase date, all Securities purchased by the Company under
this Section shall be delivered to the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid interest, if any, to the
Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.8. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.8, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.8 by virtue
thereof.
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Section 4.9. Compliance Certificate; Notice of Default. The Company shall
deliver to the Trustee within 120 days after the end of each fiscal year of the
Company an Officer's Certificate signed by the principal executive, principal
financial or principal accounting officer of the Company complying with Section
314(a)(4) of the TIA and stating that a review of its activities and the
activities of its Subsidiaries during the preceding fiscal year has been made
under the supervision of the signing Officer with a view to determining whether
the Company has kept, observed, performed and fulfilled its obligations under
this Indenture and further stating, as to each Officer signing such certificate,
whether or not the signer knows of any failure by the Company or any Subsidiary
of the Company to comply with any conditions or covenants in this Indenture,
and, if such signer does know of such a failure to comply, the certificate shall
describe such failure with particularity and describe what actions, if any, the
Company proposes to take with respect to such failure. The Company shall file
with the Trustee written notice of the occurrence of any Default or Event of
Default within five Business Days of its becoming aware of any such Default or
Event of Default.
Section 4.10. Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, create or permit to
exist any Lien (other than Permitted Liens) on any of its property or assets
(including Capital Stock of any other Person), whether owned on the date of the
Indenture or thereafter acquired, securing any Indebtedness that is not Senior
Indebtedness or Guarantor Senior Indebtedness (the "Initial Lien"), unless
contemporaneously therewith effective provision is made to secure the
Indebtedness due under the Indenture and the Securities or, in respect of Liens
on any Restricted Subsidiary's property or assets, any Note Guarantee of such
Restricted Subsidiary, equally and ratably with such obligation for so long as
such obligation is so secured by such Initial Lien. Any such Lien thereby
created in favor of the Securities or any such Note Guarantee will be
automatically and unconditionally released and discharged upon (i) the release
and discharge of the Initial Lien to which it relates, or (ii) any sale,
exchange or transfer to any Person not an Affiliate of the Company of the
property or assets secured by such Initial Lien, or of all of the Capital Stock
held by the Company or any Restricted Subsidiary in, or all or substantially all
the assets of, any Restricted Subsidiary creating such Lien.
Section 4.11. Additional Note Guarantors. (a) If the Company or any of its
Domestic Subsidiaries shall acquire or create another Domestic Subsidiary that
is a Significant Subsidiary, then the Company, the Trustee and such newly
acquired or created Domestic Subsidiary shall execute and deliver a supplemental
indenture evidencing such Note Guarantee and deliver an Opinion of Counsel, in
accordance with the terms of this Indenture. The Company will also have the
right to cause any Restricted Subsidiary so to become a Note Guarantor. Each
Note Guarantee will be limited to an amount not to exceed the maximum amount
that can be Guaranteed by that Subsidiary without rendering the Note Guarantee,
as it relates to such Subsidiary, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally. Such Note Guarantee may be substantially in the
form of Exhibit D hereto or in such other form as may be reasonably satisfactory
to the Trustee and the Company.
(b) Except as provided in the applicable Note Guarantee, no Note Guarantor
may consolidate or merge with into (whether or not such Note Guarantor is the
surviving Person) another Person unless (i) the Person formed by or surviving
any such consolidation or merger (if other than a Note Guarantor or the Company)
assumes all the obligations of such Note Guarantor under the Note Guarantee and
the Indenture pursuant to a supplemental indenture, in form reasonably
satisfactory to the Trustee, and (ii) if such merger or consolidation is with a
50
Person other than the Company or a Restricted Subsidiary, (x) immediately after
such transaction, no Default or Event of Default exists and (y) the Company
will, at the time of such transaction after giving pro forma effect thereto, be
permitted to incur at least $1.00 of additional Indebtedness pursuant to Section
4.3(a).
Section 4.12. Limitation on the Sale or Issuance of Preferred Stock of
Restricted Subsidiaries. The Company will not sell any shares of Preferred Stock
of a Restricted Subsidiary, and will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Preferred Stock to
any Person (other than to the Company or a Restricted Subsidiary, or to
directors as directors' qualifying shares, or (in the case of any Foreign
Subsidiary) to the extent required by applicable law); provided, however, that
(a) the Company or any Restricted Subsidiary is permitted to sell Preferred
Stock of a Subsidiary in compliance with the terms of Section 4.6 and (b) any
such Preferred Stock may be issued or sold if Incurred by any Restricted
Subsidiary in compliance with Section 4.3.
ARTICLE 5
Successor Company
Section 5.1. When Company May Merge or Transfer Assets. The Company shall
not consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of the
United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) will expressly assume, by
an indenture supplemental hereto, executed and delivered to the Trustee,
in form reasonably satisfactory to the Trustee, all the obligations of the
Company under the Securities and the Indenture; (ii) immediately after
giving effect to such transaction (and treating any Indebtedness which
becomes an obligation of the Successor Company or any Restricted
Subsidiary as a result of such transaction as having been Incurred by the
Successor Company or such Restricted Subsidiary at the time of such
transaction), no Default will have occurred and be continuing; (iii)
immediately after giving effect to such transaction, the Consolidated
Coverage Ratio of the Successor Company would be at least equal to the
greater of (A) 1.75:1.00 and (B) a ratio equal to 75% of the actual
Consolidated Coverage Ratio of the Company as of such date of
determination; and (iv) each Note Guarantor (other than any party to any
such merger) shall have delivered a written instrument in form and
substance reasonably satisfactory to the Trustee confirming its Note
Guarantee; and (v) the Company will have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each to the effect that
such consolidation, merger or transfer and such supplemental indenture (if
any) comply with the Indenture; provided that (x) in giving such opinion
such counsel may rely on such Officer's Certificate as to any matters of
fact (including without limitation as to compliance with the foregoing
clauses (ii) and (iii)), and (y) no Opinion of Counsel will be required
for a consolidation, merger or transfer described in the last paragraph of
this Section 5.1. Any Indebtedness that becomes an obligation of the
Company or any Restricted Subsidiary (or that is deemed to be Incurred by
any Restricted Subsidiary that becomes a Restricted Subsidiary) as a
result of such transaction undertaken in compliance with this covenant,
and any Refinancing Indebtedness with respect thereto, shall be deemed to
have been Incurred in compliance with Section 4.3.
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The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Indenture, and
thereafter the predecessor Company shall be relieved of all obligations and
covenants under this Agreement, except that, in the case of a conveyance,
transfer or lease of all or substantially all its assets, the predecessor
Company will not be released from the obligation to pay the principal of and
interest on the Securities.
Notwithstanding Section 5.1(ii) and (iii), (1) any Restricted Subsidiary
may consolidate with, merge into or transfer all or part of its properties and
assets to the Company and (2) the Company may merge with an Affiliate
incorporated or organized for the purpose of reincorporating or reorganizing the
Company in another jurisdiction to realize tax or other benefits.
Notwithstanding the foregoing, the Company may enter into, perform and
consummate the Transactions.
ARTICLE 6
Defaults and Remedies
Section 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and such default continues for a period of 30
days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due at its Stated Maturity, upon optional
redemption, upon required repurchase, upon declaration or otherwise,
whether or not such payment shall be prohibited by Article 10;
(3) the Company fails to comply with Section 5.1;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.10, 4.12 or 4.12 (other than a failure to purchase
Securities when required under Section 4.6 or 4.8) and such failure
continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in (1), (2),
(3) or (4) above) and such failure continues for 60 days after the notice
specified below;
(6) any Note Guarantor fails to comply with its obligations under
any Note Guarantee to which such Note Guarantor is a party, after any
applicable grace period;
(7) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or the
acceleration by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or
its foreign currency equivalent at the time;
(8) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
52
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to insolvency;
(9) any judgment or decree for the payment of money (net of any
insurance or indemnity payments actually received in respect thereof prior
to or within 90 days from the entry thereof, or to be received in respect
thereof in the event any appeal thereof shall be unsuccessful) in excess
of $5.0 million or its foreign currency equivalent at the time is entered
against the Company or any Significant Subsidiary that is not discharged,
or bonded or insured by a third Person and either (A) an enforcement
proceeding has been commenced upon such judgment or decree or (B) there is
a period of 90 days following the entry of such judgment or decree during
which such judgment or decree is not discharged, waived or the execution
thereof stayed; or
(10) any Note Guarantee by a Note Guarantor which is a Significant
Subsidiary shall cease to be in full force and effect (except as
contemplated by the terms thereof or of this Indenture) or any such Note
Guarantor shall deny or disaffirm its obligations in writing under this
Indenture or any Note Guarantee and such Default continues for 10 days
after the notice specified below.
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of Default until
the Trustee or the Holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any Event of Default under clause (6) above and any event which with the giving
of notice or the lapse of time would become an Event of Default under clause
(4), (5) or (9) above, its status and what action the Company is taking or
proposes to take with respect thereto.
Section 6.2. Acceleration. If an Event of Default (other than an Event of
Default specified in Section 6.1(7) or (8) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least a majority in principal amount of the outstanding Securities by notice to
the Company and the Trustee, may declare the principal of
53
all the Securities to be due and payable. Upon such a declaration, the principal
(which, if prior to the Scheduled Maturity Date of the Securities, shall be
limited to the Accreted Value) of and interest on the Securities shall be due
and payable immediately. If an Event of Default specified in Section 6.1(7) or
(8) with respect to the Company occurs and is continuing, the principal (which,
if prior to the Scheduled Maturity Date of the Securities, shall be limited to
the Accreted Value) of and interest on the Securities shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any Securityholders. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
Section 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal (which, if prior to the Scheduled Maturity Date of the Securities,
shall be limited to the Accreted Value) of or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
Section 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security or (ii) a Default in
respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
Section 6.5. Control by Majority. The Holders of a majority in principal
amount of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
Section 6.6. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue the
remedy;
54
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the outstanding
Securities do not give the Trustee a direction inconsistent with the
request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
Section 6.7. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
principal of and premium (if any) and interest on the Securities held by such
Holder, on or after the respective due dates expressed in the Securities, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.8. Collection Suit by Trustee. If an Event of Default specified
in Section 6.1(1) or (2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount then due and owing (together with interest on any unpaid
interest to the extent lawful) and the amounts provided for in Section 7.7.
Section 6.9. Trustee May File Proofs of Claim. The Trustee may file such
proofs of claim and other papers or documents and take such other actions,
including participating as a member, voting or otherwise, of any committee of
creditors appointed in the matter, as may be necessary or advisable in order to
have the claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company, any Subsidiary or Note Guarantor, their
creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements
and-advances of the Trustee, its agents and its counsel, and any other amounts
due the Trustee under Section 7.7.
Section 6.10. Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the
following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness and Guarantor Senior
Indebtedness to the extent required by Article 10 and any Note Guarantee;
THIRD: to Securityholders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Securities for principal and
interest, respectively; and
55
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Company, a suit by the Trustee, a suit by a Holder pursuant to
Section 6.7 or a suit by Holders of more than 10% in principal amount of the
Securities.
Section 6.12. Waiver of Stay or Extension Laws. The Company (to the extent
it may lawfully do so) shall not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
Section 7.1. Duties of Trustee. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise the rights and powers vested in it
by this Indenture and use the same degree of care and skill in their exercise as
a prudent Person would exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to the Trustee,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(c) 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 paragraph does not limit the effect of paragraph (b) of
this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.1.
(e) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds to believe that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(h) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Trustee shall be subject to the
provisions of this Section and to the provisions of the TIA.
Section 7.2. Rights of Trustee. Subject to Section 7.1: (a) The Trustee
may rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officer's Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute
willful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
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(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, debenture,
note or other paper or document unless requested in writing to do so by the
Holders of not less than a majority in principal amount of the Securities at the
time outstanding, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney, during reasonable business hours and subject
to executing a confidentiality undertaking in customary form with respect to
confidential and/or proprietary information of the Company; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding.
(g) The Trustee shall not be deemed to have knowledge of any default or
fact the occurrence of which requires the Trustee to take any action (other than
a payment default hereunder) unless a Trust Officer actually knows of such
default or fact.
(h) The Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Indenture; and
(i) The Trustee shall not be deemed to have notice of any Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such an Event of Default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
(j) Upon request of the Trustee, the Company shall make reasonable efforts
to execute and deliver such further instruments and do such further acts as may
be reasonably necessary to carry out more effectively the purpose of this
Indenture. The parties hereto agree that the purpose of this provision shall be
for administrative purposes only.
(k) 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.
(l) The Trustee may request that the Company deliver an Officer's
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 Officer's Certificate may be signed by any person authorized to sign an
Officer's Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded.
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Section 7.3. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, co-registrar or
co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
Section 7.4. Trustee's Disclaimer. The Trustee shall not be responsible
for and makes no representation as to the validity or adequacy of this Indenture
or the Securities, it shall not be accountable for the Company's use of the
proceeds from the Securities, and it shall not be responsible for any statement
of the Company in this Indenture or in any document issued in connection with
the sale of the Securities or in the Securities other than the Trustee's
certificate of authentication.
Section 7.5. Notice of Defaults. If a Default occurs and is continuing and
if it is known to a Trust Officer of the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or premium (if any) or interest
on any Security (including payments pursuant to the mandatory redemption
provisions of such Security, if any), the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
Section 7.6. Reports by Trustee to Holders. As promptly as practicable
after each March 15 beginning with the March 15 following the date of this
Indenture (and in any event prior to May 15 in each year), but only upon the
occurrence within the previous 12 months of any events specified in TIA Section
313(a), the Trustee shall mail to each Securityholder a brief report dated as of
March 15 that complies with TIA Section 313(a). The Trustee shall also comply
with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each stock exchange (if any) on which the Securities
are listed. The Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any delisting thereof.
Section 7.7. Compensation and Indemnity. The Company shall pay to the
Trustee, Paying Agent and Registrar from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee, Paying Agent, Registrar, and
each of their officers, directors, agents and employees (each in their
respective capacities), for and hold each of them harmless against any and all
loss, demand, claim, liability or expense (including reasonable attorneys' fees
and expenses) incurred by them without negligence or bad faith on their part in
connection with the acceptance or administration of this trust and the
performance of their duties hereunder. The Trustee, Paying Agent and Registrar
shall notify the Company of any claim for which they may seek indemnity promptly
upon obtaining actual knowledge thereof; provided that any failure so to notify
the Company shall not relieve the Company of its indemnity obligations hereunder
except to the extent the Company shall have been adversely affected thereby. The
Company shall defend the claim and the indemnified party shall provide
reasonable cooperation at the
59
Company's expense in the defense. Such indemnified parties may have separate
counsel and the Company shall pay the fees and expenses of such counsel;
provided that the Company shall not be required to pay such fees and expenses if
it assumes such indemnified parties' defense and, in such indemnified parties'
reasonable judgment, there is no conflict of interest between the Company and
such parties in connection with such defense. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse any
expense or indemnify against any loss, liability or expense incurred by an
indemnified party through any indemnified party's own willful misconduct,
negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall survive
the discharge of this Indenture or the resignation or removal of the Trustee.
When the Trustee, Paying Agent or Registrar incurs expenses after the occurrence
of a Default specified in Section 6.1(7) or (8) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
Section 7.8. Replacement of Trustee. The Trustee may resign at any time by
so notifying the Company in writing. The Holders of a majority in principal
amount of the outstanding Securities may remove the Trustee by so notifying the
Company and the Trustee and may appoint a successor Trustee with the consent of
the Company, which shall not be unreasonably withheld. The Company shall remove
the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of a
majority in principal amount of the outstanding Securities and such Holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the outstanding Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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If the Trustee fails to comply with Section 7.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this Section
7.8, the Company's obligations under Section 7.7 shall continue for the benefit
of the retiring Trustee.
Section 7.9. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion or
consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
Section 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
Section 7.12. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.
ARTICLE 8
Discharge of Indenture; Defeasance
Section 8.1. Discharge of Liability on Securities; Defeasance. (a) When
(i) the Company delivers to the Trustee all outstanding Securities (other than
Securities replaced pursuant to Section 2.7) for cancellation or (ii) all
outstanding Securities have become due and
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payable, whether at maturity or as a result of the mailing of a notice of
redemption pursuant to Article 3 hereof and the Company irrevocably deposits
with the Trustee funds or U.S. Government Obligations on which payment of
principal and interest when due will be sufficient to pay at maturity or upon
redemption all outstanding Securities, including interest thereon to such
redemption date if subsequent to the Scheduled Maturity Date of the Securities
(other than Securities replaced pursuant to Section 2.7), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.1(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officer's Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.2 (subject
to any requirement of the TIA), 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.10, 4.11, 4.12,
5.1 (iii) and the operation of Sections 6.1(4), 6.1(6), 6.1(7) (with respect to
Subsidiaries of the Company only), 6.1(8) (with respect to Subsidiaries of the
Company only) and 6.1(9) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.1(4), 6.1(6),
6.1(7), 6.1(8) (but only with respect to certain bankruptcy events of a
Significant Subsidiary), 6.1(9) or 6.1(10) or because of the failure of the
Company to comply with (iii) of Section 5.1. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Note Guarantor will be
automatically and unconditionally released and discharged from all of its
obligations under its Note Guarantee.
Upon satisfaction of the conditions set forth herein and upon request of
the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, Sections 2.3, 2.4, 2.5,
2.6, 2.7, 7.7, 7.8, 8.4, 8.5 and 8.6 shall survive until the Securities have
been paid in full. Thereafter, Sections 7.7, 8.4 and 8.5 shall survive.
Section 8.2. Conditions to Defeasance. The Company may exercise its legal
defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal, premium (if
any) and interest on the Securities to maturity or redemption, as the case
may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
62
(3) 90 days pass after the deposit is made and during the 90-day
period no Default specified in Section 6.1(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a material default under any
other material agreement binding on the Company and is not prohibited by
Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or
is qualified as, a regulated investment company under the Investment
Company Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (ii) since the date of this Indenture there
has been a change in the applicable federal income tax law, in either case
to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Securityholders will not recognize income, gain or loss
for federal income tax purposes as a result of such defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such covenant defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) the Company delivers to the Trustee an Officer's Certificate and
an Opinion of Counsel, each to the effect that all conditions precedent
under this Section 8.2 to the defeasance and discharge of the Securities
as contemplated by this Article 8 have been complied with; provided that
in giving such opinion such counsel may rely on such Officer's Certificate
as to any matters of fact (including without limitation as to compliance
with the foregoing clauses (1), (2), (3) and (4)).
Either defeasance option may be exercised to any redemption date or to the
maturity date for the Securities. Before or after a deposit, the Company may
make arrangements reasonably satisfactory to the Trustee for the redemption of
Securities at a future date in accordance with Article 3.
Section 8.3. Application of Trust Money. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities. Money and securities
so held in trust are not subject to Article 10.
Section 8.4. Repayment to Company. The Trustee and the Paying Agent shall
promptly turn over to the Company upon written request any excess money or
securities held by them at any time.
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Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general unsecured creditors and all liability of the
Trustee or the Paying Agent with respect to such trust money shall thereupon
cease.
Section 8.5. Indemnity for Government Obligations. The Company shall pay
and shall indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against deposited U.S. Government Obligations or the principal and
interest received on such U.S. Government Obligations other than any tax, fee or
other charge that by law is for the account of the Securityholders.
Section 8.6. Reinstatement. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 8
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of interest on or principal of any Securities because of the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
Section 9.1. Without Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without notice to or consent of any
Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5, or otherwise to provide for the
assumption by a successor of the obligations of the Company under the
Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to provide that any Indebtedness that becomes or will become an
obligation of the Successor Company pursuant to a transaction governed by
the provisions of Article 5 (and that is not a Subordinated Obligation) is
Senior Subordinated Indebtedness for the purposes of this Indenture;
(5) to add Guarantees with respect to the Securities;
64
(6) to secure the Securities;
(7) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(8) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA; or
(9) to make any change that does not adversely affect the rights of
any Securityholder.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
Section 9.2. With Consent of Holders. The Company and the Trustee may
amend this Indenture or the Securities without notice to any Securityholder but
with the consent of, and compliance with any provision of this Indenture or the
Securities may be waived by, the Holders of at least a majority in principal
amount of the outstanding Securities. However, without the consent of each
Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Scheduled Maturity Date of
any Security;
(4) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may be redeemed in accordance
with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Article 10 that adversely affects the rights
of any Securityholder;
(7) impair the right of any Holder to receive payment of principal
of and interest on such Holder's Securities on or after the due dates
therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Securities; or
(8) make any change to the second sentence of this Section.
In addition, without the consent of the Securityholders holding 90% in
principal amount of the Securities then outstanding, no amendment may release
any Note Guarantor that is a Significant Subsidiary from any of its obligations
under its Note Guarantee or this Indenture, except in compliance with the terms
thereof or of this Indenture.
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It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that adversely
affects the rights under Article 10 of any holder of Senior Indebtedness then
outstanding unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the Company shall
mail to Securityholders a notice briefly describing such amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section.
Section 9.3. Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Securities shall comply with the TIA as then in effect.
Section 9.4. Effect of Amendment; Revocation and Effect of Consents and
Waivers. Upon the execution of any amendment under this Article 9, this
Indenture shall be modified in accordance therewith, and such amendment shall
form a part of this Indenture for all purposes. A consent to an amendment or a
waiver by a Holder of a Security shall bind the Holder and every subsequent
Holder of that Security or portion of the Security that evidences the same debt
as the consenting Holder's Security, even if notation of the consent or waiver
is not made on the Security. However, any such Holder or subsequent Holder may
revoke the consent or waiver as to such Holder's Security or portion of the
Security if the Trustee receives the notice of revocation before the date the
instrument providing for the amendment or waiver is signed by the parties
thereto. After an amendment or waiver becomes effective, it shall bind every
Securityholder. An amendment or waiver becomes effective once the requisite
number of consents are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 180
days after such record date.
Section 9.5. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Security shall not affect the validity of any amendment or waiver.
Section 9.6. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In
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signing such amendment the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive, and (subject to Section 7.1) shall
be fully protected in relying upon, an Officer's Certificate and an Opinion of
Counsel each to the effect that such amendment is authorized or permitted by
this Indenture and complies with the provisions hereof (including Section 9.3);
provided that in giving such opinion such counsel may rely on such Officer's
Certificate as to any matters of fact.
Section 9.7. Payment for Consent. Neither the Company nor any Affiliate of
the Company shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame, and subject to the terms and conditions, set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
Subordination
Section 10.1. Agreement To Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities and related obligations are subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full (when due) of all existing and future Senior Indebtedness and
that the subordination is for the benefit of and enforceable by the holders of
Senior Indebtedness. The Securities shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of the Company and only Indebtedness
of the Company that is Senior Indebtedness shall rank senior to the Securities
in accordance with the provisions set forth herein. For purposes of these
subordination provisions, the Indebtedness evidenced by the Securities is deemed
to include the liquidated damages payable pursuant to the provisions set forth
in the Securities, the Exchange and Registration Rights Agreement and other
payment obligations related to the Securities. All provisions of this Article 10
shall be subject to Section 10.12.
Section 10.2. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets or securities of the Company upon a total or partial
liquidation or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of the Senior Indebtedness before Securityholders shall be
entitled to receive any payment of principal of or interest on, or other
obligation with respect to, the Securities; and
(2) until the Senior Indebtedness is paid in full, any payment or
distribution to which Securityholders would be entitled but for this
Article 10 shall be made to holders of Senior Indebtedness as their
interests may appear.
Section 10.3. Default on Senior Indebtedness. The Company may not pay the
principal of, or premium (if any) or interest on the Securities or any related
obligation or make any deposit pursuant to Section 8.1 and may not purchase,
redeem or otherwise retire any Securities (collectively, "pay the Securities")
if (i) any Senior Indebtedness is not paid when due in cash or
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Cash Equivalents or (ii) any other default on Senior Indebtedness occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its terms
unless, in either case, (x) the default has been cured or waived and any such
acceleration has been rescinded in writing or (y) such Senior Indebtedness has
been paid in full in cash or Cash Equivalents; provided, however, that the
Company may pay the Securities without regard to the foregoing if the Company
and the Trustee receive written notice approving such payment from the
Representative of the Designated Senior Indebtedness with respect to which
either of the events in clause (i) or (ii) of this sentence has occurred and is
continuing. In addition, during the continuance of any default (other than a
default described in clause (i) or (ii) of the preceding sentence) with respect
to any Designated Senior Indebtedness pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Securities for a period (a "Payment
Blockage Period") commencing upon the receipt by the Trustee (with a copy to the
Company) of written notice (a "Blockage Notice") of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
by repayment in full of such Designated Senior Indebtedness or (iii) because the
default giving rise to such Blockage Notice is no longer continuing).
Notwithstanding the provisions described in the immediately preceding sentence
(but subject to the provisions contained in the first sentence of this Section),
unless the holders of such Designated Senior Indebtedness or the Representative
of such holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Securities after the end of
such Payment Blockage Period. Not more than one Blockage Notice may be given in
any consecutive 360-day period, irrespective of the number of defaults with
respect to Designated Senior Indebtedness during such period; provided, however,
that if any Blockage Notice within such 360-day period is given by or on behalf
of any holders of Designated Senior Indebtedness (other than Bank Indebtedness),
the Representative of Bank Indebtedness may give another Blockage Notice within
such period; provided further, however, that in no event may the total number of
days during which any Payment Blockage Period or Periods is in effect exceed 179
days in the aggregate during any 360 consecutive day period.
Section 10.4. Acceleration a Payment of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representative) of the acceleration. If any Designated Senior
Indebtedness is outstanding, the Company may not pay the Securities until five
Business Days after such holders or the Representative of the Designated Senior
Indebtedness receive notice of such acceleration and, thereafter, may pay the
Securities only if this Article 10 otherwise permits payment at that time.
Section 10.5. When a Distribution Must Be Paid Over. If a payment or
distribution is made to Securityholders or the Trustee as Paying Agent that
because of the provisions of Article 10 should not have been made to them, the
Securityholders or other such Person who receives the payment or distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
Section 10.6. Subrogation. After all Senior Indebtedness is paid in full
and until the Securities are paid in full, Securityholders shall be subrogated
to the rights of holders of Senior Indebtedness to receive distributions
applicable to Senior Indebtedness. A distribution made under this Article 10 to
holders of Senior Indebtedness which otherwise would have been made
68
to Securityholders is not, as between the Company and Securityholders, a payment
by the Company on Senior Indebtedness.
Section 10.7. Relative Rights. This Article 10 defines the relative rights
of Securityholders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
Section 10.8. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
Section 10.9. Rights of Trustee and Paying Agent. The Company shall give
prompt written notice to the Trustee of any fact known to the Company which
would prohibit the making of any payment to or by the Trustee in respect of the
Securities. Failure to give such notice shall not affect the subordination of
the Securities to Senior Indebtedness. Notwithstanding Section 10.3, the Trustee
or Paying Agent may continue to make payments on the Securities and shall not be
charged with knowledge of the existence of facts that would prohibit the making
of any such payments unless, not less than two Business Days prior to the date
of such payment, a Trust Officer of the Trustee receives notice satisfactory to
it that payments may not be made under this Article 10. The Company, the
Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness may give the notice; provided, however, that, if an issue of
Senior Indebtedness has a Representative, only the Representative may give the
notice. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any Senior
Indebtedness (or a Representative of such holder) to establish that such notice
has been given by a holder of such Senior Indebtedness or Representative
thereof. The Paying Agent shall be subject to the subordination provisions
hereof to the same extent as the Trustee.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
Section 10.10. Distribution or Notice to Representative. Whenever a
payment or distribution is to be made or a notice given to holders of Senior
Indebtedness, the payment or distribution may be made and the notice given to
their Representative (if any).
Section 10.11. Article 10 Not To Prevent Events of Default or Limit Right
To Accelerate. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this
69
Article 10 shall have any effect on the right of the Securityholders or the
Trustee to accelerate the maturity of the Securities.
Section 10.12. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article 8 by the Trustee for the
payment of principal of and interest on the Securities shall not be subordinated
to the prior payment of any Senior Indebtedness or subject to the restrictions
set forth in this Article 10 if the deposit of such money was permitted by the
Senior Credit Facility, and none of the Securityholders shall be obligated to
pay over any such amount to the Company or any holder of Senior Indebtedness of
the Company or any other creditor of the Company.
Section 10.13. Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article 10, the Trustee and the Securityholders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
Section 10.14. Trustee To Effectuate Subordination. Each Securityholder by
accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination between the Securityholders and the holders of Senior Indebtedness
as provided in this Article 10 and appoints the Trustee as attorney-in-fact for
any and all such purposes.
Section 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Securityholders or the Company or any other
Person, money or assets to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article 10 or otherwise. With respect to the holders
of Senior Indebtedness, the Trustee undertakes to perform or to observe only
such of its covenants or obligations as are specifically set forth in this
Article 10 and no implied covenants or obligations with respect to holders of
Senior Indebtedness shall be read into this Indenture against the Trustee.
Section 10.16. Reliance by Holders of Senior Indebtedness on Subordination
Provisions. Each Securityholder by accepting a Security acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to
70
each holder of any Senior Indebtedness, whether such Senior Indebtedness was
created or acquired before or after the issuance of the Securities, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.
Section 10.17. Trustee's Compensation Not Prejudiced. Nothing in this
Article shall apply to amounts due to the Trustee for acting as such hereunder
pursuant to other sections of this Indenture.
ARTICLE 11
Miscellaneous
Section 11.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 11.2. Notices. Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail addressed as follows:
if to the Company: with a copy to:
------------------ ---------------
Telex Communications, Inc. Dechert
00000 Xxxxxxxx Xxxxxx South 00 Xxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer Attention: Xxxxxx X. Xxxxxx
if to the Trustee:
------------------
BNY Midwest Trust Company
0 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed to
the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
All notices and communications shall be deemed to be duly given: at the
time delivered, if personally delivered, or five Business Days after being
deposited into the mail, if mailed. All notices may be waived by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice for all purposes of this
Indenture. Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
71
Section 11.3. Communication by Holders with Other Holders. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar and their agents shall have the protection of TIA Section
312(c).
Section 11.4. Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Company to the Trustee to take or refrain from
taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officer's Certificate in form and substance reasonably satisfactory
to the Trustee to the effect that, in the opinion of the signers, all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to
the Trustee to the effect that, in the opinion of such counsel, all such
conditions precedent have been complied with, provided that in giving such
opinion such counsel may rely on any Officer's Certificate or certificate of a
public official as to any matters of fact; and
provided, further, that, in the case of any such application or request as to
which the furnishing of any Officer's Certificate or Opinion of Counsel is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Section 11.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement to the effect that the individual or counsel 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 to the effect that, in the opinion of such
individual or counsel, such individual or counsel has made such
examination or investigation as is necessary to enable such individual or
counsel to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual or counsel, such covenant or condition has been complied with;
provided that an Opinion of Counsel can rely as to matters of fact on an
Officer's Certificate or certificates of public officials.
Section 11.6. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the
72
Trustee actually knows are so owned shall be so disregarded. Also, subject to
the foregoing, only Securities outstanding at the time shall be considered in
any such determination.
Section 11.7. Acts of Holders; Rules by Trustee, Paying Agent and
Registrar. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage in principal amount of the Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such specified percentage of Holders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. The Trustee
may make reasonable rules for action by or a meeting of Securityholders not
inconsistent with the foregoing. The Registrar and the Paying Agent may make
reasonable rules for their functions.
Section 11.8. Legal Holidays. A "Legal Holiday" is a Saturday, a Sunday or
a day on which commercial banking institutions (including, without limitation,
the Federal Reserve System) are authorized or required by law to close in New
York City. If a payment date is a Legal Holiday, payment shall be made on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period. If a regular record date is a Legal Holiday, the
record date shall not be affected.
Section 11.9. Governing Law. This Indenture and the Securities shall be
governed by, and construed in accordance with, the laws of the State of New
York.
Section 11.10. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company or a Note Guarantor shall not have any
liability for any obligations of the Company or any Note Guarantor under the
Securities, this Indenture or any Note Guarantee or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release shall be part of the consideration for the issue of the Securities.
Section 11.11. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successors. All agreements of the Trustee in
this Indenture shall bind its successors.
Section 11.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 11.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
Section 11.14. Separability. In case any provision of this Indenture, the
Securities or the Note Guarantees shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
Section 11.15. Benefits of Indenture. Nothing in this Indenture, the
Securities or any Note Guarantee, expressed or implied, shall give to any
Person, other than the parties hereto and
73
their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
TELEX COMMUNICATIONS, INC.
By: /S/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and CFO
BNY MIDWEST TRUST COMPANY
By: /S/ X. X. Xxxxxxx
--------------------------------------
Name: X.X. Xxxxxxx
Title: Assistant Vice President
74
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN
DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("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 SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
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.(1)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, 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 SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) PURSUANT TO OFFERS AND SALES 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 RULES 501 (A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN
EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000 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, OR (E) 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 (D) OR (E) TO REQUIRE THE DELIVERY OF AN
--------
(1) This paragraph should only be added if the Security is issued in global
form.
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND IN THE CASE OF ANY OF THE FOREGOING CLAUSES (A)-(E), A CERTIFICATE
OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO COMPANY AND THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.
13% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2006
Note No. A[ ] CUSIP No.________
$[ ]
TELEX COMMUNICATIONS, INC., a Delaware corporation, promises to pay
to [ ], or registered assigns, the principal sum of $[ ] on November 15,
2006.
Issue Price: $[ ] as of November 21, 2001.
Interest Payment Dates: May 15 and November 15, subsequent
to November 15, 2006 if the
principal amount is not paid on
November 15, 2006.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set forth on the other side of
this Security.
[Seal] TELEX COMMUNICATIONS, INC.
By:________________________________
Dated: November [ ], 2001
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
BNY MIDWEST TRUST COMPANY,
as Trustee, certifies that this is one of the
Securities referred to in the Indenture
By:________________________________
Authorized Signatory
2
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
13% Senior Subordinated Discount Note due 2006
1. Interest
TELEX COMMUNICATIONS, INC., a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above and in the manner hereinafter
provided. Interest will not accrue prior to November 15, 2006. Thereafter, the
Company will pay interest semiannually on May 15 and November 15 of each year.
Interest not paid on any interest payment date will be added to the principal
amount of the Securities until paid. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
Interest, if paid in cash as provided above, will be paid to the Persons
who are registered holders of Securities at the close of business on the May 1
and November 1 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments, including any interest which has been added to principal as provided
above. The Company will pay principal and any cash interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may, at its option, pay principal and
any cash interest (i) by check payable in such money or (ii) by wire transfer of
immediately available funds to such account as may be designated by a Holder and
as specified in the books of the Registrar. It may mail an interest check to a
Holder's registered address.
3. Paying Agent and Registrar
Initially, BNY Midwest Trust Company, an Illinois trust company (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of November
21, 2001 (as amended or supplemented from time to time, the "Indenture"),
between the Company and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on
the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
3
The Securities are general unsecured obligations of the Company limited to
an aggregate deemed issue price of $56,250,000 and which will represent an
aggregate principal amount as of the Scheduled Maturity Date of the Securities
of approximately $105,374,169 (subject to Section 2.7 of the Indenture). This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Initial Securities and any Exchange Securities issued in
exchange for the Initial Securities pursuant to the Indenture. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
issuance of debt by the Company, the payment of dividends and other
distributions and acquisitions or retirements of the Company's Capital Stock and
Subordinated Obligations, the incurrence by the Company and its Restricted
Subsidiaries of Liens on its property and assets which do not equally and
ratably secure the Securities, the sale or transfer of assets and Subsidiary
Stock, investments by the Company, consolidations, mergers and transfers of all
or substantially all of the Company's assets and transactions with Affiliates.
In addition, the Indenture limits the ability of the Company and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Optional Redemption
Except as set forth in the next two paragraphs, the Securities may not be
redeemed pursuant to this paragraph 5 at the option of the Company prior to
September 15, 2003. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices expressed in percentages of Accreted Value as of the
redemption date, plus accrued interest, if any, to the redemption date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the related interest payment date), if redeemed during the
12-month period beginning on or after September 15 of the years set forth below:
Period Redemption Price
2003........................................ 106.5000%
2004........................................ 104.3333%
2005........................................ 102.1667%
2006 and thereafter......................... 100.0000%
Notwithstanding the foregoing, at any time and from time to time prior to
September 15, 2003, the Company may redeem Securities which represent in the
aggregate up to 33 1/3% of the original aggregate principal amount of the
Securities payable as of the Scheduled Maturity Date with the proceeds of one or
more Public Equity Offerings by the Company following which there is a Public
Market, at a redemption price equal to 113% of Accreted Value as of the
redemption date; provided, however, that at least 66 2/3% of the original
aggregate principal amount of the Securities payable as of the Scheduled
Maturity Date must remain outstanding after each such redemption.
At any time on or prior to September 15, 2006, the Securities may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days' prior notice (but in no
event more than 180 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the Accreted Value thereof plus the Applicable Premium as of
the Redemption Date.
4
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of all Securities (or portions thereof) to be redeemed
on the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date accretion ceases on such Securities (or such portions thereof) called for
redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price in cash equal to 101% of the Accreted Value of the Securities to be
repurchased to the date of repurchase as provided in, and subject to the terms
of, the Indenture.
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give effect to such
provisions and appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of 15
days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes, subject to provisions for record dates with respect to payment
of interest.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
5
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of and interest on the Securities to redemption or maturity, as the
case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the consent of
the Holders of a majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
Guarantees with respect to the Securities, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the
Company, or to provide that any Indebtedness that becomes or will become an
obligation of the Successor Company pursuant to Article 5 (and that is not a
Subordinated Obligation) is Senior Subordinated Indebtedness for the purposes of
the Indenture, or to comply with any request of the SEC in connection with
qualifying the Indenture under the TIA, or to make any other change that does
not adversely affect the rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default in any
payment of interest on any Security when due, continued for 30 days, (ii) a
default in the payment of principal of any Security when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise, whether or not such payment is prohibited by Article 10 of the
Indenture, (iii) the failure by the Company to comply with its obligations under
Section 5.1 of the Indenture, (iv) the failure by the Company to comply for 30
days after notice with certain of its obligations under Article 4 of the
Indenture (in each case, other than a failure to purchase Securities), (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Securities or the Indenture, (vi) the failure by any
Note Guarantor to comply with its obligations under any Note Guarantee to which
such Note Guarantor is a party, after any applicable grace period, (vii) the
failure by the Company or any Significant Subsidiary to pay any Indebtedness
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or its
foreign currency equivalent (the "cross acceleration provision"), (viii) certain
events of bankruptcy, insolvency or reorganization of the Company or a
Significant Subsidiary (the "bankruptcy provisions"), (ix) the rendering of any
judgment or decree for the payment of money in an amount (net of any insurance
or indemnity payments actually received in respect thereof prior to or within 90
days from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) in excess of $5.0 million or its
foreign currency equivalent against the Company or a Significant Subsidiary that
is not discharged, or bonded or insured by a third Person, if (A) an enforcement
proceeding thereon is commenced or (B) such judgment or decree remains
outstanding for a period of 90 days following such judgment or decree and is not
discharged, waived or stayed (the "judgment default provision") or (x) the
failure of any Note
6
Guarantee by a Note Guarantor which is a Significant Subsidiary to be in full
force and effect (except as contemplated by the terms thereof or of the
Indenture) or the denial or disaffirmation in writing by any such Note Guarantor
of its obligations under the Indenture or any Note Guarantee if such Default
continues for 10 days. If an Event of Default (other than a Default relating to
certain events of bankruptcy, insolvency or reorganization of the Company)
occurs and is continuing, the Trustee or the Holders of at least a majority in
principal amount of the outstanding Securities may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable
immediately. Certain events of bankruptcy, insolvency, or reorganization are
Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest) if and so long as
a committee of its Trust Officers in good faith determines that withholding
notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or a
Note Guarantor shall not have any liability for any obligations of the Company
or any Note Guarantor under the Securities, the Indenture or any Note Guarantee
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
7
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company may cause CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
TELEX COMMUNICATIONS, INC.
00000 XXXXXXXX XXXXXX XXXXX
XXXXXXXXXX, XXXXXXXXX 00000
ATTENTION: CHIEF FINANCIAL OFFICER(952) 736-4240
8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
________________________________________________________________________________
Date:____________________ Your Signature:______________________________________
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
9
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED SECURITIES
This certificate relates to $____________ principal amount of Securities held in
(check applicable space) _______ book-entry or _______ definitive form by the
undersigned.
The undersigned (check one box below):
|_| has requested the Trustee by written order to deliver in exchange for its
beneficial interest in the Global Security held by the Depository a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated above);
|_| has requested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
(1) |_| acquired for the undersigned's own account, without transfer
(in satisfaction of Section 2.06(a)(ii)(A) or Section 2.06(d)(i)(A)
of the Indenture); or
(2) |_| transferred to the Company; or
(3) |_| transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933, as amended; or
(4) |_| transferred to an institutional "accredited investor" (as
defined in Rules 501(a)(1), (2), (3) or (7) under the Securities Act
of 1933, as amended), that has furnished to the Trustee a signed
letter containing certain representations and agreements (the form
of which letter appears as Exhibit C to the Indenture; or
(5) |_| transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933, as amended.
10
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4), (5) or
(6) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended, such as the exemption provided by Rule 144
under such Act.
---------------------------------------
Signature
Signature Guarantee:
-------------------------------- ---------------------------------------
Signature
(Signature must be guaranteed by a participant in a
signature guarantee medallion program)
11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.6 or 4.8 of the Indenture, state the amount:
$____________________
Date:____________________ Your Signature:______________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
12
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("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 SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
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.(2)
TELEX COMMUNICATIONS, INC.
13% SENIOR SUBORDINATED DISCOUNT NOTE DUE 2006, SERIES A
Note No. A[ ] CUSIP No.________
$[ ]
TELEX COMMUNICATIONS, INC., a Delaware corporation, promises to pay
to [ ], or registered assigns, the principal sum of $[ ] on November 15, 2006.
Issue Price: $[ ] as of November 21, 2001.
Interest Payment Dates: May 15 and November 15, subsequent
to November 15, 2006 if the
principal amount is not paid on
November 15, 2006.
Record Dates: May 1 and November 1.
Additional provisions of this Security are set
forth on the other side of this Security.
[Seal] TELEX COMMUNICATIONS, INC.
By:_______________________________
----------------
(2) This paragraph should only be added if the Security is issued in global
form.
Dated: November [ ], 2001
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
BNY MIDWEST TRUST COMPANY,
as Trustee, certifies that this is one of the Securities
referred to in the Indenture
By:________________________________________
Authorized Signatory
2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
13% Senior Subordinated Discount Note due 2006, Series A
1. Interest
Telex Communications, Inc., a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above and in the manner hereinafter
provided. Interest will not accrue prior to November 15, 2006. Thereafter, the
Company will pay interest semiannually on May 15 and November 15 of each year.
Interest not paid on any interest payment date will be added to the principal
amount of the Securities until paid. Interest will be computed on the basis of a
360-day year of twelve 30-day months. The Company shall pay interest on overdue
principal at the rate borne by the Securities, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
2. Method of Payment
Interest, if paid in cash as provided above, will be paid to the Persons
who are registered holders of Securities at the close of business on the May 1
and November 1 next preceding the interest payment date even if Securities are
canceled after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments, including any interest which has been added to principal as provided
above. The Company will pay principal and any cash interest in money of the
United States that at the time of payment is legal tender for payment of public
and private debts. However, the Company may, at its option, pay principal and
any cash interest (i) by check payable in such money or (ii) by wire transfer of
immediately available funds to such account as may be designated by the Holder
and as specified in the books of the Registrar. It may mail an interest check to
a Holder's registered address.
3. Paying Agent and Registrar
Initially, BNY Midwest Trust Company, an Illinois trust company (the
"Trustee"), will act as Paying Agent and Registrar. The Company may appoint and
change any Paying Agent, Registrar or co-registrar without notice. The Company
or any of its domestically incorporated Wholly Owned Subsidiaries may act as
Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of November
21, 2001 (as amended or supplemented from time to time, the "Indenture"),
between the Company and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on
the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
3
The Securities are general unsecured obligations of the Company limited to
an aggregate deemed issue price of $56,250,000 and which will represent an
aggregate principal amount as of the Scheduled Maturity Date of the Securities
of approximately $105,374,169 (subject to Section 2.7 of the Indenture). This
Security is on2e of the Exchange Securities referred to in the Indenture. The
Securities include the Initial Securities and any Exchange Securities issued in
exchange for the Initial Securities pursuant to the Indenture. The Initial
Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
issuance of debt by the Company, the payment of dividends and other
distributions and acquisitions or retirements of the Company's Capital Stock and
Subordinated Obligations, the incurrence by the Company and its Restricted
Subsidiaries of Liens on its property and assets which do not equally and
ratably secure the Securities, the sale or transfer of assets and Subsidiary
Stock, investments by the Company, consolidations, mergers and transfers of all
or substantially all of the Company's assets and transactions with Affiliates.
In addition, the Indenture limits the ability of the Company and its Restricted
Subsidiaries to restrict distributions and dividends from Restricted
Subsidiaries.
5. Optional Redemption
Except as set forth in the next two paragraphs, the Securities may not be
redeemed pursuant to this paragraph 5 at the option of the Company prior to
September 15, 2003. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices expressed in percentages of Accreted Value as of the
redemption date, plus accrued interest, if any, to the redemption date (subject
to the right of Holders of record on the relevant record date to receive
interest due on the related interest payment date), if redeemed during the
12-month period beginning on or after September 15 of the years set forth below:
Period Redemption Price
2003........................................ 106.5000%
2004........................................ 104.3333%
2005........................................ 102.1667%
2006 and thereafter......................... 100.0000%
Notwithstanding the foregoing, at any time and from time to time prior to
September 15, 2003, the Company may redeem Securities which represent in the
aggregate up to 33 1/3% of the original aggregate principal amount of the
Securities payable as of the Scheduled Maturity Date with the proceeds of one or
more Public Equity Offerings by the Company following which there is a Public
Market, at a redemption price equal to 113% of Accreted Value as of the
redemption date; provided, however, that at least 66 2/3% of the original
aggregate principal amount of the Securities payable as of the Scheduled
Maturity Date must remain outstanding after each such redemption.
At any time on or prior to September 15, 2006, the Securities may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days prior notice (but in no
event more than 180 days after the occurrence of such Change of Control) mailed
by first-class mail to each Holder's registered address, at a redemption price
equal to 100% of the Accreted Value thereof plus the Applicable Premium as of
the Redemption Date.
4
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his registered address. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. If money sufficient to
pay the redemption price of all Securities (or portions thereof) to be redeemed
on the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date accretion ceases on such Securities (or such portions thereof) called for
redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the right,
subject to certain conditions specified in the Indenture, to cause the Company
to repurchase all or any part of the Securities of such Holder at a purchase
price in cash equal to 101% of the Accreted Value of the Securities to be
repurchased to the date of repurchase as provided in, and subject to the terms
of, the Indenture.
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined in the
Indenture. To the extent provided in the Indenture, Senior Indebtedness must be
paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give effect to such
provisions and appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements or transfer documents
and to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not register the transfer of or exchange any Securities selected
for redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities for a period of 15
days before a selection of Securities to be redeemed or 15 days before an
interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of it
for all purposes, subject to the provisions for record dates with respect to
payment of interest.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
5
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate some
or all of its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of and interest on the Securities to redemption or maturity, as the
case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the consent of the Holders of at
least a majority in principal amount outstanding of the Securities and (ii) any
default or noncompliance with any provision may be waived with the consent of
the Holders of a majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture, without the consent of
any Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, omission, defect or inconsistency, or to
comply with Article 5 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated Securities, or to add
Guarantees with respect to the Securities, or to secure the Securities, or to
add additional covenants or surrender rights and powers conferred on the
Company, or to provide that any Indebtedness that becomes or will become an
obligation of the Successor Company pursuant to Article 5 of the Indenture (and
that is not a Subordinated Obligation) is Senior Subordinated Indebtedness for
the purposes of the Indenture or to comply with any request of the SEC in
connection with qualifying the Indenture under the Act, or to make certain
changes in the subordination provisions, or to make any change that does not
adversely affect the rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default in any
payment of interest on any Security when due, continued for 30 days, (ii) a
default in the payment of principal of any Security when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise, whether or not such payment is prohibited by Article 10 of the
Indenture, (iii) the failure by the Company to comply with its obligations under
Section 5.1 of the Indenture, (iv) the failure by the Company to comply for 30
days after notice with certain of its obligations under Article 4 of the
Indenture (in each case, other than a failure to purchase Securities), (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Securities or the Indenture, (vi) the failure by any
Note Guarantor to comply with its obligations under any Note Guarantee to which
such Note Guarantor is a party, after any applicable grace period, (vii) the
failure by the Company or any Significant Subsidiary to pay any Indebtedness
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or its
foreign currency equivalent (the "cross acceleration provision"), (viii) certain
events of bankruptcy, insolvency or reorganization of the Company or a
Significant Subsidiary (the "bankruptcy provisions"), (ix) the rendering of any
judgment or decree for the payment of money in an amount (net of any insurance
or indemnity payments actually received in respect thereof prior to or within 90
days from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) in excess of $5.0 million or its
foreign currency equivalent against the Company or a Significant Subsidiary that
is not discharged, or bonded or insured by a third Person, if (A) an enforcement
proceeding thereon is commenced or (B) such judgment or decree remains
outstanding for a period of 90 days following such judgment or decree and is
6
not discharged, waived or stayed (the "judgment default provision") or (x) the
failure of any Note Guarantee by a Note Guarantor which is a Significant
Subsidiary to be in full force and effect (except as contemplated by the terms
thereof or of the Indenture) or the denial or disaffirmation in writing by any
such Note Guarantor of its obligations under the Indenture or any Note Guarantee
if such Default continues for 10 days. If an Event of Default (other than a
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company) occurs and is continuing , the Trustee or the Holders of at
least a majority in principal amount of the outstanding Securities may declare
the principal of and accrued but unpaid interest on all the Securities to be due
and payable immediately. Certain events of bankruptcy, insolvency, or
reorganization are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest) if and so long as
a committee of its Trust Officers in good faith determines that withholding
notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of the Securities and may otherwise deal with and collect obligations
owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the Company or a
Note Guarantor shall not have any liability for any obligations of the Company
or any Note Guarantor under the Securities, the Indenture or any Note Guarantee
or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Security, each Securityholder waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
7
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE
TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
TELEX COMMUNICATIONS, INC.
00000 XXXXXXXX XXXXXX XXXXX
XXXXXXXXXX, XXXXXXXXX 00000
ATTENTION: CHIEF FINANCIAL OFFICER(952) 736-4240
8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _____________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
________________________________________________________________________________
Date:____________________ Your Signature:______________________________________
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 4.6 or 4.8 of the Indenture, state the amount: $
Date:____________________ Your Signature:______________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
10
EXHIBIT C
Transferee Letter of Representation
Telex Communications, Inc.
Dear Sirs:
This certificate is delivered to request a transfer of $_____ principal
amount of the 13% Senior Subordinated Discount Notes due 2006 (the "Securities")
of Telex Communications, Inc. (the "Company").
Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:
Name:
Address:
Taxpayer ID Number:
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rules
501(a)(1), (2), (3) and (7) under the Securities Act of 1933, as amended (the
"Securities Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes and invest in
or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Securities to offer, sell or otherwise
transfer such Securities prior to the date which is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act, (c) pursuant to offers and sales 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 Rules 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own account
or for the account of such an institutional "accredited investor," in each case
in a minimum principal amount of the Securities of $250,000, or (e) pursuant to
any other available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any requirement of law
that the disposition of our property or the property of such investor account or
accounts be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made
pursuant to clause (d) above prior to the Resale Restriction Termination Date,
the transferor shall deliver a letter from the transferee substantially in the
form of this letter to the Company and the Trustee, which shall provide, among
other things, that the transferee is an institutional "accredited investor"
within the meaning of Rules 501 (a)(1), (2), (3) or (7) under the Securities Act
and that it is acquiring such Securities for investment purposes and not for
distribution in violation of the Securities Act. Each purchaser acknowledges
that the Company and the Trustee reserve the right prior to the offer, sale or
other transfer prior to the Resale Termination Date of the Securities pursuant
to clause (d) or (e) above to require the delivery of an opinion of counsel,
certifications or other information satisfactory to the Company and the Trustee.
TRANSFEREE:
By:
-----------------------------------
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EXHIBIT D
FORM OF SUPPLEMENTAL INDENTURE
This Supplemental Indenture, dated as of [__________] (this "Supplemental
Indenture" or "Guarantee"), among [name of Note Guarantor] (the "Guarantor"),
Telex Communications, Inc. (together with its successors and assigns, the
"Company"), [each other then existing Note Guarantor under the Indenture
referred to below,] and [Trustee], as Trustee under the Indenture referred to
below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed and
delivered an Indenture, dated as of November __, 2001 (as amended, supplemented,
waived or otherwise modified, the "Indenture"), providing for the issuance of an
aggregate principal amount of $___ million, with a deemed initial issue price of
$56,250,000, of 13% Senior Subordinated Discount Notes due 2006 of the Company
(the "Securities");
WHEREAS, Section 4.11 of the Indenture provides that under certain
circumstances the Company is required to cause the Guarantor to execute and
deliver to the Trustee a supplemental indenture pursuant to which the Guarantor
shall unconditionally guarantee all of the Company's obligations under the
Securities pursuant to a Note Guarantee on the terms and conditions set forth
herein; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor, the Company[, the other Note Guarantors] and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
ARTICLE I
Definitions
Section 1.1. Defined Terms. As used in this Guarantee, terms defined in
the Indenture or in the preamble or recital hereto are used herein as therein
defined, except that the term "Holders" in this Guarantee shall refer to the
term "Holders" as defined in the Indenture and the Trustee acting on behalf or
for the benefit of such holders. The words "herein", "hereof" and "hereby" and
other words of similar import used in this Supplemental Indenture refer to this
Supplemental Indenture as a whole and not to any particular section hereof.
ARTICLE II
Guarantee
Section 2.1. Guarantee. The Guarantor hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Note Guarantor, to each Holder of the Securities (a)
the full and punctual payment when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, of principal of and interest on the
Securities and all other monetary obligations of the Company under the Indenture
and the Securities and (b) the full and punctual performance within applicable
grace periods of all other obligations of the Company under the Indenture and
the Securities (all the foregoing being hereinafter collectively called the
"Obligations"). The Guarantor further agrees (to the extent permitted by law)
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from it, and that it will remain bound under this
Article II notwithstanding any extension or renewal of any Obligation.
To the extent permitted by applicable law, (i) the Guarantor waives
presentation to, demand of payment from and protest to the Company of any of the
Obligations and also waives notice of protest for nonpayment (ii), the Guarantor
waives notice of any default under the Securities or the Obligations and (iii)
the obligations of the Guarantor hereunder shall not be affected by (a) the
failure of any Holder to assert any claim or demand or to enforce any right or
remedy against the Company or any other person under the Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of the Indenture, the Securities or any other agreement; or
(d) the failure of any Holder to exercise any right or remedy against any other
Guarantor of the Obligations.
The Guarantor further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and, to the extent permitted by applicable law, waives any right
to require that any resort be had by any Holder to any security held for payment
of the Obligations.
Except as otherwise provided herein or under applicable law, the
obligations of the Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment of the
Obligations in full), including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, to the extent permitted by
applicable law, the obligations of the Guarantor herein shall not be discharged
or impaired or otherwise affected by the failure of any Holder to assert any
claim or demand or to enforce any remedy under the Indenture, the Securities or
any other agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or thing or omission or delay to do any other
act or thing which may or might in any manner or to any extent vary the risk of
the Guarantor or would otherwise operate as a discharge of the Guarantor as a
matter of law or equity.
The Guarantor further agrees that, subject to Section 2.2(b) hereof, its
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or
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any part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be restored by any Holder upon the bankruptcy or reorganization
of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder has at law or in equity against the Guarantor by virtue hereof,
upon the failure of the Company to pay the principal of or interest on any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Obligation, the Guarantor hereby promises to and will, upon receipt of written
demand by the Trustee or the Holders of a majority in principal amount of the
then outstanding Securities (the "Majority Securityholders"), forthwith pay, or
cause to be paid, in cash, to the Holders an amount equal to the sum of (i) the
unpaid principal amount of such Obligations then due and owing, (ii) accrued and
unpaid interest on such Obligations then due and owing (but only to the extent
not prohibited by law) and (iii) all other monetary Obligations of the Company
to the Holders then due and owing.
The Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Obligations guarantied
hereby until payment in full of all Obligations. The Guarantor further agrees
(to the extent permitted by applicable law) that, as between such Guarantor, on
the one hand, and the Holders, on the other hand, (x) the maturity of the
Obligations guarantied hereby may be accelerated for the purposes of such
Guarantor's Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guarantied hereby, and (y) in the event of any declaration of acceleration of
such Obligations, such Obligations (whether or not due and payable) shall
forthwith become due and payable by such Guarantor for the purposes of this
Section.
The Guarantor also agrees to pay any and all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or the Holders in
enforcing any rights under this Section.
Section 2.2. Limitation on Liability; Termination, Release and Discharge.
(a) Any term or provision of this Guarantee to the contrary notwithstanding, the
maximum aggregate amount of the Obligations guarantied hereunder by the
Guarantor shall not exceed the maximum amount that can be hereby guarantied
without rendering this Guarantee, as it relates to such Guarantor, voidable
under applicable law, including without limitation applicable law relating to
fraudulent conveyance or fraudulent transfer or affecting the rights or remedies
of creditors generally.
(b) This Guarantee shall terminate and be of no further force or effect,
and the Guarantor shall automatically and unconditionally be released and
discharged from all liabilities and obligations in respect hereof, upon (w)
payment in full of the principal amount of all outstanding Securities (whether
by payment at maturity, purchase, redemption, defeasance, retirement or other
acquisition) and all other monetary Obligations then due and owing, (x) the
merger or consolidation of the Guarantor with and into the Company or another
Note Guarantor that is the surviving Person in such merger or consolidation, or
(y) the exercise by the Company of its legal defeasance option or its covenant
defeasance option, or (z) the sale or other transfer (i) by the Guarantor of all
or substantially all of its assets or (ii) by the Company or a Restricted
Subsidiary of all of the capital stock or other equity interests in the
Guarantor held by the Company or such Restricted Subsidiary, to a Person that is
not an Affiliate of the Company; provided, however, that, in the case of this
clause (z), (1) any such sale or transfer is made in accordance with the terms
of the Indenture (including Section 4.6 thereof), and (2) all
3
obligations of the Guarantor under, and all of its guarantees of, and all of its
pledges of assets or other security interests which secure, any Bank
Indebtedness of the Company shall also terminate upon such release, sale or
transfer (other than with respect to any such Indebtedness that is assumed by
any Person that is not an Affiliate of the Company). Upon notice to the Trustee
that any such payment, merger, consolidation, exercise, sale or transfer has
occurred or is occurring, the Trustee shall execute all agreements and
instruments confirming and acknowledging such termination, release and discharge
as may be reasonably requested by the Guarantor, and the Trustee shall return
the original Guarantee to the Guarantor.
ARTICLE III
Subordination
Section 3.1. Subordination. The Guarantor agrees, and each Securityholder
by accepting a Security agrees, that (a) the obligations of the Guarantor under
this Guarantee are subordinated in right of payment to the prior payment in full
(when due) of all existing and future Guarantor Senior Indebtedness of the
Guarantor, including without limitation any Guarantee by the Guarantor of the
Bank Indebtedness or of any Senior Indebtedness of the Company or of any
Guarantor Senior Indebtedness of any other Note Guarantor, to the extent and in
the matter provided in Article 10 of the Indenture (as if the Guarantor were the
Company for purposes of such Article 10 and all defined terms used therein, and
the Guarantor Senior Indebtedness of the Guarantor were Senior Indebtedness),
and this Guarantor is made subject to such provisions (which are hereby
incorporated herein by reference), and (b) such subordination is for the benefit
of and enforceable by the holders of Guarantor Senior Indebtedness of the
Guarantor.
ARTICLE IV
Miscellaneous
Section 4.1. Notices. All notices and other communications pertaining to
this Guarantee or any Security shall be in writing and shall be deemed to have
been duly given upon the receipt thereof. Such notices shall be delivered by
hand, or mailed, certified or registered mail with postage prepaid (a) if to the
Guarantor, at its address set forth below, with a copy to the Company as
provided in the Indenture for notices to the Company, and (b) if to the Holders
or the Trustee, as provided in the Indenture. The Guarantor by notice to the
Trustee may designate additional or different addresses for subsequent notices
to or communications with the Guarantor.
Section 4.2. Parties. Nothing expressed or mentioned in this Guarantee is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee and the holders of any Guarantor Senior
Indebtedness, any legal or equitable right, remedy or claim under or in respect
of this Guarantee or any provision herein contained.
Section 4.3. Governing Law. This Agreement shall be governed by the laws
of the State of New York.
4
Section 4.4. Severability Clause. In case any provision in this Guarantee
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby and such provision shall be ineffective only to the extent of
such invalidity, illegality or unenforceability.
Section 4.5. Waivers and Remedies. Neither a failure nor a delay on the
part of the Holders or the Trustee in exercising any right, power or privilege
under this Guarantee shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any right,
power or privilege. The rights, remedies and benefits of the Holders and the
Trustee herein expressly specified are cumulative and not exclusive of any other
rights, remedies or benefits which either may have under this Guarantee or at
law, in equity, by statute or otherwise.
Section 4.6. Successors and Assigns. Subject to Section 2.2(b) hereof, (a)
this Guarantee shall be binding upon and inure to the benefit of the Guarantor,
the Trustee, any other parties hereto, the Holders and their respective
successors and assigns and (b) in the event of any transfer or assignment of
rights by any Holder, the rights and privileges conferred upon that party in
this Guarantee and in the Securities shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and conditions of this
Guarantee and the Indenture.
Section 4.7. Modification, etc. Subject to the provisions of, and except
as otherwise provided in, Article 9 of the Indenture (including without
limitation Section 9.1 thereof), no modification, amendment or waiver of any
provision of this Guarantee, nor the consent to any departure by the Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and consented to by the Majority Securityholders, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which it was given. No notice to or demand on the Guarantor in any case shall
entitle such Guarantor or any other guarantor to any other or further notice or
demand in the same, similar or other circumstances.
Section 4.8. Entire Agreement. This Guarantee is intended by the parties
to be a final expression of their agreement in respect of the subject matter
contained herein and, together with the Indenture, supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
Section 4.9. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture.
Section 4.10. Counterparts. The parties hereto may sign one or more copies
of this Supplemental Indenture in counterparts, all of which together shall
constitute one and the same agreement.
Section 4.11. Headings. The headings of the Articles and the sections in
this Guarantee are for convenience of reference only and shall not be deemed to
alter or affect the meaning or interpretation of any provisions hereof.
5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NAME OF GUARANTOR]
By:
Name:
-------------------------------
Title:
------------------------------
TELEX COMMUNICATIONS, INC.
By:
Name:
-------------------------------
Title:
------------------------------
[Add signature block for any other existing
Note Guarantor]
[TRUSTEE ]
By:
Name:
-------------------------------
Title:
------------------------------
6
