EXECUTION COPY
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THE XXXXX GROUP, INC.
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SERIES A AND SERIES B
9 1/2% SENIOR SUBORDINATED NOTES DUE 2007
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INDENTURE
Dated as of February __, 1997
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THE BANK OF NEW YORK
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Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3) ............................................... N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ 7.10
(b) .................................................. 7.10
(c) .................................................. N.A.
311 (a) .................................................. 7.11
(b) .................................................. 7.11
(c) .................................................. N.A.
312 (a) .................................................. 2.05
(b) .................................................. 11.03
(c) .................................................. 11.03
313 (a) .................................................. 7.06
(b)(1) ............................................... N.A.
(b)(2) ............................................... 7.06; 7.07
(c) .................................................. 7.06; 11.02
(d) .................................................. 7.06
314 (a) .................................................. 4.03; 11.02
(b) .................................................. N.A.
(c)(1) ............................................... 11.04
(c)(2) ............................................... 11.04
(c)(3) ............................................... N.A.
(d) .................................................. N.A.
(e) .................................................. 11.05
(f) .................................................. N.A.
315 (a) .................................................. 7.01(b)
(b) .................................................. 7.05; 11.02
(c) .................................................. 7.01(a)
(d) .................................................. 7.01(c)
(e) .................................................. 6.11
316 (a)(last sentence) ................................... 2.09
(a)(1)(A)............................................. 6.05
(a)(1)(B) ............................................ 6.04
(a)(2) ............................................... N.A.
(b) .................................................. 6.07
(c) .................................................. N.A.
317 (a)(1) ............................................... 6.08
(a)(2)................................................ 6.09
(b) .................................................. 2.04
318 (a)................................................... N.A.
(b)................................................... N.A.
(c)................................................... 11.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE......................................... 1
Section 1.01 Definitions........................................................... 1
Section 1.02. Other Definitions..................................................... 12
Section 1.03. Incorporation by Reference of Trust Indenture Act..................... 13
Section 1.04. Rules of Construction................................................. 13
ARTICLE 2 THE SENIOR SUBORDINATED NOTES...................................................... 14
Section 2.01. Form and Dating....................................................... 14
Section 2.02. Execution and Authentication.......................................... 14
Section 2.03. Registrar and Paying Agent............................................ 15
Section 2.04. Paying Agent to Hold Money in Trust................................... 15
Section 2.05. Holder Lists.......................................................... 16
Section 2.06. Transfer and Exchange................................................. 16
Section 2.07. Replacement Senior Subordinated Notes................................. 21
Section 2.08. Outstanding Senior Subordinated Notes................................. 22
Section 2.09. Treasury Senior Subordinated Notes.................................... 22
Section 2.10. Temporary Senior Subordinated Notes................................... 22
Section 2.11. Cancellation.......................................................... 23
Section 2.12. Defaulted Interest.................................................... 23
Section 2.13. CUSIP Number.......................................................... 23
ARTICLE 3 REDEMPTION AND PREPAYMENT.......................................................... 23
Section 3.01. Notices to Trustee.................................................... 23
Section 3.02. Selection of Senior Subordinated Notes to Be Redeemed................. 24
Section 3.03. Notice of Redemption.................................................. 24
Section 3.04. Effect of Notice of Redemption........................................ 25
Section 3.05. Deposit of Redemption Price........................................... 25
Section 3.06. Senior Subordinated Notes Redeemed in Part............................ 25
Section 3.07. Optional Redemption................................................... 25
Section 3.08. Mandatory Redemption.................................................. 26
Section 3.09. Repurchase Offers..................................................... 26
ARTICLE 4 COVENANTS.......................................................................... 28
Section 4.01. Payment of Senior Subordinated Notes.................................. 28
Section 4.02. Maintenance of Office or Agency....................................... 29
Section 4.03. Reports............................................................... 29
Section 4.04. Compliance Certificate................................................ 29
Section 4.05. Taxes................................................................. 30
Section 4.06. Stay, Extension and Usury Laws........................................ 30
Section 4.07. Restricted Payments................................................... 31
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries.......................................................... 32
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock............ 33
Section 4.10. Asset Sales........................................................... 34
Section 4.11. Transactions with Affiliates.......................................... 35
Section 4.12. Liens................................................................. 36
Section 4.13. Corporate Existence................................................... 36
Section 4.14. Offer to Repurchase Upon Change of Control............................ 36
Section 4.15. Issuances and Sales of Capital Stock of Restricted
Subsidiaries.......................................................... 37
Section 4.16. Other Senior Subordinated Debt........................................ 38
Section 4.17. Subsidiary Guarantees................................................. 38
Section 4.18. Payments for Consent.................................................. 38
ARTICLE 5 SUCCESSORS......................................................................... 38
Section 5.01. Merger, Consolidation, or Sale of Assets.............................. 38
Section 5.02. Successor Corporation Substituted..................................... 39
ARTICLE 6 DEFAULTS AND REMEDIES ............................................................. 39
Section 6.01. Events of Default..................................................... 39
Section 6.02. Acceleration.......................................................... 40
Section 6.03. Other Remedies........................................................ 41
Section 6.04. Waiver of Past Defaults............................................... 42
Section 6.05. Control by Majority................................................... 42
Section 6.06. Limitation on Suits................................................... 42
Section 6.07. Rights of Holders of Senior Subordinated Notes to Receive
Payment............................................................... 43
Section 6.08. Collection Suit by Trustee............................................ 43
Section 6.09. Trustee May File Proofs of Claim...................................... 43
Section 6.10. Priorities............................................................ 43
Section 6.11. Undertaking for Costs................................................. 44
ARTICLE 7 TRUSTEE ........................................................................... 44
Section 7.01. Duties of Trustee..................................................... 44
Section 7.02. Rights of Trustee..................................................... 45
Section 7.03. Individual Rights of Trustee.......................................... 46
Section 7.04. Trustee's Disclaimer.................................................. 46
Section 7.05. Notice of Defaults.................................................... 47
Section 7.06. Reports by Trustee to Holders of the Senior Subordinated
Notes................................................................. 47
Section 7.07. Compensation and Indemnity............................................ 47
Section 7.08. Replacement of Trustee................................................ 48
Section 7.09. Successor Trustee by Merger, etc...................................... 49
Section 7.10. Eligibility; Disqualification......................................... 49
Section 7.11. Preferential Collection of Claims Against the Company................. 49
Section 7.12. May Hold Senior Subordinated Notes.................................... 49
Section 7.13. Trustee's Application for Instructions from the Company............... 49
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE........................................... 50
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.............. 50
Section 8.02. Legal Defeasance and Discharge........................................ 50
Section 8.03. Covenant Defeasance................................................... 50
Section 8.04. Conditions to Legal or Covenant Defeasance............................ 51
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions................................. 52
Section 8.06. Repayment to Company.................................................. 53
Section 8.07. Reinstatement......................................................... 53
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER .................................................. 53
Section 9.01. Without Consent of Holders of Senior Subordinated Notes............... 53
Section 9.02. With Consent of Holders of Senior Subordinated Notes.................. 54
Section 9.03. Compliance with Trust Indenture Act................................... 55
Section 9.04. Revocation and Effect of Consents..................................... 55
Section 9.05. Notation on or Exchange of Senior Subordinated Notes.................. 56
Section 9.06. Trustee to Sign Amendments, etc....................................... 56
ARTICLE 10 SUBORDINATION...................................................................... 56
Section 10.01. Agreement to Subordinate.............................................. 56
Section 10.02. Certain Definitions................................................... 56
Section 10.03. Liquidation; Dissolution; Bankruptcy.................................. 57
Section 10.04. Default on Senior Debt................................................ 57
Section 10.05. Acceleration of Senior Subordinated Notes............................. 58
Section 10.06. When Distribution Must Be Paid Over................................... 58
Section 10.07. Notice................................................................ 59
Section 10.08. Subrogation........................................................... 59
Section 10.09. Relative Rights....................................................... 59
Section 10.10. Subordination May Not Be Impaired by Company.......................... 59
Section 10.11. Distribution or Notice to Representative.............................. 60
Section 10.12. Rights of Trustee and Paying Agent.................................... 60
Section 10.13. Authorization to Effect Subordination................................. 61
Section 10.14. Payment............................................................... 61
Section 10.15. Defeasance of this Article 10......................................... 61
Section 10.16. No Claims Against Subsidiaries........................................ 62
Section 10.17. Amendments............................................................ 62
Section 10.18. Trustee Not Fiduciary for Holders of Senior Debt...................... 62
Section 10.19. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights...................................................... 62
ARTICLE 11 MISCELLANEOUS...................................................................... 63
Section 11.01. Trust Indenture Act Controls.......................................... 63
Section 11.02. Notices............................................................... 63
Section 11.03. Communication by Holders of Senior Subordinated Notes with
Other Holders of Senior Subordinated Notes............................ 64
Section 11.04. Certificate and Opinion as to Conditions Precedent.................... 64
Section 11.05. Statements Required in Certificate or Opinion......................... 64
Section 11.06. Rules by Trustee and Agents........................................... 65
Section 11.07. "Trustee" To Include Paying Agent..................................... 65
Section 11.08. No Personal Liability of Directors, Officers, Employees and
Stockholders.......................................................... 65
Section 11.09. Governing Law......................................................... 65
Section 11.10. No Adverse Interpretation of Other Agreements......................... 65
Section 11.11. Successors............................................................ 65
Section 11.12. Severability.......................................................... 65
Section 11.13. Counterpart Originals................................................. 66
Section 11.14. Table of Contents, Headings, etc...................................... 66
ARTICLE 12 GUARANTEE OF SENIOR SUBORDINATED NOTES............................................. 66
Section 12.01. Execution and Delivery of Subsidiary Guarantee........................ 66
Section 12.02. Subordination of Guarantee; Guarantors May Consolidate, etc.,
on Certain Terms...................................................... 66
EXHIBITS
Exhibit A FORM OF SENIOR SUBORDINATED NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF SUBSIDIARY GUARANTEE
Exhibit D FORM OF SUPPLEMENTAL INDENTURE AND
AMENDMENT SUBSIDIARY GUARANTEE
INDENTURE, dated as of February 27, 1997, between The Xxxxx Group, Inc., a
Delaware corporation (the "Company"), and The Bank of New York, as trustee (the
"Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 9 1/2% Series
A Senior Subordinated Notes due 2007 (the "Series A Senior Subordinated Notes")
and the 9 1/2% Series B Senior Subordinated Notes due 2007 (the "Series B
Senior Subordinated Notes" and, together with the Series A Senior Subordinated
Notes, the "Senior Subordinated Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or becomes a Restricted Subsidiary of such specified
Person, including, without limitation, Indebtedness incurred in connection
with, or in contemplation of, such other Person merging with or into or
becoming a Subsidiary of such specified Person, and (ii) Indebtedness secured
by a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar or Paying Agent.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition of any assets (including, without limitation, by way of a sale and
leaseback), other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Restricted Subsidiaries taken as a whole will be governed by Section 4.14
and 5.01 hereof and not by Section 4.10 hereof) and (ii) the issue or sale by
the Company or any of its Restricted Subsidiaries of Equity Interests of any of
the Company's Restricted Subsidiaries whether in a single transaction or a
series of related transactions that have a fair market value in excess of $1.0
million or for Net Proceeds in excess of $1.0 million. Notwithstanding the
foregoing: (i) a transfer of assets by the Company to a Wholly Owned Restricted
Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to
another Wholly Owned Restricted Subsidiary and (ii) a Restricted Payment that
is permitted by Section 4.07 hereof, will not be deemed to be Asset Sales.
"Bank Credit Facility" means (i) that certain Second Amended and
Restated Revolving Credit and Security Agreement dated as of February __, 1997,
among the Company, IBJ Xxxxxxxx Bank & Trust Company, as agent and lender, and
the other lenders, and providing for up to $50 million of revolving credit
borrowing with a final maturity date of Xxxxx 00, 0000, (xx) each instrument
pursuant to which the Obligations under the agreement described in clause (i)
above are amended, deferred, extended, renewed, replaced, refunded or
refinanced, in whole or in part, and (iii) each instrument now or hereafter
evidencing, governing, guaranteeing or securing any Indebtedness under any
agreements described in clause (i) or (ii) above, in each case, as modified,
amended, restated or supplemented from time to time.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) certificates of
deposit and Eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $500 million and a Xxxxx Bank
Watch Rating of "B" or better, (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clauses (ii) and (iii) above entered into with any financial institution
meeting the qualifications specified in clause (iii) above and (v) commercial
paper having the highest rating obtainable from Xxxxx'x Investors Service, Inc.
or Standard & Poor's Ratings Services, a division of XxXxxx-Xxxx and in each
case maturing within one year after the date of acquisition.
"Change of Control" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way
of merger or consolidation), in one or a series of related transactions, of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole, to any "person" or "group" (as such terms are
used in Section 13(d)(3) and Section 14(d)(2) of the Exchange Act) other than
the Principals, (ii) the adoption of a plan relating to the liquidation or
dissolution of the Company, (iii) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any "person" or "group" (as defined above), other than the
Principals, becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more
of the voting power of the voting stock of the Company than at that time is
beneficially owned by the Principals, or (iv) the first day on
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which more than a majority of the members of the Board of Directors of the
Company are not Continuing Directors. For purposes of this definition, any
transfer of an equity interest of an entity that was formed for the purpose of
acquiring voting stock of the Company will be deemed to be a transfer of such
portion of such voting stock as corresponds to the portion of the equity of
such entity that has been so transferred.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Restricted
Subsidiaries for such period plus, without duplication, to the extent deducted
in computing Consolidated Net Income, (i) an amount equal to any extraordinary
loss plus any net loss realized in connection with an Asset Sale, (ii)
provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, (iii) consolidated interest expense of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued and whether or not capitalized (including, without limitation,
amortization of original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations) and (iv) depreciation and amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) of such Person and its Restricted
Subsidiaries for such period, in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the
provision for taxes on the income or profits of, and the depreciation and
amortization of, a Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
(and in same proportion) that the Net Income of such Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended, directly or indirectly, to the Company by such Subsidiary without
prior governmental approval (that has not been obtained), and without direct or
indirect restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that
is not a Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of such Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the cumulative effect of a change in accounting
principles shall be excluded and (v) the Net Income of any Unrestricted
Subsidiary shall be excluded, whether or not distributed to the Company or one
of its Restricted Subsidiaries.
"Consolidated Net Worth" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common equityholders of
such Person and its Restricted Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect
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to any series of preferred stock (other than Disqualified Stock) that by its
terms is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
tangible assets of a going concern business made within 12 months after the
acquisition of such business) subsequent to the date of this Indenture in the
book value of any asset owned by such Person or a consolidated Subsidiary of
such Person, (y) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Subsidiaries (except, in each case, Permitted
Investments), and (z) all unamortized debt discount and expense and unamortized
deferred charges as of such date, all of the foregoing determined in accordance
with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of the
Board of Directors on the date of this Indenture or (ii) was nominated for
election or elected to the Board of Directors with the approval of at least a
majority of the Continuing Directors who were members of the Board of Directors
at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Notes" means Senior Subordinated Notes that are in the
form of the Senior Subordinated Notes attached hereto as Exhibit A, that do not
include the information called for by footnotes 1 and 2 thereof.
"Depositary" means, with respect to the Senior Subordinated Notes
issuable or issued in whole or in part in global form, the Person specified in
Section 2.03 hereof as the Depositary with respect to the Senior Subordinated
Notes, until a successor shall have been appointed and become such pursuant to
the applicable provision of this Indenture, and, thereafter, "Depositary" shall
mean or include such successor.
"Designated Senior Debt" of any Person means such Person's Obligations
under the Bank Credit Facility and any other Senior Debt of such Person
permitted to be incurred by such Person under the terms of this Indenture, the
principal amount of which is $10.0 million or more and that has been designated
by the Board of Directors of such Person as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the date on which the Senior Subordinated Notes
mature.
"Eligible Institution" means (a) the Trustee, (b) an affiliate of the
Trustee or (c) a commercial banking institution that is federally chartered,
has combined capital and surplus in excess of $500 million, conducts banking
operations in the State of New York and whose debt is rated "A" (or higher)
according to Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc.
4
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Senior
Subordinated Notes for Series A Senior Subordinated Notes.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries in existence on the date of this Indenture, until such amounts are
repaid.
"Fixed Charge Coverage Ratio" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person for such period
to the Fixed Charges of such Person for such period. In the event that the
Company or any of its Restricted Subsidiaries incurs, assumes, Guarantees or
redeems any Indebtedness (other than revolving credit borrowings) or issues or
redeems preferred stock subsequent to the commencement of the period for which
the Fixed Charge Coverage Ratio is being calculated but prior to the date on
which the event for which the calculation of the Fixed Charge Coverage Ratio is
made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such incurrence, assumption, Guarantee or
redemption of Indebtedness, or such issuance or redemption of preferred stock,
as if the same had occurred at the beginning of the applicable four-quarter
reference period. In addition, for purposes of making the computation referred
to above, (i) acquisitions that have been made by the Company or any of its
Restricted Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the four-quarter reference
period or subsequent to such reference period and on or prior to the
Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period and Consolidated Cash Flow for such reference
period shall be calculated without giving effect to clause (iii) of the proviso
set forth in the definition of Consolidated Net Income, and (ii) the
Consolidated Cash Flow attributable to discontinued operations (as determined
in accordance with GAAP) and operations or businesses disposed of prior to the
Calculation Date shall be excluded, and (iii) the Fixed Charges attributable to
discontinued operations (as determined in accordance with GAAP) and operations
or businesses disposed of prior to the Calculation Date shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"Fixed Charges" means, with respect to any Person for any period, the
sum, without duplication, of (i) the consolidated interest expense of such
Person and its Restricted Subsidiaries for such period, whether paid or accrued
(including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred
in respect of letter of credit or bankers' acceptance financings, and net
payments (if any) pursuant to Hedging Obligations) and (ii) the consolidated
interest expense of such Person and its Restricted Subsidiaries that was
capitalized during such period and (iii) any interest expense on Indebtedness
of another Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of its
Restricted Subsidiaries (whether or not such Guarantee or Lien is called upon)
and (iv) the product of (a) all dividend payments on any series of preferred
stock of such Person, other than dividend payments on preferred stock of the
Company paid solely in additional shares of such preferred stock times (b) a
fraction, the numerator of which is one and
5
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the date of this Indenture.
"Global Note" means a Senior Subordinated Note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Senior Subordinated Note attached hereto as
Exhibit A.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means any Subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture and
their respective successors and assigns.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest and currency rate swap
agreements, interest rate cap agreements and interest rate collar agreements
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.
"Holder" means a Person in whose name a Senior Subordinated Note is
registered.
"Indebtedness" means, with respect to any Person, (i) any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or bankers' acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP, (ii) all indebtedness of
others secured by a Lien on any asset of such Person (whether or not such
indebtedness is assumed by such Person) in which case the amount of such
Indebtedness shall be deemed to be the lesser of (a) the amount of such
Indebtedness and (b) the fair market value of the asset that secures such
Indebtedness, (iii) Disqualified Stock of such Person, (iv) preferred stock of
any Restricted Subsidiary of such Person (other than Preferred Stock held by
such Person or any of its Wholly Owned Restricted Subsidiaries) and (v) to the
extent not otherwise included, the Guarantee by such Person of any indebtedness
of any other Person.
6
"Indenture" means this Indenture, as amended, modified or supplemented
from time to time, in accordance with the terms hereof.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company or any of its Restricted Subsidiaries for consideration consisting
of common equity securities of the Company or such Restricted Subsidiary shall
not be deemed to be an Investment.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease
in the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement
under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant
to Section 5 of the Registration Rights Agreement.
"Make-Whole Premium" with respect to a Senior Subordinated Note means
an amount equal to the greater of (i) 104.75% of the outstanding principal
amount of such Senior Subordinated Note and (ii) the excess of (a) the present
value of the remaining interest, premium and principal payments due on such
Note as if such Note were redeemed on March 1, 2002, computed using a discount
rate equal to the Treasury Rate plus 50 basis points, over (b) the outstanding
principal amount of such Senior Subordinated Note.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person for such period, determined in accordance with
GAAP and before any reduction in respect of preferred stock dividends,
excluding, however, (i) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection with
(a) any Asset Sale (including, without limitation, dispositions pursuant to
sale and leaseback transactions) or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries and (ii) any
extraordinary or nonrecurring gain (but not loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct
7
costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions), and any
relocation expenses incurred as a result thereof, any taxes paid or payable by
the Company or any of its Restricted Subsidiaries as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and any reserve for adjustment in respect of the sale price of such asset
or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise), (c) or constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Senior Subordinated Notes being offered hereby) of the Company or any of
its Restricted Subsidiaries to declare a default on such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity and (iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or any of
its Restricted Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the
Senior Subordinated Notes in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the sale of the Company's 9 1/2% Series A Senior
Subordinated Notes including the Guarantee thereof, if any, pursuant to the
Purchase Agreement.
"Offering Memorandum" means the offering memorandum of the Company
dated February 24, 1997, with respect to the Series A Subordinated Notes.
"Officer" means, with respect to any Person, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial
Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means (i) any Investment in the Company or in
a Wholly Owned Restricted Subsidiary of the Company; (ii) any Investment in
Cash Equivalents; (iii) any Investment by the Company or any of its Restricted
Subsidiaries in a Person if, as a result of such Investment, (x) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company or (y) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is
8
liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the
Company; (iv) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof; and (v) a $2.6 million loan to Creative Expressions
Group, Inc., as in effect on the date of this Indenture, as such loan may be
amended or refinanced in a manner not adverse to the Company or the Holders of
the Senior Subordinated Notes.
"Permitted Liens" means (i) Liens securing the Senior Debt of the
Company and its Restricted Subsidiaries; (ii) Liens in favor of the Company or
any of its Restricted Subsidiaries; (iii) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any of its Restricted Subsidiaries; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or consolidated
with the Company or any such Restricted Subsidiary; (iv) Liens on property
existing at the time of acquisition thereof by the Company or any of its
Restricted Subsidiaries; provided that such Liens were in existence prior to
the contemplation of such acquisition; (v) Liens to secure the performance of
statutory obligations, surety or appeal bonds, performance bonds or other
obligations of a like nature incurred in the ordinary course of business; (vi)
Liens to secure Indebtedness permitted by clause (iv) (including Capital Lease
Obligations) of the second paragraph of Section 4.09 hereof, covering only the
assets acquired with such Indebtedness; (vii) Liens existing on the date of
this Indenture excluding Liens on Indebtedness to be repaid with the proceeds
of the Offering; (viii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (ix) Liens incurred in the
ordinary course of business of the Company or any of its Restricted
Subsidiaries with respect to obligations that do not exceed $2.0 million at any
one time outstanding and that (a) are not incurred in connection with the
borrowing of money or the obtaining of advances or credit (other than trade
credit in the ordinary course of business) and (b) do not in the aggregate
materially detract from the value of the property or materially impair the use
thereof in the operation of business by the Company or any such Restricted
Subsidiary; (x) renewals or refundings of any Liens referred to in clauses
(iii) through (ix) above; provided that any such renewal or refunding does not
extend to any assets or secure any Indebtedness not securing or secured by the
Liens being renewed or refinanced; and (xi) Liens on assets of Unrestricted
Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries.
"Permitted Refinancing Debt" means any Indebtedness of the Company or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any such Restricted Subsidiary; provided that:
(i) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Debt does not exceed the principal amount (or accreted value, if
applicable) of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Debt has a final
maturity date no earlier than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; (iii) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of payment to
the Senior Subordinated Notes, such Permitted Refinancing Debt has a final
maturity date no earlier than the final maturity date of, and is subordinated
in right of payment to, the Senior Subordinated Notes on terms at least as
favorable to the Holders of Senior Subordinated Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred
9
only by the Company or by the Restricted Subsidiary that is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or agency or political subdivision
thereof (including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Principals" means Xxxxxx Xxxxxx, his lineal descendants, and any
trust, corporation, partnership, limited liability company, association or
other entity in which Xxxxxx Xxxxxx and/or his lineal descendants hold at least
80% of the total, combined outstanding voting power or similar controlling
interest.
"Public Offering" means an underwritten public offering of common
stock (other than Disqualified Stock) of the Company registered under the
Securities Act (other than a public offering registered on Form S-8 under the
Securities Act) that results in net proceeds of at least $35 million of the
Company.
"Purchase Agreement" means the Purchase Agreement, dated as of
February 24, 1997, by and among the Company and the other parties named on the
signature pages thereof, with respect to the Offering.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
the other parties named on the signature pages thereof, as such agreement may
be amended, modified or supplemented from time to time.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Administration department of the Trustee
(or any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of, and familiarity with, the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of such
Person that is not an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" of any Person means (i) any Indebtedness of such Person
incurred under the Bank Credit Facility, (ii) Indebtedness of a Restricted
Subsidiary formed for the sole purpose of engaging in accounts receivable
financings and (iii) any other Indebtedness permitted to be incurred by such
Person under the terms of this Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is subordinated in
right of payment to any Senior Debt of such Person. Notwithstanding anything to
the contrary in the foregoing, Senior Debt will not include (a) any liability
for federal, state, local or other taxes owed or owing by such Person, (b) any
Indebtedness of such
10
Person to any of its Subsidiaries or other Affiliates, (c) any trade payables
or (d) any Indebtedness that is incurred in violation of this Indenture.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Act, as such Regulation is in effect on the
date hereof.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means the Guarantee in substantially the form
attached hereto as Exhibit C, executed by the Guarantors in accordance with
Section 12.01 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
[section][section] 77aaa-77bbbb), as in effect on the date on which this
Indenture is qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are
required to bear the legend set forth in Section 2.06 hereof.
"Treasury Rate" means the yield to maturity at the time of the
computation of United States Treasury securities with a constant maturity (as
compiled by and published in the most recent Federal Reserve Statistical
Release H.15(519)), which has become publicly available at least two Business
Days prior to the date fixed for prepayment (or, if such Statistical Release is
no longer published, any publicly available source of similar market data) most
nearly equal to the then remaining average life of the series of Senior
Subordinated Notes for which a Make-Whole Premium is being calculated;
provided, however, that if the average life of such note is not equal to the
constant maturity of the 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 average life of such Senior Subordinated Notes 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 "Trustee" in the first paragraph of
this Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and, thereafter, means the successor serving
hereunder.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a resolution
of the Board of Directors, but only to the extent that such Subsidiary (a) has
no Indebtedness other than Non-Recourse Debt; (b) is not party to any
agreement, contract, arrangement or understanding with the Company or any of
its Restricted Subsidiaries unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any
11
of its Restricted Subsidiaries has any direct or indirect obligation (x) to
subscribe for additional Equity Interests or (y) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results; (d) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any
of its Restricted Subsidiaries and (e) has at least one member of its Board of
Directors who is not a director or executive officer of the Company or any of
its Restricted Subsidiaries and has at least one executive officer who is not a
director or executive officer of the Company or any of its Restricted
Subsidiaries. Any such designation by the Board of Directors shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions and was permitted by Section 4.07 hereof. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company shall be in
default of such covenant). The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such
Indebtedness is permitted under Section 4.09 hereof and (ii) no Default or
Event of Default would be in existence following such designation.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction".............................. 4.11
"Asset Sale Offer"................................... 4.10
"Change of Control Offer"............................ 3.09
"Change of Control Payment".......................... 4.14
"Change of Control Redemption"....................... 3.07
"Covenant Defeasance"................................ 8.03
"Event of Default"................................... 6.01
"Excess Proceeds".................................... 4.10
"Excess Proceeds Offer Triggering Event"............. 4.10
"incur".............................................. 4.09
"Legal Defeasance" .................................. 8.02
"Offer Amount"....................................... 3.09
"Offer Period"....................................... 3.09
12
"Paying Agent"....................................... 2.03
"Payment Default".................................... 6.01
"Purchase Date"...................................... 3.09
"Registrar".......................................... 2.03
"Repurchase Offer"................................... 3.09
"Restricted Payments"................................ 4.07
"Subsidiary Guarantee"............................... 12.01
"Supplemental Indenture"............................. 12.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Senior Subordinated Notes;
"indenture security holder" means a Holder of a Senior Subordinated
Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Senior Subordinated Notes means the Company, a
Guarantor, if any, on the Senior Subordinated Notes as provided for under
Section 12.01 hereof and any successor obligor upon the Senior Subordinated
Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
13
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
ARTICLE 2
THE SENIOR SUBORDINATED NOTES
SECTION 2.01. FORM AND DATING.
The Senior Subordinated Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Senior Subordinated Notes may have notations, legends or endorsements required
by law, stock exchange rules or usage. Each Senior Subordinated Note shall be
dated the date of its authentication. The Senior Subordinated Notes shall be
issued initially in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Subordinated Notes
shall constitute, and are hereby expressly made, a part of this Indenture and
the Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Senior Subordinated Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the text referred to in
footnotes 1 and 2 thereto). Senior Subordinated Notes issued in definitive form
shall be substantially in the form of Exhibit A attached hereto (but without
including the text referred to in footnotes 1 and 2 thereto). Each Global Note
shall represent such of the outstanding Senior Subordinated Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
principal amount of outstanding Senior Subordinated Notes from time to time
endorsed thereon and that the aggregate principal amount of outstanding Senior
Subordinated Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Senior Subordinated Notes represented thereby
shall be made by the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Senior Subordinated Notes for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on the
Senior Subordinated Notes and may be in facsimile form.
If an Officer whose signature is on a Senior Subordinated Note no
longer holds that office at the time a Senior Subordinated Note is
authenticated, the Senior Subordinated Note shall nevertheless be valid.
A Senior Subordinated Note shall not be valid until authenticated by
the manual signature of the Trustee. The signature shall be conclusive evidence
that the Senior Subordinated Note has been authenticated under this Indenture.
The form of the Trustee's certificate of authentication to be borne by the
Senior Subordinated Notes shall be substantially as set forth in Exhibit A
attached hereto.
The Trustee shall, upon a written order of the Company signed by an
Officer and delivered to the Trustee, authenticate Senior Subordinated Notes
for original issue up to the aggregate principal
14
amount stated in paragraph 4 of the Senior Subordinated Notes. The aggregate
principal amount of Senior Subordinated Notes outstanding at any time may not
exceed such amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Senior Subordinated Notes. An authenticating agent may
authenticate Senior Subordinated Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Senior
Subordinated Notes may be presented for registration of transfer or for
exchange ("Registrar") and an office or agency where Senior Subordinated Notes
may be presented for payment ("Paying Agent"). The Registrar shall keep a
register of the Senior Subordinated Notes, the names and addresses of the
Holders and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar. The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which shall incorporate
the provisions of the TIA. Such 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 such Agent. If the Company fails to maintain a
Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee
shall act as such, and shall be entitled to appropriate compensation in
accordance with Section 7.07 hereof.
The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of, interest on Liquidated Damages, if any, or other premiums, if
any, on the Senior Subordinated Notes, and such Paying Agent will notify the
Trustee of any default by the Company in making any such payment. At any time
during the continuance of any such default, the Trustee may require a Paying
Agent to pay all money held by it as Paying Agent to the Trustee and account
for any funds disbursed. The Company, at any time, may require a Paying Agent
to pay all money held by it as Paying Agent to the Trustee and account for any
funds disbursed. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money
delivered to the Trustee. If the Company or a Subsidiary acts as Paying Agent,
it shall segregate and hold in a separate trust fund for the benefit of the
Holders all money held by it as
15
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Senior Subordinated
Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA [section] 312(a). If the
Trustee is not the Registrar, the Company shall furnish to the Trustee, at
least seven Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Senior Subordinated Notes, including the aggregate principal amount
of Senior Subordinated Notes held by each thereof, and the Company shall
otherwise comply with TIA [section] 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes
are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal
amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his
attorney-in-fact, duly authorized in writing; and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Security, such request shall be accompanied by
the following additional information and documents, as
applicable:
(A) if such Transfer Restricted Security is being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification to that effect from such
Holder (in substantially the form of Exhibit B
attached hereto); or
(B) if such Transfer Restricted Security is being
transferred (1) to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act)
in accordance with Rule 144A under the Securities
Act, (2) pursuant to an exemption from registration
in accordance with Rule 144 or Rule 904 under the
Securities Act (and based upon an Opinion of Counsel
if the Company or the Trustee so request) or (3)
pursuant to an effective registration statement
under the Securities Act, a certification to that
effect from such Holder (in substantially the form
of Exhibit B attached hereto); or
16
(C) if such Transfer Restricted Security is being
transferred in reliance on another exemption from
the registration requirements of the Securities Act,
a certification to that effect from such Holder (in
substantially the form of Exhibit B attached hereto)
and an Opinion of Counsel from such Holder or the
transferee reasonably acceptable to the Company and
to the Registrar to the effect that such transfer is
in compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest
in a Global Note except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted Security, a
certification from the Holder thereof (in substantially the form
of Exhibit B attached hereto) to the effect that such Definitive
Note is being transferred by such Holder either (x) to a
"qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the
Securities Act or (y) based upon an Opinion of Counsel from such
Holder to the transferee reasonably acceptable to the Company
and to the Registrar, pursuant to another exemption from the
registration requirements of the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions from the Holder thereof directing
the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the
aggregate principal amount of the Senior Subordinated Notes
represented by the Global Note,
in which case the Trustee shall cancel such Definitive Note in accordance with
Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depositary and the Note Custodian, the aggregate principal amount of Senior
Subordinated Notes represented by the Global Note to be increased accordingly.
If no Global Notes are then outstanding, the Company shall issue and, upon
receipt of an authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate and make available for delivery to the Note
Custodian a new Global Note in the appropriate aggregate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through the
Depositary, in accordance with this Indenture and the procedures of the
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or
such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any
Person having a beneficial interest in a Global Note, and, in
the case of a Transfer Restricted Security, the following
additional information and documents (all of which may be
submitted by facsimile):
17
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the beneficial
owner, a certification to that effect from such Person (in
substantially the form of Exhibit B attached hereto); or
(B) if such beneficial interest is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A under
the Securities Act, (2) pursuant to an exemption from
registration in accordance with Rule 144 or Rule 904 under
the Securities Act (and based on an Opinion of Counsel if
the Company or the Trustee so request) or (3) pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit B attached hereto); or
(C) if such beneficial interest is being transferred in reliance
on another exemption from the registration requirements of
the Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B attached
hereto) and 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,
in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depositary and the Note Custodian, cause the aggregate
principal amount of Global Notes to be reduced accordingly and, following such
reduction, the Company shall execute and, upon receipt of an authentication
order in accordance with Section 2.02 hereof, the Trustee shall authenticate
and deliver to the transferee a Definitive Note in the appropriate principal
amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in
a Global Note pursuant to this Section 2.06(d) shall be
registered in such names and in such authorized denominations as
the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.
The Trustee shall deliver such Definitive Notes to the Persons
in whose names such Senior Subordinated Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global Note may
not be transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
(f) Authentication of Definitive Notes in Absence of Depositary. If at
any time:
(i) the Depositary for the Senior Subordinated Notes notifies the
Company that the Depositary is unwilling or unable to continue
as Depositary for the Global Notes and a successor Depositary
for the Global Notes is not appointed by the Company within 90
days after delivery of such notice; or
(ii) the Company, at its sole discretion elects to cause the issuance
of Definitive Notes under this Indenture,
18
then (1) the Company shall so notify the Trustee in writing, (2) the Trustee
shall cause the Note Custodian to deliver the Global Note held by the
Depositary to the Trustee and upon receipt thereof shall cancel such Global
Notes and (3) the Company shall issue, and the Trustee shall, upon receipt of
an authentication order in accordance with Section 2.02 hereof, authenticate
and deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of such Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii) and
(iii), each Senior Subordinated Note certificate evidencing
Global Notes and Definitive Notes (and all Senior
Subordinated Notes issued in exchange therefor or
substitution thereof) shall bear legends in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
ISSUER SO REQUESTS), (2) TO THE ISSUERS OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a
Global Note) pursuant to Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Security that is
a Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security
for a Definitive Note that does not bear the legend set
forth in (i) above
19
and rescind any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted
Security shall not be required to bear the legend set
forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(c) hereof; provided,
however, that with respect to any request for an
exchange of a Transfer Restricted Security that is
represented by a Global Note for a Definitive Note that
does not bear the legend set forth in (i) above, 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 of Exhibit
B attached hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt
of an authentication order in accordance with Section 2.02
hereof, the Trustee shall authenticate, Series B Senior
Subordinated Notes in exchange for Series A Senior
Subordinated Notes accepted for exchange in the Exchange
Offer, which Series B Senior Subordinated Notes shall not
bear the legend set forth in (i) above, and the Registrar
shall rescind any restriction on the transfer of such
Senior Subordinated Notes, in each case unless the Holder
of such Series A Senior Subordinated Notes is either (A) a
broker-dealer who purchased such Series A Senior
Subordinated Notes directly from the Company to resell
pursuant to Rule 144A or any other available exemption
under the Securities Act, (B) a Person participating in the
distribution of the Series A Senior Subordinated Notes or
(C) a Person who is an affiliate (as defined in Rule 144)
of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned
to or retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial interest in a
Global Note is exchanged for Definitive Notes, redeemed, repurchased or
cancelled, the principal amount of Senior Subordinated Notes represented by
such Global Note shall be reduced accordingly and an endorsement shall be made
on such Global Note, by the Trustee or the Note Custodian, at the direction of
the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(A) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall
authenticate Definitive Notes and Global Notes at the
Registrar's request.
(B) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in
connection therewith (other than any such transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10,
4.14 and 9.05 hereof).
(C) Neither the Company nor the Registrar shall be
required to register the transfer of or exchange any
Senior Subordinated Note selected for redemption in
whole or in part,
20
except the unredeemed portion of any Senior
Subordinated Note being redeemed in part.
(D) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive
Notes or Global Notes shall be the valid obligations
of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the
Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(E) The Company shall not be required:
(x) to issue, to register the transfer of, or to
exchange Senior Subordinated Notes during a period
beginning at the opening of business 15 days
before the day of any selection of Senior
Subordinated Notes for redemption under Section
3.02 hereof and ending at the close of business on
the day of selection; or
(y) to register the transfer of, or to exchange any
Senior Subordinated Note so selected for
redemption in whole or in part, except the
unredeemed portion of any Senior Subordinated Note
being redeemed in part; or
(z) to register the transfer of, or to exchange a
Senior Subordinated Note between a record date and
the next succeeding interest payment date.
(F) Prior to due presentment for the registration of a
transfer of any Senior Subordinated Note, the Trustee,
any Agent and the Company may deem and treat the
Person in whose name any Senior Subordinated Note is
registered as the absolute owner of such Senior
Subordinated Note for the purpose of receiving payment
of principal of and interest on such Senior
Subordinated Notes, and none of the Trustee, any Agent
or the Company will be affected by notice to the
contrary.
(G) The Trustee shall authenticate Definitive Notes and
Global Notes in accordance with the provisions of
Section 2.02 hereof.
SECTION 2.07. REPLACEMENT SENIOR SUBORDINATED NOTES.
If any mutilated Senior Subordinated Note is surrendered to the
Trustee, or the Company and the Trustee receives evidence to their satisfaction
of the destruction, loss or theft of any Senior Subordinated Note, the Company
shall issue and the Trustee, upon the written order of the Company signed by
two Officers of the Company, shall authenticate a replacement Senior
Subordinated Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that
is sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Senior Subordinated Note is replaced. The Company
may charge for its expenses in replacing a Senior Subordinated Note.
21
Every replacement Senior Subordinated Note is an additional obligation
of the Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Senior Subordinated Notes duly
issued hereunder.
SECTION 2.08. OUTSTANDING SENIOR SUBORDINATED NOTES.
The Senior Subordinated Notes outstanding at any time are all the
Senior Subordinated Notes authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, those reductions in
the interest in a Global Note effected by the Trustee in accordance with the
provisions hereof, and those described in this Section as not outstanding.
Except as set forth in Section 2.09 hereof, a Senior Subordinated Note does not
cease to be outstanding because the Company or an Affiliate of the Company
holds the Senior Subordinated Note.
If a Senior Subordinated Note is replaced pursuant to Section 2.07
hereof, it ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Senior Subordinated Note is held by a bona
fide purchaser.
If the principal amount of any Senior Subordinated Note is considered
paid under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Senior Subordinated Notes payable on that date, then on and
after that date such Senior Subordinated Notes shall be deemed to be no longer
outstanding and shall cease to accrue interest.
Upon a "legal defeasance" pursuant to Article 8 hereof, the Senior
Subordinated Notes shall be deemed to be outstanding to the extent provided in
the applicable section of Article 8 hereof.
SECTION 2.09. TREASURY SENIOR SUBORDINATED NOTES.
In determining whether the Holders of the required principal amount of
Senior Subordinated Notes have concurred in any direction, waiver or consent,
Senior Subordinated Notes owned by the Company, or by any Affiliate of the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Senior Subordinated Notes that the
Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SENIOR SUBORDINATED NOTES.
Until definitive Senior Subordinated Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Senior
Subordinated Notes upon a written order of the Company signed by an Officer
thereof. Temporary Senior Subordinated Notes shall be substantially in the form
of definitive Senior Subordinated Notes but may have variations that the
Company considers appropriate for temporary Senior Subordinated Notes and as
shall be reasonably acceptable to the Trustee. Without unreasonable delay, the
Company shall prepare, and the Trustee shall authenticate definitive Senior
Subordinated Notes in exchange for temporary Senior Subordinated Notes. Until
such exchange, Holders of temporary Senior Subordinated Notes shall be entitled
to all of the benefits of this Indenture.
SECTION 2.11. CANCELLATION.
22
The Company at any time may deliver Senior Subordinated Notes to the
Trustee for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Senior Subordinated Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Senior Subordinated Notes surrendered for registration of transfer, exchange,
payment, replacement or cancellation and shall destroy cancelled Senior
Subordinated Notes (subject to the record retention requirements of the
Exchange Act). The Company may not issue new Senior Subordinated Notes to
replace Senior Subordinated Notes that it has paid or that have been delivered
to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Senior
Subordinated Notes, it shall pay the defaulted interest specified in Section
4.01 hereof in any lawful manner plus, to the extent lawful, interest payable
on the defaulted interest, to the Persons who are Holders on a subsequent
special record date, in each case at the rate provided in the Senior
Subordinated Notes and in Section 4.01 hereof. The Company shall notify the
Trustee in writing of the amount of defaulted interest proposed to be paid on
each Senior Subordinated Note and the date of the proposed payment. The Company
shall fix or cause to be fixed each such special record date and payment date,
provided that no such special record date shall be less than 10 days prior to
the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
SECTION 2.13. CUSIP NUMBER.
The Company in issuing the Senior Subordinated Notes 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 that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Senior Subordinated Notes or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Senior Subordinated Notes, 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 AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company is required to make an offer to repurchase Senior
Subordinated Notes pursuant to the provisions of Section 3.09, 4.10 or 4.14
hereof, it shall furnish to the Trustee at least 45 days but not more than 60
days before a repurchase date, an Officers' Certificate setting forth (i) the
Section of this Indenture pursuant to which the repurchase shall occur, (ii)
the repurchase date, (iii) the maximum principal amount of Senior Subordinated
Notes to be repurchased together with CUSIP numbers, (iv) the repurchase price
and (v) further setting forth a statement to the effect that (a) an Excess
Proceeds Offer Triggering Event has occurred and the conditions set forth in
Section 4.10 have been satisfied or (b) a Change of Control has occurred and
the conditions set forth in Section 4.14 have been satisfied.
23
SECTION 3.02. SELECTION OF SENIOR SUBORDINATED NOTES TO BE REDEEMED.
If less than all of the Senior Subordinated Notes are to be redeemed
at any time, selection of Senior Subordinated Notes for redemption will be made
by the Trustee in compliance with the requirements of the principal national
securities exchange, if any, on which the Senior Subordinated Notes are listed,
or, if the Senior Subordinated Notes are not so listed, on a pro rata basis, by
lot or by such method as the Trustee shall deem fair and appropriate; provided
that no Senior Subordinated Notes of $1,000 or less shall be redeemed in part.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each Holder of Senior
Subordinated Notes to be redeemed at its registered address. If any Senior
Subordinated Note is to be redeemed in part only, the notice of redemption that
relates to such Senior Subordinated Note shall state the portion of the
principal amount thereof to be redeemed. A new Senior Subordinated Note in
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Senior
Subordinated Note. On and after the redemption date, interest shall cease to
accrue on Senior Subordinated Notes or portions thereof called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed, by first class mail, a notice of
redemption to each Holder whose Senior Subordinated Notes are to be redeemed at
its registered address.
The notice shall identify the Senior Subordinated Notes to be redeemed
and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Senior Subordinated Note is being redeemed in part, the
portion of the principal amount of such Senior Subordinated Note to be
redeemed and that, after the redemption date upon surrender of such Senior
Subordinated Note, a new Senior Subordinated Note or Senior Subordinated
Notes in principal amount equal to the unredeemed portion shall be issued
upon cancellation of the original Senior Subordinated Note;
(d) the name and address of the Paying Agent;
(e) that Senior Subordinated Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Senior Subordinated Notes or portions thereof called
for redemption ceases to accrue on and after the redemption date;
(g) the paragraph of the Senior Subordinated Notes and Section of this
Indenture pursuant to which the Senior Subordinated Notes called for
redemption are being redeemed; and
(h) 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 Senior
Subordinated Notes.
24
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 10 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and that the text of such notice shall be prepared or approved by the
Company.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Senior Subordinated Notes or portions thereof called for redemption
become irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
By 10:00 am on the redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money, in same-day funds, sufficient to pay
the redemption price of and accrued interest on and Liquidated Damages, if any,
and other premiums, if any, on all Senior Subordinated Notes to be redeemed on
that date. The Trustee or the Paying Agent shall promptly return to the Company
any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption price of, and accrued
interest on and Liquidated Damages, if any, and any other premiums, if any, on
all Senior Subordinated Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, whether or not such Senior
Subordinated Notes are presented for payment, interest shall cease to accrue on
the Senior Subordinated Notes or the portions of Senior Subordinated Notes
called for redemption. If a Senior Subordinated Note is redeemed on or after an
interest record date but on or prior to the related interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Senior Subordinated Note was registered at the close of business on such record
date. If any Senior Subordinated Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and to the
extent lawful on any interest not paid on such unpaid principal, in each case
at the rate provided in the Senior Subordinated Notes and in Section 4.01
hereof.
SECTION 3.06. SENIOR SUBORDINATED NOTES REDEEMED IN PART.
Upon surrender of a Senior Subordinated Note that is redeemed in part,
the Company shall issue and, upon the Company's written request, the Trustee
shall authenticate for the Holder at the expense of the Company, a new Senior
Subordinated Note equal in principal amount to the unredeemed portion of the
Senior Subordinated Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this Section 3.07,
the Senior Subordinated Notes will not be redeemable at the Company's option
prior to March 1, 2002. Thereafter, the Senior Subordinated Notes will be
subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on March
1 of the years indicated below:
25
YEAR PERCENTAGE
2002.....................................................104.750%
2003.....................................................103.166%
2004.....................................................101.583%
2005 and thereafter......................................100.0%
(b) Notwithstanding the foregoing, at any time prior to March 1, 2000,
the Company may redeem up to one-third in aggregate principal amount of Senior
Subordinated Notes at a redemption price of 109.5% of the principal amount
thereof, in each case plus accrued and unpaid interest and Liquidated Damages,
if any, to the redemption date, with the net proceeds of a Public Offering of
Common Stock of the Company; provided that at least two-thirds in aggregate
principal amount of the Senior Subordinated Notes originally issued under this
Indenture remain outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 60
days following the date of the closing of such Public Offering.
(c) Upon the occurrence of a Change of Control prior to March 1, 2002,
the Company, at its option, may redeem all, but not less than all, of the
outstanding Senior Subordinated Notes at a redemption price equal to 100% of
the principal amount thereof plus the applicable Make-Whole Premium (a "Change
of Control Redemption"). The Company shall give not less than 30 nor more than
60 days' notice of such redemption within 30 days following a Change of
Control.
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.14 hereof, the Company
shall not be required to make mandatory redemption, purchase, or sinking fund
payments with respect to the Senior Subordinated Notes.
SECTION 3.09. REPURCHASE OFFERS.
In the event that the Company shall be required to commence an offer
to all Holders to repurchase Senior Subordinated Notes (a "Repurchase Offer")
pursuant to Section 4.10 hereof (an "Asset Sale Offer"), or pursuant to Section
4.14 hereof (a "Change of Control Offer") the Company shall follow the
procedures specified below.
A Repurchase Offer shall commence no later than 10 Business Days after
a Change of Control (unless the Company is not required to make such offer
pursuant to Section 4.14(c) hereof) or an Excess Proceeds Offer Triggering
Event, as the case may be, and remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than 5
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Senior Subordinated Notes
required to be purchased pursuant to Section 4.10 hereof, in the case of an
Excess Proceeds Offer, or 4.14 hereof, in the case of a Change of Control Offer
(the "Offer Amount") or, if less than the Offer Amount has been tendered, all
Senior Subordinated Notes tendered in response to the Repurchase Offer. Payment
for any Senior Subordinated Notes so purchased shall be made in the same manner
as interest payments are made.
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If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest shall
be paid to the Person in whose name a Senior Subordinated Note is registered at
the close of business on such record date, and no additional interest shall be
payable to Holders who tender Senior Subordinated Notes pursuant to the
Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Senior Subordinated Notes pursuant
to such Repurchase Offer. The Repurchase Offer shall be made to all Holders.
The notice, which shall govern the terms of the Repurchase Offer, shall
describe the transaction or transactions that constitute the Change of Control
or Excess Proceeds Offer Triggering Event (as defined below), as the case may
be and shall state:
(a) that the Repurchase Offer is being made pursuant to this Section
3.09 and Section 4.10 or 4.14 hereof, as the case may be, and the length of
time the Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Senior Subordinated Note not tendered or accepted for
payment shall continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Senior Subordinated Note accepted for payment pursuant to the Repurchase
Offer shall cease to accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Senior Subordinated Note purchased
pursuant to a Repurchase Offer may elect to have all or any portion of such
Senior Subordinated Note purchased;
(f) that Holders electing to have a Senior Subordinated Note purchased
pursuant to any Repurchase Offer shall be required to surrender the Senior
Subordinated Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Senior Subordinated Note, or such other
customary documents of surrender and transfer as the Company may reasonably
request, duly completed, or transfer by book-entry transfer, to the
Company, the Depositary, or the Paying Agent at the address specified in
the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Senior Subordinated Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Senior Subordinated Note purchased;
(h) that, if the aggregate principal amount of Senior Subordinated
Notes surrendered by Holders exceeds the Offer Amount, the Company shall
select the Senior Subordinated Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Company so that
only Senior Subordinated Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
27
(i) that Holders whose Senior Subordinated Notes were purchased only
in part shall be issued new Senior Subordinated Notes equal in principal
amount to the unpurchased portion of the Senior Subordinated Notes
surrendered (or transferred by book-entry transfer).
On (or at the Company's election, before) the Purchase Date, the
Company shall, to the extent lawful, accept for payment, on a pro rata basis to
the extent necessary, the Offer Amount of Senior Subordinated Notes or portions
thereof tendered pursuant to the Repurchase Offer and not theretofore
withdrawn, or if less than the Offer Amount has been tendered, all Senior
Subordinated Notes tendered, and shall deliver to the Trustee an Officers'
Certificate stating that such Senior Subordinated Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this
Section 3.09. The Company, the Depositary or the Paying Agent, as the case may
be, shall promptly (but in any case not later than 5 days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Senior Subordinated Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Senior
Subordinated Note, and the Trustee, upon written request from the Company shall
authenticate and mail or deliver such new Senior Subordinated Note to such
Holder, in a principal amount equal to any unpurchased portion of the Senior
Subordinated Note surrendered. Any Senior Subordinated Note not so accepted
shall be promptly mailed or delivered by the Company to the Holder thereof. All
Senior Subordinated Notes or portions thereof purchased pursuant to the
Repurchase Offer will be cancelled by the Trustee. The Company shall publicly
announce the results of the Repurchase Offer on or as soon as practicable after
the Purchase Date, but in no case more than 5 Business Days after the Purchase
Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SENIOR SUBORDINATED NOTES.
The Company shall pay or cause to be paid the principal of, interest
on, and other premiums, if any, on the Senior Subordinated Notes on the dates
and in the manner provided in the Senior Subordinated Notes. Principal,
premium, if any, and interest shall be considered paid on the applicable date
due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest then due. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 2% per annum in excess of the then applicable interest rate on the Senior
Subordinated Notes to the extent lawful; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages, if any, or other premiums, if
any, at the same rate to the extent lawful.
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SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency (which may be an
office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Senior Subordinated Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Senior Subordinated Notes and this Indenture
may be served. The Company shall give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Senior Subordinated Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall
in any manner relieve the Company of its obligation to maintain an office or
agency for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
SECTION 4.03. REPORTS.
(a) Whether or not required by the rules and regulations of the SEC,
so long as any Senior Subordinated Notes are outstanding, the Company shall
furnish to the Holders of Senior Subordinated Notes (i) all quarterly and
annual financial information that would be required to be contained in a filing
with the SEC on Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" that describes the financial condition and results
of operations of the Company and its Restricted Subsidiaries and, with respect
to the annual information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports. In addition, whether or not required by the rules and regulations of
the SEC, the Company shall file a copy of all such information and reports with
the SEC for public availability (unless the SEC will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request. The Company shall at all times comply with TIA
[section] 3.14(a). Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(b) For so long as any Senior Subordinated Notes remain outstanding,
the Company shall furnish to the Holders and to securities analysts and
prospective investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATE.
(a) The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Subsidiaries during
29
the preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, whether to the best
of his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and whether any Default or
Event of Default shall have occurred under this Indenture (and, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of
Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, Liquidated Damages, if
any, and other premiums, if any, on the Senior Subordinated Notes is prohibited
or if such event has occurred, a description of the event and what action the
Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by
a written statement of the Company's independent public accountants (who shall
be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article Four or Article Five hereof or, if any such violation
has occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Senior Subordinated Notes
are outstanding, deliver to the Trustee, forthwith upon any Officer becoming
aware of any Default or Event of Default (and, in any event, no later than five
days after such Officer shall become aware of the occurrence of any Event of
Default or an event which, with notice or the lapse of time or both, would
constitute an Event of Default), an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes
to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to
pay, prior to delinquency, all material taxes, assessments, and governmental
levies except such as are contested in good faith and by appropriate
proceedings.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it shall not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it shall not, by resort to any such law, hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
has been enacted.
30
SECTION 4.07. RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or
make any other payment or distribution on account of the Company's or any of
its Restricted Subsidiaries' Equity Interests (including, without limitation,
any payment in connection with any merger or consolidation involving the
Company) or to any direct or indirect holder of the Company's Equity Interests
in its capacity as such other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly Owned Restricted Subsidiary
of the Company; (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any Subsidiary or other Affiliate of the
Company, other than any such Equity Interests owned by the Company or any
Wholly Owned Restricted Subsidiary of the Company; (iii) make any principal
payment on, or purchase, redeem, defease or otherwise acquire or retire for
value, prior to a scheduled mandatory sinking fund payment date or final
maturity date, any Indebtedness that is subordinated to the Senior Subordinated
Notes; or (iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (i) through (iv) above being collectively referred
to as "Restricted Payments"), unless, at the time of and after giving effect to
such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such Restricted Payment, to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof; and
(c) such Restricted Payment, together with the aggregate of all other
Restricted Payments made by the Company and its Restricted Subsidiaries on
or after the date of this Indenture, is less than the sum of (1) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from February 1, 1997 to the end of the Company's most
recently ended fiscal quarter for which financial statements are available
at the time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus (2) 100% of
the aggregate net cash proceeds received by the Company as capital
contributions or from the issue or sale since the date of this Indenture of
Equity Interests of the Company or of debt securities of the Company that
have been converted into such Equity Interests (other than Equity Interests
(or convertible debt securities) sold to a Subsidiary of the Company and
other than Disqualified Stock or debt securities that have been converted
into Disqualified Stock), plus (3) to the extent that any Restricted
Investment is sold for cash or otherwise liquidated or repaid for cash,
100% of the net cash proceeds thereof (less the cost of disposition but
only to the extent not included in subclause (1) of this clause (c)).
The foregoing provisions will not apply to the following transactions:
(i) the payments and applications of the proceeds to be received by
the Company from the issuance of the Senior Subordinated Notes and as described
under "Use of Proceeds" in the Offering Memorandum; (ii) the repurchase,
redemption or other acquisition or retirement for value of any Equity Interests
held by any member of the Company's (or any of its Restricted Subsidiaries')
management
31
pursuant to any management equity subscription agreement, stock option or
similar employee incentive arrangement; provided that the aggregate price paid
for all such repurchased, redeemed, acquired or retired Equity Interests shall
not exceed $1.0 million in any twelve-month period plus the aggregate cash
proceeds received by the Company (or any of its Restricted Subsidiaries) during
any such twelve-month period from any issuance of Equity Interests by the
Company (or any of its Restricted Subsidiaries) to members of management of the
Company (or any of its Restricted Subsidiaries) (provided, that such proceeds
are excluded from clause (c) of the preceding paragraph); and provided,
further, that such repurchase, redemption or other acquisition or retirement
may not include any Equity Interests owned, directly or indirectly, by the
Principals; (iii) the payment of any dividend or distribution within 60 days
after the date of declaration thereof, if at said date of declaration such
payment would have complied with the provisions of this Indenture; (iv) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
of the Company in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company) of other Equity
Interests of the Company (other than any Disqualified Stock); provided that the
amount of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition shall be excluded from clause (c)
of the preceding paragraph; (v) the defeasance, redemption or repurchase of
subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted Refinancing Debt or the substantially concurrent sale (other than to
a Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement or other
acquisition shall be excluded from clause (c) of the preceding paragraph;
provided further, that no Default or Event of Default shall have occurred and
be continuing immediately after such transaction.
The Board of Directors may designate any Restricted Subsidiary to be
an Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated will be deemed to be Restricted Payments at the
time of such designation and will reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount equal to the
greatest of (i) the net book value of such Investments at the time of such
designation, (ii) the fair market value of such Investments at the time of such
designation and (iii) the original fair market value of such Investments at the
time they were made. Such designation will only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to the Restricted Payment. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.07 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions
to the
32
Company or any of its Restricted Subsidiaries on its (1) Capital Stock or (2)
with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the Company or any of
its Restricted Subsidiaries or (iii) transfer any of its properties or assets
to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (a) Existing
Indebtedness as in effect on the date of this Indenture, (b) the Bank Credit
Facility as in effect as of the date of this Indenture, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Bank Credit
Facility in effect on the date of this Indenture, (c) this Indenture and the
Senior Subordinated Notes, (d) applicable law, (e) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, (f) by reason
of customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices, (g) purchase money
obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired and (h) restrictions relating to a Restricted Subsidiary
formed for the sole purpose of engaging in accounts receivable financing.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become directly or indirectly liable, contingently or otherwise, with respect
to (collectively, "incur") any Indebtedness (including Acquired Debt);
provided, however, that, so long as no Default or Event of Default has occurred
and is continuing, the Company and its Restricted Subsidiaries may incur
Indebtedness (including Acquired Debt) if the Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal quarters for which financial
statements are available immediately preceding the date on which such
additional Indebtedness is incurred would have been at least 2.0 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred at the
beginning of such four-quarter period.
The foregoing provisions will not apply to:
(i) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness pursuant to the Bank Credit Facility in an aggregate principal
amount not to exceed $50.0 million at any one time outstanding less any Net
Proceeds of Asset Sales applied to permanently reduce the Bank Credit Facility
pursuant to the provisions described in Section 4.10;
(ii) the incurrence by the Company and its Restricted Subsidiaries of
the Existing Indebtedness;
(iii) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Senior Subordinated Notes and the Guarantees
thereof by any Restricted Subsidiaries pursuant to the provisions in Section
12.01 hereof;
33
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the Company
or such Restricted Subsidiary, in an aggregate principal amount not to exceed
$5.0 million at any time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness in connection with the acquisition of assets or a
new Restricted Subsidiary; provided that such Indebtedness was incurred by the
prior owner of such assets or such Restricted Subsidiary prior to such
acquisition by the Company or one of its Restricted Subsidiaries and was not
incurred in connection with, or in contemplation of, such acquisition by the
Company or one of it Restricted Subsidiaries; and provided further that the
principal amount (or accreted value, as applicable) of such Indebtedness,
together with any other outstanding Indebtedness incurred pursuant to this
clause (v), does not exceed $5.0 million;
(vi) the incurrence of intercompany Indebtedness between or among the
Company and any of its Wholly Owned Restricted Subsidiaries; provided, that any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Wholly Owned
Restricted Subsidiary of the Company or any sale or other transfer of any such
Indebtedness to a Person that is neither the Company, or a Wholly Owned
Restricted Subsidiary of the Company, shall be deemed to constitute an
incurrence of such Indebtedness by the Company or such Restricted Subsidiary,
as the case may be;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Debt in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund
Indebtedness that was permitted by this Indenture to be incurred;
(viii) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt; provided, that if, and to the extent any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall
be deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of the Company.
(ix) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing
or hedging interest rate risk with respect to any floating rate indebtedness
that is permitted by the terms of this Indenture to be outstanding; and
(x) the incurrence by the Company and its Restricted Subsidiaries of
additional Indebtedness in an aggregate amount not to exceed $7.5 million at
any time outstanding.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in an Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time
of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (ii) at least 85% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash;
provided that the amount of (a) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet), of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Senior Subordinated Notes) that are
assumed by the
34
transferee of any such assets pursuant to a customary novation agreement that
releases the Company or such Restricted Subsidiary from further liability and
(b) any notes or other obligations received by the Company or such Restricted
Subsidiary from such transferee that are immediately converted by the Company
or such Restricted Subsidiary into cash (to the extent of the cash received)
shall be deemed to be cash for purposes of this provision.
Within 270 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or such Restricted Subsidiary may apply such Net Proceeds (i)
to permanently reduce Senior Debt of the Company or such Restricted Subsidiary
(and to correspondingly reduce commitments with respect thereto), or (ii) to
make capital expenditures or acquire long-term assets in the same line of
business as the Company was engaged in immediately prior to such Asset Sale or,
in the case of a sale of accounts receivable in connection with any accounts
receivable financing, for working capital purposes. Pending the final
application of any such Net Proceeds, the Company may temporarily reduce Senior
Debt or otherwise invest such Net Proceeds in any manner that is not prohibited
by this Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $5.0 million (an "Excess Proceeds Offer Triggering Event"), the Company
shall make an offer to all Holders of Senior Subordinated Notes (an "Asset Sale
Offer") to purchase the maximum principal amount of Senior Subordinated Notes
that may be purchased out of the Excess Proceeds, at an offer price in cash in
an amount equal to 100% of the principal amount thereof plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of purchase, in
accordance with the procedures set forth in Section 3.09 hereof and this
Section 4.10. To the extent that the aggregate amount of Senior Subordinated
Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes (subject to the restrictions of this Indenture). If the
aggregate principal amount of Senior Subordinated Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Senior Subordinated Notes to be purchased on a pro rata basis. Upon completion
of such offer to purchase, the amount of Excess Proceeds shall be reset at
zero. The occurrence of an Excess Proceeds Offer Triggering Event could result
in a default under the Senior Debt of the Company.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction with an unrelated Person and (ii) the
Company delivers to the Trustee (a) with respect to any Affiliate Transaction
or series of related Affiliate Transactions involving aggregate consideration
in excess of $1.0 million, a resolution of the Board of Directors set forth in
an Officers' Certificate certifying that such Affiliate Transaction complies
with clause (i) above and that such Affiliate Transaction has been approved by
a majority of the disinterested members of the Board of Directors and (b) with
respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an investment banking firm of national
standing with total assets in excess of $1.0 billion, except with respect to
transactions in the ordinary course of business and consistent with past
practice between the Company or any of its Restricted Subsidiaries and Four M
Corporation, Creative Expressions Group, Inc. or any of their respective
subsidiaries; provided that (1)
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the Indenture of Lease dated as of January 1, 1995, between Xxxxxx Xxxxxx, as
landlord, and the Company, as tenant, relating to the Company's Jacksonville,
Florida facility located in Xxxxx County, Florida, viz., (x) Parcel A: Gov't
lot 2, [section]13, Township 2 south, Range 25 East and (y) Parcel B: Easement
created as per Easement Agreement, dated August 29, 1979, the portion of which
is found at Gov't xxx 0, [xxxxxxx]00, Xxxxxxxx 0 Xxxxx, Xxxxx 25 east) except
for any purchases of property by the Company that may arise thereunder; (2) any
employment agreement entered into between any Person and the Company or any of
its Restricted Subsidiaries in the ordinary course of business and consistent
with the past practice of the Company or such Restricted Subsidiary in an
amount not to exceed $500,000 per annum; (3) transactions between or among the
Company and its Restricted Subsidiaries and (4) Restricted Payments and
Permitted Investments that are permitted by Section 4.07 of this Indenture in
each case shall not be deemed Affiliate Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom, or assign or convey any right to receive income therefrom,
except Permitted Liens.
SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect (i) its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective
organizational documents (as the same may be amended from time to time) of the
Company or any such Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of the Company and its Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any of its
Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the
loss thereof is not adverse in any material respect to the Holders of the
Senior Subordinated Notes.
SECTION 4.14. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Senior Subordinated Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
will mail a notice to each Holder describing the transaction that constitutes
the Change of Control and offering to repurchase the Senior Subordinated Notes
pursuant to the procedures required by this Indenture and described in such
notice; provided that, prior to complying with the provisions of this covenant,
but in any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of Senior Subordinated Notes required by this covenant. The Company
will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Senior
Subordinated Notes as a result of a Change of Control.
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(b) On the Change of Control Payment Date, the Company will, to the
extent lawful, (i) accept for payment all Senior Subordinated Notes or portions
thereof properly tendered pursuant to the Change of Control Offer, (ii) deposit
with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Senior Subordinated Notes or portions thereof so tendered and
(iii) deliver or cause to be delivered to the Trustee the Senior Subordinated
Notes so accepted together with an Officers' Certificate stating the aggregate
principal amount of Senior Subordinated Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each Holder of
Senior Subordinated Notes so tendered the Change of Control Payment for such
Senior Subordinated Notes, and the Trustee will promptly authenticate and mail
(or cause to be transferred by book entry) to each Holder a new Senior
Subordinated Note equal in principal amount to any unpurchased portion of the
Senior Subordinated Notes surrendered, if any; provided, that each such new
Senior Subordinated Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Company will publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
The occurrence of a Change of Control could result in a default under
the Senior Debt of the Company. In addition, the Senior Debt could restrict the
Company's ability to repurchase Senior Subordinated Notes upon a Change of
Control. In the event a Change of Control occurs at a time when the Company is
prohibited from repurchasing Senior Subordinated Notes, the Company could seek
the consent of its lenders to the repurchase of Senior Subordinated Notes or
could attempt to refinance the borrowings that contain such prohibition. If the
Company does not obtain such a consent or repay such borrowings, the Company
will remain prohibited from repurchasing Senior Subordinated Notes. In such
case, the Company's failure to make a Change of Control Offer or to repurchase
the Senior Subordinated Notes tendered in a Change of Control Offer would
constitute an Event of Default under this Indenture, which could, in turn,
constitute a default under the Senior Debt. In such circumstances, the
subordination provisions in Article 10 of this Indenture would likely restrict
payments to the Holders of Senior Subordinated Notes. Finally, the Company's
ability to repurchase Senior Subordinated Notes upon a Change of Control may be
limited by the Company's then existing financial resources.
(c) The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Senior Subordinated Notes validly tendered and not
withdrawn under such Change of Control Offer.
SECTION 4.15. ISSUANCES AND SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer, convey, sell or otherwise dispose of any Capital
Stock of any Restricted Subsidiary of the Company to any Person (other than the
Company or a Wholly Owned Restricted Subsidiary of the Company), unless (a)
such transfer, conveyance, sale or other disposition is of all of the Capital
Stock of such Restricted Subsidiary owned by the Company and its Restricted
Subsidiaries and (b) such transaction is conducted in accordance with Section
4.10 hereof and (ii) shall not permit any Restricted Subsidiary of the Company
to issue any of its Equity Interests (other than, if required by law, shares of
its Capital Stock constituting directors' qualifying shares) to any Person
other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company.
37
SECTION 4.16. OTHER SENIOR SUBORDINATED DEBT.
Neither the Company nor any of its Restricted Subsidiaries shall
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Debt of the Company or such Restricted Subsidiary, as the case may be, and
senior in any respect in right of payment to the Senior Subordinated Notes or
such Restricted Subsidiary's Guarantee.
SECTION 4.17. SUBSIDIARY GUARANTEES.
If the Company or any of its Restricted Subsidiaries shall acquire or
create a Subsidiary after the date of this Indenture, such newly acquired or
created subsidiary shall execute a Guarantee (a "Subsidiary Guarantee") and
deliver an opinion of counsel in accordance with the terms of this Indenture;
provided, that this Section 4.17 shall not apply to (i) a Restricted Subsidiary
formed for the sole purpose of engaging in accounts receivable financings; and
(ii) any Subsidiary that has properly been designated as an Unrestricted
Subsidiary in accordance with this Indenture for so long as it continues to
constitute an Unrestricted Subsidiary.
SECTION 4.18. PAYMENTS FOR CONSENT.
The Company shall not, and shall not permit any of its Subsidiaries
or Affiliates to, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise, to any Holder of
any Senior Subordinated Notes for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Senior
Subordinated Notes unless such consideration is offered to be paid or is paid
to all Holders of the Senior Subordinated Notes that consent, waive or agree to
an amendment in the time frame set forth in the solicitation documents relating
to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Company may not consolidate or merge with or into (whether or not
the Company is the surviving entity), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions, to another corporation, Person or entity
unless: (i) the Company is the surviving entity or the entity or the Person
formed by or surviving any such consolidation or merger (if other than the
Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia; (ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the
Senior Subordinated Notes and this Indenture pursuant to a supplemental
indenture in a form reasonably satisfactory to the Trustee; (iii) immediately
after such transaction, no Default or Event of Default exists; and (iv) except
in the case of a merger of the Company with or into a Wholly Owned Restricted
Subsidiary of the Company, the Company or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company)
38
or to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made (a) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (b) will, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Senior Subordinated
Notes except in the case of a sale of all of the Company's assets that meets
the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(a) default for 30 days in the payment when due of interest on
the Senior Subordinated Notes (whether or not prohibited by the
provisions of Article 10 of this Indenture);
(b) default in payment when due of the principal of or premium,
or Liquidated Damages, if any, on the Senior Subordinated Notes
(whether or not prohibited by the provisions of Article 10 of this
Indenture);
(c) failure by the Company to comply with Sections 4.07, 4.09,
4.10 and 4.14;
(d) failure by the Company for 30 days after notice to comply
with any of its other agreements in this Indenture or the Senior
Subordinated Notes;
(e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
this Indenture, which default (1) is caused by a failure to pay
principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in respect of
such Indebtedness (a "Payment Default") or (2) results
39
in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which
has been so accelerated, aggregates $5.0 million or more;
(f) failure by the Company or any of its Restricted Subsidiaries
to pay final judgments aggregating in excess of $5.0 million and
either (1) any creditor commences enforcement proceedings upon any
such judgment or (2) such judgments are not paid, discharged or stayed
for a period of 45 days; and
(g) the Company or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary pursuant to or within the meaning of Bankruptcy
Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it
in an involuntary case,
(iii) consents to the appointment of a custodian of it or
for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
(h) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary in an
involuntary case;
(ii) appoints a custodian of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary or for all
or substantially all of the property of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any of its
Significant Subsidiaries or any group of Subsidiaries that, taken
as a whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.02. ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (g) or (h) of Section 6.01 hereof) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding
Senior Subordinated Notes may declare all the Senior Subordinated Notes to be
due and payable immediately. Notwithstanding the foregoing, if an Event of
Default specified in clause (g)
40
or (h) of Section 6.01 hereof occurs, all outstanding Senior Subordinated Notes
shall be due and payable immediately without further action or notice. Holders
of the Senior Subordinated Notes may not enforce this Indenture or the Senior
Subordinated Notes except as provided in this Indenture. Subject to certain
limitations, the Holders of a majority in aggregate principal amount of the
then outstanding Senior Subordinated Notes by written notice to the Trustee may
on behalf of all of the Holders rescind an acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default (except nonpayment of principal, interest or premium
that has become due solely because of the acceleration) have been cured or
waived. The Trustee may withhold from Holders of the Senior Subordinated Notes
notice of any continuing Default or Event of Default (except a Default or Event
of Default relating to the payment of principal or interest) if it determines
that withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Senior Subordinated
Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become
and be immediately due and payable to the extent permitted by law upon the
acceleration of the Senior Subordinated Notes. If an Event of Default occurs
prior to March 1, 2002 by reason of any willful action (or inaction) taken (or
not taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Senior Subordinated Notes prior to such date,
then, upon acceleration of the Senior Subordinated Notes, an additional premium
shall also become and be immediately due and payable in an amount, for each of
the years beginning on June 1 of the years set forth below, as set forth below
(expressed as a percentage of the accreted value to the date of payment that
would otherwise be due but for the provisions of this sentence):
YEAR PERCENTAGE
---- ----------
1997......................................... 112.663%
1998......................................... 111.080%
1999......................................... 109.498%
2000......................................... 107.915%
2001......................................... 106.333%
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, interest
on, Liquidated Damages, if any, or any other premiums, if any, on the Senior
Subordinated Notes or to enforce the performance of any provision of the Senior
Subordinated Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Senior Subordinated Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Senior
Subordinated Note 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. All remedies are cumulative to the extent
permitted by law.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding by notice to the Trustee (and without
notice to any other Holders) may on behalf of the Holders of all of the Senior
Subordinated Notes waive an existing Default or Event of Default and its
consequences hereunder except a continuing Default or Event of Default in the
payment of the principal of or premium, interest or Liquidated Damages, if any,
on the Senior Subordinated Notes (including in connection with an offer to
purchase) (provided, however, that the Holders of a majority in aggregate
principal amount of the then outstanding Senior Subordinated Notes may rescind
an acceleration and its consequences, including any related payment default
that resulted from such acceleration). Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
SECTION 6.05. CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of the then
outstanding Senior Subordinated Notes may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of other Holders of
Senior Subordinated Notes or that may involve the Trustee in personal
liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Senior Subordinated Note may pursue a remedy with
respect to this Indenture or the Senior Subordinated Notes only if:
(a) the Holder of a Senior Subordinated Note gives to the Trustee
written notice of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Senior Subordinated Notes make a written request to the Trustee
to pursue the remedy;
(c) such Holder of a Senior Subordinated Note or Holders of Senior
Subordinated Notes offer and, if requested, provide to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or
expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Senior Subordinated Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Senior Subordinated Note may not use this Indenture to prejudice
the rights of another Holder of a Senior Subordinated Note or to obtain a
preference or priority over another Holder of a Senior Subordinated Note.
42
SECTION 6.07. RIGHTS OF HOLDERS OF SENIOR SUBORDINATED NOTES TO RECEIVE
PAYMENT.
Notwithstanding any other provision of this Indenture, but subject to
the provisions of Sections 6.04 and 6.06, the right of any Holder of a Senior
Subordinated Note to receive payment of principal, interest, Liquidated
Damages, if any, or other premiums, if any, on the Senior Subordinated Note, on
or after the respective due dates expressed in the Senior Subordinated Note, or
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount of
principal of, Liquidated Damages, if any, or other premiums, if any, and
interest remaining unpaid on the Senior Subordinated Notes and interest on
overdue principal and, to the extent lawful, interest along with such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized (a) to file proofs of claim for the whole
amount of the principal of, Liquidated Damages, if any, and other premiums, if
any, and interest on the Senior Subordinated Notes and to file such proof of
claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and the Holders of the Senior Subordinated Notes allowed in such
judicial proceedings and (b) to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof
out of the estate in any such proceeding, shall be denied for any reason,
payment of the same shall be secured by a Lien on, and shall be paid out of,
any and all distributions, dividends, money, securities and other properties
that the Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or otherwise,
prior to any payment to such Holder. Nothing herein contained shall be deemed
to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Senior Subordinated Notes or the rights of any
Holder, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Section 6.10, it
shall pay out the money in the following order:
43
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Senior Subordinated Notes for amounts due and
unpaid on the Senior Subordinated Notes for principal, interest, Liquidated
Damages, if any, other premiums, if any, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Senior
Subordinated Notes for principal, interest, Liquidated Damages, if any, or
other premiums, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Senior Subordinated Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Senior Subordinated Note pursuant to Section 6.07 hereof, or a suit by Holders
of more than 10% in principal amount of the then outstanding Senior
Subordinated Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee 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 liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any financial liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) 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. Money held
in trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) Subject to Section 7.01(b)(ii), the Trustee may conclusively rely
upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have
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offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that might be incurred by it in compliance with such
request or direction.
(g) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(h) 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, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney,
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(i) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
(j) 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 a default
is received by the Trustee at the Corporate Trust Office of the Trustee and
such notice references the Senior Subordinated Notes and this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Senior Subordinated Notes and may otherwise deal with the
Company or any Affiliate of the Company with the same rights it would have if
it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Senior Subordinated
Notes. Furthermore, it shall not be accountable for the Company's Use of the
Proceeds from the Offering other than as specified under Section 4.07 hereof
but in no event shall the Trustee be responsible or accountable to any Person
including a Holder for the actual use or application of any money paid to the
Company, or upon the Company's direction to any Person or otherwise under any
provision of this Indenture; nor shall it be responsible for any statement or
recital herein or any statement in the Senior Subordinated Notes or any
registration statement for the Senior Subordinated Notes (other than statements
in any Form T-1 filed with the SEC under the TIA) or in this Indenture other
than its certificate of authentication. Finally, the Trustee shall not be
responsible for the use or application of any money received by any Paying
Agent other than the Trustee.
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SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Senior Subordinated
Notes a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal, Liquidated Damages or interest on any Senior Subordinated Note, the
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Senior Subordinated Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE SENIOR SUBORDINATED NOTES.
Within 60 days after each May 15 beginning with the May 15 following
the date of this Indenture, and for so long as Senior Subordinated Notes remain
outstanding, the Trustee shall mail to the Holders of the Senior Subordinated
Notes a brief report dated as of such reporting date that complies with TIA
[section] 313(a) (but if no event described in TIA [section] 313(a) has
occurred within the twelve months preceding the reporting date, no report need
be transmitted). The Trustee also shall comply with TIA [section] 313(b). The
Trustee shall also transmit by mail all reports as required by TIA [section]
313(c).
A copy of each report at the time of its mailing to the Holders of
Senior Subordinated Notes shall be mailed to the Company and filed with the
SEC, if accepted, and each stock exchange on which the Senior Subordinated
Notes are listed in accordance with TIA [section] 313(d). The Company shall
promptly notify the Trustee when the Senior Subordinated Notes are listed on
any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time compensation
for its acceptance of this Indenture and services in accordance with any
provision of this Indenture as the parties shall agree in writing from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust). 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 promptly upon request
for all reasonable disbursements, advances and expenses incurred or made by it
in addition to the compensation for its services in accordance with any
provision of this Indenture. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the
acceptance or administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the Company (including
this Section 7.07) and defending itself against any claim (whether asserted by
the Company or any Holder or any other person) or liability in connection with
the exercise or performance of any of its powers or duties hereunder, except to
the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee shall notify the Company promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Company shall not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
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The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Senior Subordinated Notes on all money
or property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Senior Subordinated Notes. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) or (f) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA [section]
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company at least 45 days prior to
the date of the proposed resignation. The Holders of Senior Subordinated Notes
of a majority in principal amount of the then outstanding Senior Subordinated
Notes may remove the Trustee by so notifying the Trustee and the Company in
writing. The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a custodian, receiver or public officer takes charge of the
Trustee or its property; or
(d) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office,
the Holders of a majority in principal amount of the then outstanding Senior
Subordinated Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Senior Subordinated Notes of at least 10% in principal amount of
the then outstanding Senior Subordinated Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Senior
Subordinated Note who has been a Holder of a Senior Subordinated Note for at
least six months, fails to comply with Section 7.10, such
48
Holder of a Senior Subordinated Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the 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 Holders of the Senior Subordinated Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor
Trustee; provided that all sums owing to the Trustee hereunder have been paid
and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding
replacement of the Trustee pursuant to this Section 7.08, the Company's
obligations under Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or
state authorities and that has a combined capital and surplus of at least
$500.0 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA [section] 310(a)(1), (2) and (5). The Trustee shall comply
with TIA [section] 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with TIA [section] 311(a), excluding any
creditor relationship listed in TIA [section] 311(b). A Trustee who has
resigned or been removed shall be subject to TIA [section] 311(a) to the extent
indicated therein.
SECTION 7.12. MAY HOLD SENIOR SUBORDINATED NOTES.
The Trustee, any Paying Agent, any Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of the Senior Subordinated Notes and, subject to Sections 6.08 and
6.09, may otherwise deal with the Company with the same rights it would have if
it were not Trustee, Paying Agent, Registrar or such other agent.
SECTION 7.13. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.
Any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the
date on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in
49
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any Officer of the Company actually receives such
application, unless any such Officer shall have consented in writing to any
earlier date) unless prior to taking any such action (or the effective date in
the case of an omission), the Trustee shall have received written instructions
in response to such application specifying the action to be taken or omitted.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option and at any time, elect to have either
Section 8.02 or 8.03 hereof be applied to all outstanding Senior Subordinated
Notes upon compliance with the conditions set forth below in this Article
Eight.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and the Guarantors, if any, shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Senior Subordinated Notes or Guarantees, as the case may be, on the
date the conditions set forth below are satisfied (hereinafter, "Legal
Defeasance"). For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness represented by
the outstanding Senior Subordinated Notes, which shall thereafter be deemed to
be "outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Senior Subordinated Notes and
this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Senior
Subordinated Notes to receive payments in respect of the principal of and
premium, interest and Liquidated Damages, if any, on Senior Subordinated Notes
when such payments are due from the trust described in Section 8.04 hereof, (b)
the Company's obligations with respect to the Senior Subordinated Notes
concerning issuing temporary Senior Subordinated Notes, registration of Senior
Subordinated Notes, mutilated, destroyed, lost or stolen Senior Subordinated
Notes and the maintenance of an office or agency for payment and money for
security payments held in trust, (c) the rights, powers, trusts, duties and
immunities of the Trustee, and the Company's obligations in connection
therewith and (d) this Article Eight. Subject to compliance with this Article
Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors, if any, shall,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be released from their respective obligations under the covenants contained in
Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 5.01
and 5.02 hereof with respect to the outstanding Senior Subordinated Notes on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Senior Subordinated Notes shall thereafter be
50
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Senior
Subordinated Notes shall not be deemed outstanding for accounting purposes).
For this purpose, Covenant Defeasance means that, with respect to the
outstanding Senior Subordinated Notes, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by reason of any
reference elsewhere herein to any such covenant or by reason of any reference
in any such covenant to any other provision herein or in any other document and
such omission to comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the remainder of
this Indenture and such Senior Subordinated Notes shall be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03 hereof, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof and Sections 6.01(c) through
6.01(h) shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Section 8.02 or 8.03 hereof to the outstanding Senior Subordinated Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of the Senior Subordinated
Notes, cash in U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, interest and
Liquidated Damages, if any, on the outstanding Senior Subordinated
Notes on the stated maturity or on the applicable redemption date, as
the case may be, and the Company must specify whether the Senior
Subordinated Notes are being defeased to maturity or to a particular
redemption date;
(b) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming 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 Holders of the outstanding Senior
Subordinated Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Senior Subordinated Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have
been the case if such Covenant Defeasance had not occurred;
51
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day
after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance will not result
in a breach or violation of, or constitute a default under any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit,
the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Senior Subordinated Notes over
the other creditors of the Company with the intent of defeating,
hindering, delaying or defrauding creditors of the Company or others;
and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the Legal Defeasance or
the Covenant Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Senior
Subordinated Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Senior Subordinated Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Senior Subordinated Notes of all sums due and to become due
thereon in respect of principal, interest, Liquidated Damages, if any, or other
premiums, if any, but such money need not be segregated from other funds except
to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Senior Subordinated Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
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SECTION 8.06. REPAYMENT TO COMPANY.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, interest, on
Liquidated Damages, and other premiums, if any, on any Senior Subordinated Note
and remaining unclaimed for two years after such principal, interest,
Liquidated Damages, and other premiums, if any, has become due and payable
shall be paid to the Company on its request or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Senior Subordinated
Note shall thereafter, as a 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; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining will be repaid to the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02
or 8.03 hereof, as the case may be, by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Senior Subordinated Notes shall be revived and reinstated as though no deposit
had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if
the Company makes any payment of principal of, premium, if any, or interest on
any Senior Subordinated Note following the reinstatement of its Obligations,
the Company shall be subrogated to the rights of the Holders of such Senior
Subordinated Notes to receive such payment from the money held by the Trustee
or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF SENIOR SUBORDINATED NOTES.
Notwithstanding Section 9.02 hereof, the Company and the Trustee may
amend or supplement this Indenture or the Senior Subordinated Notes without the
consent of any Holder of a Senior Subordinated Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Senior Subordinated Notes in
addition to or in place of certificated Senior Subordinated Notes;
(c) to provide for the assumption of the Company's obligations to
Holders of Senior Subordinated Notes in the case of a merger or
consolidation pursuant to Section 5.01 hereof;
53
(d) to make any change that would provide any additional rights or
benefits to the Holders of Senior Subordinated Notes or that does not
adversely affect the legal rights under this Indenture of any such Holder;
or
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Company in
the execution of any amended or supplemental Indenture authorized or permitted
by the terms of this Indenture and to make any further appropriate agreements
and stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF SENIOR SUBORDINATED NOTES.
Except as provided below in this Section 9.02, this Indenture or the
Senior Subordinated Notes may be amended or supplemented with the consent of
the Holders of at least a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, tender offer or exchange offer for
the Senior Subordinated Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default (other than a Default or Event of
Default in the payment of the principal of, interest or, Liquidated Damages, if
any, on the Senior Subordinated Notes, except a payment default resulting from
an acceleration that has been rescinded) or compliance with any provision of
this Indenture or the Senior Subordinated Notes may be waived with the consent
of the Holders of a majority in aggregate principal amount of the then
outstanding Senior Subordinated Notes (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Senior Subordinated Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Senior
Subordinated Notes as aforesaid, and upon receipt by the Trustee of the
documents described in Section 9.06 hereof, the Trustee shall join with the
Company in the execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of Senior
Subordinated Notes under this Section 9.02 to approve the particular form of
any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Senior Subordinated
Notes affected thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07
hereof, the Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding may waive compliance
54
in a particular instance by the Company with any provision of this Indenture or
the Senior Subordinated Notes. However, without the consent of each Holder
affected, an amendment or waiver may not (with respect to any Senior
Subordinated Notes held by a non-consenting Holder):
(a) reduce the principal amount of Senior Subordinated Notes
whose Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Senior Subordinated Note or alter the provisions with respect to the
redemption of the Senior Subordinated Notes (other than provisions
relating to Sections 4.10 and 4.14 hereof);
(c) reduce the rate of or change the time for payment of interest
or Liquidated Damages, if any, on any Senior Subordinated Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, interest or Liquidated Damages, if any, on
the Senior Subordinated Notes (except a rescission of acceleration of
the Senior Subordinated Notes by the Holders of at least a majority in
aggregate principal amount of the Senior Subordinated Notes and a
waiver of the payment default that resulted from such acceleration);
(e) make any Senior Subordinated Note payable in money other than
that stated in the Senior Subordinated Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Senior
Subordinated Notes to receive payments of principal of or premium,
interest or Liquidated Damages, if any, on the Senior Subordinated
Notes;
(g) waive a redemption payment with respect to any Senior
Subordinated Note (other than a payment required Section 4.10 or 4.14
hereof); or
(h) make any change in the foregoing amendment and waiver
provisions.
In addition, any amendment to the provisions of Article 10 of this
Indenture (which relate to Subordination) will require the consent of the
Holders of at least 75% in aggregate principal amount of the Senior
Subordinated Notes then outstanding if such Amendment would adversely affect
the rights of Holders of the Senior Subordinated Notes.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Senior
Subordinated Notes shall be set forth in an amended or supplemental Indenture
that complies with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Senior Subordinated Note is a continuing consent by the
Holder of a Senior Subordinated Note and every subsequent Holder of a Senior
Subordinated Note or portion of a Senior Subordinated Note that evidences the
same debt as the consenting Holder's Senior Subordinated Note, even if notation
of the consent is not made on any Senior Subordinated Note. However, any such
Holder of a Senior
55
Subordinated Note or subsequent Holder of a Senior Subordinated Note may revoke
the consent as to its Senior Subordinated Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes effective in
accordance with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SENIOR SUBORDINATED NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Senior Subordinated Note thereafter authenticated.
The Company in exchange for all Senior Subordinated Notes may issue and the
Trustee shall authenticate new Senior Subordinated Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Senior
Subordinated Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article Nine if the amendment or supplement does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. The Company may not sign an amendment or supplemental Indenture until
the Board of Directors approves it. In executing any amended or supplemental
indenture, the Trustee shall be entitled to receive and (subject to Section
7.01) shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder of Senior Subordinated Notes by
accepting a Senior Subordinated Note agrees, that the Subordinated Obligations
(as defined in Section 10.02) are subordinated in right of payment, to the
extent and in the manner provided in this Article, to the prior payment in full
in cash of all Obligations with respect to Senior Debt of the Company (whether
outstanding on the date hereof or hereafter created, incurred, assumed or
guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
SECTION 10.02. CERTAIN DEFINITIONS.
"Insolvency or Liquidation Proceeding" means, with respect to any
Person, (i) any insolvency or bankruptcy or similar case or proceeding, or any
reorganization, receivership, liquidation, dissolution or winding up of such
Person, whether voluntary or involuntary, or (ii) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of such
Person.
"Post-Petition Interest" means, with respect to any Indebtedness of
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding against such Person in
accordance with and at the contract rate (including, without limitation, any
rate applicable upon default) specified in the agreement or instrument
creating, evidencing or
56
governing such Indebtedness, whether or not, pursuant to applicable law or
otherwise, the claim for such interest is allowed as a claim in such Insolvency
or Liquidation Proceeding.
"Representative" means, with respect to any Senior Debt, the agent or
other representative(s), if any, of holders of such Senior Debt.
"Senior Agent" means (i) until all Indebtedness under the Bank Credit
Facility is paid in full in cash, the agent (or the institution performing
similar functions) under the Bank Credit Facility and (ii) if all Indebtedness
under the Bank Credit Facility has been paid in full, the Person (or
representative of the Persons) holding the greatest amount of Senior Debt.
"Subordinated Obligations" means all Indebtedness and other
Obligations of the Company or any of its Subsidiaries, contingent or otherwise,
now or hereafter existing under or in respect of the Senior Subordinated Notes
(pursuant to the terms thereof or any other agreement or instrument relating
thereto) or this Indenture, other than payments and other distributions made
from any defeasance trust created pursuant to Article 8 hereof, which
obligations, in each case, shall not constitute Subordinated Obligations.
SECTION 10.03. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company in an Insolvency or
Liquidation Proceeding relating to the Company or its property;
(1) holders of Senior Debt of the Company shall be entitled to
receive payment in full in cash of all Obligations due in respect of
such Senior Debt (including Post-Petition Interest) before Holders of
the Senior Subordinated Notes shall be entitled to receive any payment
with respect to the Senior Subordinated Notes; and
(2) until all Obligations with respect to Senior Debt of the
Company (as provided in subsection (1) above) are paid in full in
cash, any distribution to which Holders of Senior Subordinated Notes
would be entitled but for this Article shall be made to holders of
such Senior Debt (except that Holders may receive securities that are
subordinated to at least the same extent as the Senior Subordinated
Notes to Senior Debt of the Company and any securities issued in
exchange for Senior Debt of the Company and payments made from any
defeasance trust created pursuant to Article 8 hereof).
SECTION 10.04. DEFAULT ON SENIOR DEBT.
(a) The Company may not make any payment or distribution upon or in
respect of the Senior Subordinated Notes (except in such subordinated
securities or from any defeasance trust created pursuant to Article 8 hereof)
if:
(i) a default in the payment of the principal of or premium or
interest on Designated Senior Debt of the Company occurs and is
continuing beyond any applicable period of grace; or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt of the Company that permits holders of the
Designated Senior Debt as to which such default relates
57
to accelerate its maturity and the Trustee receives a notice of such
default (a "Payment Blockage Notice") from the holders of any
Designated Senior Debt;
(b) if the Trustee receives any such Payment Blockage Notice, no
subsequent Payment Blockage Notice shall be effective for purposes of this
Section unless and until (i) 360 days shall have elapsed since the first day of
the effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal of and premium, interest and Liquidated
Damages, if any, on the Senior Subordinated Notes that have come due have been
paid in full in cash. Further, no nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
(c) The Company may and shall resume payments on the Senior
Subordinated Notes upon:
(i) in the case of a default referred to in Section 10.04(i)
hereof, the date upon which such default is cured or waived, or
(ii) in the case of a default referred to in Section 10.04(ii)
hereof, the earlier of the date upon which the default is cured or
waived or 179 days after the date on which the applicable Payment
Blockage Notice is received, unless the maturity of such Designated
Senior Debt has been accelerated.
SECTION 10.05. ACCELERATION OF SENIOR SUBORDINATED NOTES.
The Company shall promptly notify holders of Senior Debt of the
Company if payment of the Senior Subordinated Notes is accelerated because of
an Event of Default.
SECTION 10.06. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of Senior Subordinated
Notes receives any payment of any Obligations with respect to the Senior
Subordinated Notes at a time when a Responsible Officer of the Trustee or such
Holder, as applicable, has actual knowledge that such payment is prohibited by
Section 10.04 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to the holders of Senior Debt of the Company as their
interests may appear under the Indenture or other agreement (if any) pursuant
to which such Senior Debt may have been issued, as set forth in a writing
provided to the Trustee and consented to by all Representatives of the holders
of Senior Debt of the Company, for application to the payment of all
Obligations with respect to such Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving affect to any concurrent payment or distribution to or for the holders
of such Senior Debt.
With respect to the holders of Senior Debt of the Company, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt of the Company, and shall not be
liable to any such holders if the Trustee shall pay over or distribute to or on
behalf of Holders of Senior Subordinated Notes of the Company or any other
Person money or assets to which any holders of such Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made at a time
when a Responsible Officer has actual knowledge that the terms of this Article
10 prohibit such payment.
58
SECTION 10.07. NOTICE.
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts known to the Company that would cause a payment of any
Obligations with respect to the Senior Subordinated Notes to violate this
Article, but failure to give such notice shall not affect the subordination of
the Senior Subordinated Notes to the Senior Debt of the Company as provided in
this Article.
SECTION 10.08. SUBROGATION.
After all Senior Debt of the Company is paid in full in cash and until
the Senior Subordinated Notes are paid in full, Holders of Senior Subordinated
Notes shall be subrogated (equally and ratably with all other Indebtedness pari
passu with the Senior Subordinated Notes) to the rights of holders of such
Senior Debt to receive distributions applicable to such Senior Debt to the
extent that distributions otherwise payable to the Holders have been applied to
the payment of such Senior Debt. A distribution made under this Article to
holders of Senior Debt of the Company that otherwise would have been made to
Holders of Senior Subordinated Notes is not, as between the Company and Holders
of Senior Subordinated Notes, a payment by the Company on the Senior
Subordinated Notes.
SECTION 10.09. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of Senior
Subordinated Notes and holders of Senior Debt of the Company. Nothing in this
Indenture shall:
(1) impair, as between the Company and Holders of Senior
Subordinated Notes, the obligation of the Company, which is absolute
and unconditional, to pay principal, interest and Liquidated Damages,
if any, or other premiums, if any, on the Senior Subordinated Notes in
accordance with their terms;
(2) affect the relative rights of Holders of Senior Subordinated
Notes and creditors of the Company other than their rights in relation
to holders of such Senior Debt; or
(3) prevent the Trustee or any Holder of Senior Subordinated
Notes from exercising its available remedies upon a Default or Event
of Default, subject to the rights of holders of owners of such Senior
Debt to receive distributions and payments otherwise payable to
Holders of Senior Subordinated Notes.
If the Company fails because of this Article to pay principal,
interest, Liquidated Damages, if any, or other premiums, if any, on a Senior
Subordinated Note on the due date (subject to any grace periods provided in
Section 6.01), the failure is still a Default or Event of Default.
SECTION 10.10. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
(a) No right of any holder of Senior Debt of the Company to enforce
the subordination of the Subordinated Obligations shall be impaired by any act
or failure to act by the Company or any Holder of the Senior Subordinated Notes
or the failure of the Company or any Holder of the Senior Subordinated Notes to
comply with this Indenture.
(b) Without in any way limiting Section 10.10(a), the holders of any
Senior Debt of the Company may at any time and from time to time, without the
consent of or notice to any Holders of the
59
Senior Subordinated Notes, without incurring any liabilities to any such Holder
and without impairing or releasing the subordination and other benefits
provided in this Indenture or the Holders' obligations to the holders of such
Senior Debt (even if any Holder's right of reimbursement or subrogation or
other right or remedy is affected, impaired or extinguished thereby, but
subject to the proviso contained in the first sentence, and to the second
sentence, of the definition of "Senior Debt,") do any one or more of the
following: (i) amend, renew, exchange, extend, modify, increase or supplement
in any manner such Senior Debt or any instrument evidencing or guaranteeing or
securing such Senior Debt or any agreement under which such Senior Debt is
outstanding (including, but not limited to, changing the manner, place or terms
of payment or changing or extending the time of payment of, or renewing,
exchanging, amending, increasing, releasing, terminating or altering, (1) the
terms of such Senior Debt, (2) any security for, or any guarantee of, such
Senior Debt, (3) any liability of any obligor on such Senior Debt (including
any guarantor) or any liability incurred in respect of such Senior Debt); (ii)
sell, exchange, release, surrender, realize upon, enforce or otherwise deal
with in any manner and in any order any property pledged, mortgaged or
otherwise securing such Senior Debt or any liability of any obligor thereon, to
such holder, or any liability incurred in respect thereof; (iii) settle or
compromise any such Senior Debt or any other liability of any obligor of such
Senior Debt to such holder or any security therefor or any liability incurred
in respect thereof and apply any sums by whomsoever paid and however realized
to any liability (including, without limitation, payment of any Senior Debt) in
any manner or order; and (iv) release, terminate or otherwise cancel, or fail
to take or to record or otherwise perfect, for any reason or for no reason, any
lien or security interest securing such Senior Debt by whomsoever granted; (v)
exercise or delay in or refrain from exercising any right or remedy against any
obligor or any guarantor or any other Person; and (vi) elect any remedy and
otherwise deal freely with any obligor and any security for such Senior Debt or
any liability of any obligor to the holders of such Senior Debt or any
liability incurred in respect to such Senior Debt.
SECTION 10.11. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt of the Company, the distribution may be made and the notice given
to their Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Senior Subordinated Notes
shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Senior Subordinated Notes for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Debt 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.
SECTION 10.12. RIGHTS OF TRUSTEE AND PAYING AGENT.
Neither the Trustee nor any Paying Agent shall at any time be charged
with the knowledge of the existence of any facts that would prohibit the making
of any payment to or by the Trustee or Paying Agent under this Article 10,
unless and until the Trustee or Paying Agent shall have received written notice
thereof from the Company, the Senior Agent, one or more holders of Senior Debt
of the Company or a Representative of any holders of Senior Debt of the
Company; and, prior to the receipt of any such written notice, the Trustee or
Paying Agent shall be entitled to assume conclusively that no such facts exist.
The Trustee shall be entitled to rely on the delivery to it of written notice
by a Person representing itself to be a holder of Senior Debt (or a
Representative thereof) to establish that such notice has been
60
given. In the event that the Trustee or Paying Agent determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Debt to participate in any payment or distribution pursuant to
this Article 10, the Trustee or Paying Agent may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee or Paying Agent as to
the amount of Senior Debt held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article 10, and if such
evidence is not furnished, the Trustee or Paying Agent may defer any payment to
such Person pending judicial determination as to the right of such Person to
receive such payment. Only the Company, a Representative or a holder of Senior
Debt of the Company that has no Representative may give the notice. Nothing in
this Article 10 shall impair the claims of, or payments to, the Trustee under
or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may
do the same with like rights.
SECTION 10.13. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of the Senior Subordinated Notes by the Holder's
acceptance thereof authorizes and directs the Trustee on such Holder's behalf
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 10, and appoints the Trustee to act
as the Holder's attorney-in-fact for any and all such purposes. If the Trustee
does not file a proper proof of claim or proof of debt in the form required in
any proceeding referred to in Section 6.09 hereof at least 30 days before the
expiration of the time to file such claim, the Senior Agent is hereby
authorized to file an appropriate claim for and on behalf of the Holders of
such Senior Subordinated Notes.
SECTION 10.14. PAYMENT.
For all purposes of this Article 10, a "payment or distribution on
account of Subordinated Obligations" shall include, without limitation, any
direct or indirect payment or distribution on account of the purchase,
prepayment, redemption, retirement, defeasance (other than payments and other
distributions made from any defeasance trust created pursuant to Article 8
hereof) or acquisition of any such Senior Subordinated Note, any recovery by
the exercise of any right of set-off, any direct or indirect payment of
principal, premium or interest with respect to or in connection with any
mandatory or optional redemption or purchase provisions, any direct or indirect
payment or distribution payable or distributable by reason of any other
Indebtedness or Obligation being subordinated or any Subordinated Obligations,
and any direct or indirect payment or recovery on any claim (including claims
for Liquidated Damages, if any,) relating to or arising out of this Indenture,
the Senior Subordinated Notes or the issuance Notes.
SECTION 10.15. DEFEASANCE OF THIS ARTICLE 10.
The subordination of the Senior Subordinated Notes provided by this
Article 10 is expressly made subject to the provisions for defeasance in
Article 8 hereof and, anything herein to the contrary notwithstanding, upon the
effectiveness of any such defeasance (provided that any deposit pursuant to
Article 8 was not prohibited by this Article 10 or any other instrument or
agreement governing any Senior Debt of the Company and did not constitute a
default under any such instrument or agreement), the Senior Subordinated Notes
then outstanding shall thereupon cease to be subordinated pursuant to this
Article 10; provided, however, that if the Company's obligations under this
Indenture and the such Senior Subordinated Notes are revived and reinstated in
accordance with the terms of Section 8.07 hereof, the
61
subordination provisions of this Article 10 shall be revived and reinstated
with respect to all Subordinated Obligations.
SECTION 10.16. NO CLAIMS AGAINST SUBSIDIARIES.
The Company and the Holders acknowledge and agree as follows: (a) the
Senior Subordinated Notes are an obligation of the Company only, and the
Holders thereof have, and will have, no claim, right or demand against any
Subsidiary of the Company or any assets or properties of any Subsidiary of the
Company on or in respect of the such Senior Subordinated Notes except to the
extent that any Subsidiary is a Guarantor thereunder; (b) the Company is, and
is capitalized as, a separate legal entity such that any claim, right or demand
by the Holders of the Senior Subordinated Notes with respect to the assets and
properties of any Subsidiary of the Company would be solely as a creditor of a
direct or indirect shareholder of such Subsidiary except to the extent that any
Subsidiary is a Guarantor thereunder, and that such arrangement has been relied
upon by and is for the benefit of holders of Senior Debt of the Company or any
Guarantor thereunder; and (c) the Company's direct and indirect Subsidiaries
have no obligation to pay dividends to or to make investments in the Company,
for the purpose of funding payment obligations of the Company to the Holders of
the Senior Subordinated Notes or otherwise.
SECTION 10.17. AMENDMENTS.
The provisions of this Article 10 shall not be amended or modified
without the written consent of the Senior Debt of the Company.
SECTION 10.18. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR DEBT.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Senior Subordinated Debt or to the Company or to any other Person cash,
property or securities to which any holders of Senior Debt shall be entitled by
virtue of this Article 10 or otherwise. The Trustee shall not be charged with
knowledge of the existence of Senior Debt or of any facts that would prohibit
any payment hereunder unless a Responsible Officer shall have received notice
to that effect at the address of the Trustee set forth in Section 11.02. With
respect to the holders of Senior Debt, the Trustee undertakes to perform or to
observe only such of its covenants or obligations as are specifically set forth
in this Section and no implied covenants or obligations with respect to holders
of Senior Debt shall be read into this Indenture against the Trustee.
SECTION 10.19. RIGHTS OF TRUSTEE AS HOLDER OF SENIOR DEBT; PRESERVATION OF
TRUSTEE'S RIGHTS.
The Trustee or any Paying Agent in its individual capacity shall be
entitled to all the rights set forth in this Article 10 with respect to any
Senior Debt which may at any time be held by it, to the same extent as any
other holder of Senior Debt, and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder. Nothing in
this Section shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07.
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ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA [section]318(c), the imposed duties shall control.
SECTION 11.02. NOTICES.
Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first class
mail (registered or certified, return receipt requested), telex, telecopier or
overnight air courier guaranteeing next day delivery, to the other's address:
If to the Company:
The Xxxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
With a copy to:
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Administration
The Company or the Trustee, by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
63
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA [section] 313(c), to the extent required by the
TIA. Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
SECTION 11.03. COMMUNICATION BY HOLDERS OF SENIOR SUBORDINATED NOTES WITH
OTHER HOLDERS OF SENIOR SUBORDINATED NOTES.
Holders may communicate pursuant to TIA [section] 312(b) with other
Holders with respect to their rights under this Indenture or the Senior
Subordinated Notes. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA [section] 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA [section] 314(a)(4)) shall comply with the provisions
of TIA [section] 314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
64
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 11 shall in each case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 11 in place of the Trustee.
SECTION 11.08. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any Obligations of the Company
under the Senior Subordinated Notes or this Indenture or for any claim based
on, in respect of, or by reason of, such Obligations or their creation. Each
Holder of Senior Subordinated Notes by accepting a Senior Subordinated Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Senior Subordinated Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
SECTION 11.09. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE SENIOR SUBORDINATED NOTES AND THE GUARANTEE, IF
ANY, WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF.
SECTION 11.10. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person.
Any such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Senior
Subordinated Notes shall bind their respective successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 11.12. SEVERABILITY.
In case any provision in this Indenture or in the Senior Subordinated
Notes 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.
65
SECTION 11.13. COUNTERPART 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.
SECTION 11.14. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
ARTICLE 12
GUARANTEE OF SENIOR SUBORDINATED NOTES
SECTION 12.01. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
(a) On the date of this Indenture, all existing Restricted
Subsidiaries of the Company shall execute a Guarantee in substantially the form
of Exhibit C (a "Subsidiary Guarantee").
(b) After the date of this Indenture, if the Company, or any of its
Restricted Subsidiaries, shall acquire or create a Restricted Subsidiary, then
such Subsidiary shall execute a Subsidiary Guarantee, except that this
requirement shall not apply to (i) a Restricted Subsidiary formed for the sole
purpose of engaging in accounts receivable financing; and (ii) any Subsidiary
that has been properly designated as an Unrestricted Subsidiary in accordance
with Sections 1.01 and 4.07 for so long as it continues to constitute an
Unrestricted Subsidiary. Such Guarantee shall be substantially in the form of
Exhibit C and shall be accompanied by a Supplemental Indenture substantially in
the form of Exhibit D, along with such other opinions, certificates and
documents as are required under this Indenture.
(c) Except as provided for under the immediately following section, a
Guarantor shall be subject to the provisions of this Indenture from the date of
the Supplemental Indenture to which its Guarantee relates and until such time
as it has been properly designated as an Unrestricted Subsidiary in accordance
with Sections 1.01 and 4.07 hereof.
SECTION 12.02. SUBORDINATION OF GUARANTEE; GUARANTORS MAY CONSOLIDATE, ETC.,
ON CERTAIN TERMS.
(a) The obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 12 shall be junior and subordinated to the Senior Debt
of such Guarantor on the same basis as the Senior Subordinated Notes are junior
and subordinated to the Senior Debt of the Company. For the purposes of the
foregoing sentence, the Trustee and the Holders shall have the right to receive
and/or retain payments by any of the Guarantors in respect of any Subsidiary
Guarantee only at such times as they may receive and/or retain payments in
respect of the Senior Subordinated Notes pursuant to this Indenture, including
Article 10 hereof.
(b) Except as set forth in Articles 4 and 5, nothing contained in this
Indenture or in the Senior Subordinated Notes shall prevent (i) any
consolidation or merger of a Guarantor with or into
66
the Company or any other Guarantor or (ii) any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety, to the
Company or any other Guarantor.
(c) No Guarantor may consolidate with or merge with or into (whether
or not such Guarantor is the surviving Person) another corporation, Person or
entity, whether or not affiliated with such Guarantor, unless (i) subject to
the provisions of the following paragraph, the Person formed by or surviving
any such consolidation or merger (if other than such Guarantor) assumes all the
obligations of such Guarantor, pursuant to a supplemental indenture and in form
and substance reasonably satisfactory to the Trustee, under the Senior
Subordinated Notes, and this Indenture; (ii) immediately after giving effect to
such transaction, no Default or Event of Default exists; (iii) such Guarantor,
or any Person formed by or surviving any such consolidation or merger, would
have Consolidated Net Worth (immediately after giving effect to such
transaction) equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction; and (iv) the Company would be
permitted by virtue of the Company's pro forma Fixed Charge Coverage Ratio,
immediately after giving effect to such transaction, to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09 hereof; provided, that the foregoing provisions will not
restrict the ability of a Restricted Subsidiary to consolidate or merge with
the Company or another Restricted Subsidiary.
(d) In the event of a sale or other disposition of all of the assets
of any Guarantor (other than to or with the Company or another Guarantor), by
way of merger, consolidation or otherwise, or a sale or other disposition of
all of the capital stock of any Guarantor (other than to the Company or another
Guarantor), then such Guarantor (in the event of a sale or other disposition,
by way of such a merger, consolidation or otherwise, of all of the capital
stock of such Guarantor) or the corporation acquiring the property (in the
event of a sale or other disposition of all of the assets of such Guarantor)
will be released and relieved of any obligations under its Subsidiary
Guarantee; provided that the Net Proceeds of such sale or other disposition are
applied in accordance with Section 4.10 hereof.
(e) In the event the Company designates a Subsidiary Guarantor to be
an Unrestricted Subsidiary, then such Subsidiary Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee; provided that such
designation is conducted in accordance with Sections 1.01 and 4.07 hereof.
[Signatures on following page]
67
SIGNATURES
Dated as of February 27, 1997 THE XXXXX GROUP, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Officer
Dated as of February 27, 0000 XXX XXXX XX XXX XXXX, as
Trustee
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Treasurer
Exhibit A
===============================================================================
(Face of Senior Subordinated Note)
9 1/2% Series A Senior Subordinated Notes due 2007
No.
CUSIP No. $__________
THE XXXXX GROUP, INC.
promises to pay to the order of Cede & Co.
or registered assigns,
the principal sum of
on March 1, 2007.
Interest Payment Dates: March 1 and September 1
Record Dates: February 15 and August 15
THE XXXXX GROUP, INC.
By:_____________________________
Name: Xxxx X. Xxxxxxx
Title: Chief Financial Oficer
By:_____________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
This is one of the
Senior Subordinated Notes referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:__________________________________
Name:
Title:
Dated: February __, 1997
===============================================================================
(Back of Senior Subordinated Note)
9 1/2% Series A Senior Subordinated Notes due 2007
Unless and until it is exchanged in whole or in part for Senior
Subordinated Notes in definitive form, this Senior Subordinated Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. Unless this certificate is presented
by an authorized representative of The Depository Trust Company (55 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"), to the issuer 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 may be requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be 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.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX
XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY
BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE.
--------------
1. This paragraph should be included only if the Senior Subordinated Note is
issued in global form.
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1. INTEREST. Interest on the Senior Subordinated Notes will accrue at
the rate of 9 1/2% per annum and will be payable semi-annually in arrears on
March 1 and September 1 of each year, commencing on September 1, 1997 (each
such date, an "Interest Payment Date"), to Holders of record on the immediately
preceding February 15 and August 15. Interest on the Senior Subordinated Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Principal of, interest on, Liquidated Damages, if any, or other premiums, if
any, on the Senior Subordinated Notes will be payable at the office or agency
of the Company maintained for such purpose or, at the option of the Company,
payment of interest and, Liquidated Damages or other premiums, if any, may be
made by check mailed to the Holders of the Senior Subordinated Notes at their
respective addresses set forth in the register of Holders of Senior
Subordinated Notes; provided that all payments with respect to Senior
Subordinated Notes, the Holders of which have given wire transfer instructions
to the Company, will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof. Until
otherwise designated by the Company, the Company's office or agency will be the
office of the Trustee maintained for such purpose. The Senior Subordinated
Notes will be issued in denominations of $1,000 and integral multiples thereof.
2. METHOD OF PAYMENT. The Company will pay interest on the Senior
Subordinated Notes (except defaulted interest) and, Liquidated Damages, if any,
or any other premiums, if any, to the Persons who are registered Holders of
Senior Subordinated Notes at the close of business on the February 15 or August
15 next preceding the Interest Payment Date, even if such Senior Subordinated
Notes are cancelled after such record date and on or before such Interest
Payment Date, except as provided in Section 2.12 of the Indenture with respect
to defaulted interest. Payments in respect of the Senior Subordinated Notes
represented by the Global Note (including principal, premium, interest and
liquidated damages, if any) be made by wire transfer of immediately available
funds to the accounts specified by the Global Note Holder. With respect to
Certificated Notes, the Company will make all payments in respect of the Senior
Subordinated Notes (including principal, premium, interest and liquidated
damages, if any), by wire transfer of immediately available funds to the
accounts specified by the Holders thereof or, if no such account is specified,
by mailing a check to each such Holder's registered address. Such payment shall
be in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Senior Subordinated Notes under
an Indenture dated as of February 27, 1997 ("Indenture") between the Company
and the Trustee. The terms of the Senior Subordinated Notes include those
stated in the Indenture and those made part of the Indenture by reference to
the Trust Indenture Act of 1939, as amended (15 U.S. Code [section][section]
77aaa-77bbbb). The Senior Subordinated Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. The Senior Subordinated Notes are unsecured obligations of the Company
limited to $120.0 million in aggregate principal amount and will mature on
March 1, 2007.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in clauses (b) and (c) of this paragraph 5,
the Senior Subordinated Notes will not be redeemable at the Company's option
prior to March 1, 2002. Thereafter, the Senior Subordinated Notes will be
subject to redemption at the option of the Company, in whole or in
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part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on March 1 of the years indicated below:
YEAR PERCENTAGE
2002.......................................... 104.750%
2003.......................................... 103.166%
2004.......................................... 101.583%
2005 and thereafter........................... 100.0%
(b) Notwithstanding the foregoing, at any time prior to March 1, 2000,
the Company may redeem up to one-third in aggregate principal amount of Senior
Subordinated Notes at a redemption price of 109.5% of the principal amount
thereof, in each case plus accrued and unpaid interest and Liquidated Damages,
if any, to the redemption date, with the net proceeds of any Public Offering of
Common Stock of the Company; provided that at least two-thirds in aggregate
principal amount of the Senior Subordinated Notes originally issued under this
Indenture remain outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 60
days following the date of the closing of such Public Offering.
(c) Upon the occurrence of a Change of Control prior to March 1, 2002,
the Company, at its option, may redeem all, but not less than all, of the
outstanding Senior Subordinated Notes at a redemption price equal to 100% of
the principal amount thereof plus the applicable Make-Whole Premium (a "Change
of Control Redemption"). The Company shall give not less than 30 nor more than
60 days' notice of such redemption within 30 days following a Change of
Control.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption or sinking fund payments with respect to
the Senior Subordinated Notes.
7. REPURCHASE AT OPTION OF HOLDER.
Upon the occurrence of a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to repurchase all or
any part (equal to $1,000 or an integral multiple thereof) of each Holder's
Senior Subordinated Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of repurchase (the "Change of
Control Payment"). Within ten days following any Change of Control, the Company
will mail a notice to each Holder describing the transaction that constitutes
the Change of Control and offering to repurchase the Senior Subordinated Notes
pursuant to the procedures required by the Indenture and described in such
notice; provided that, prior to complying with the applicable provisions of the
Indenture, but in any event within 90 days following a Change of Control, the
Company will either repay all outstanding Senior Debt or obtain the requisite
consents, if any, under all agreements governing outstanding Senior Debt to
permit the repurchase of Senior Subordinated Notes required by the Indenture.
The Company will comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of the
Senior Subordinated Notes as a result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the extent
lawful, (i) accept for payment all Senior Subordinated Notes or portions
thereof properly tendered pursuant to
A-4
the Change of Control Offer, (ii) deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all Senior Subordinated Notes or
portions thereof so tendered and (iii) deliver or cause to be delivered to the
Trustee the Senior Subordinated Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Senior Subordinated Notes
or portions thereof being purchased by the Company. The Paying Agent will
promptly mail to each Holder of Senior Subordinated Notes so tendered the
Change of Control Payment for such Senior Subordinated Notes and the Trustee
will promptly authenticate and mail (or cause to be transferred by book entry)
to each Holder a new Senior Subordinated Note equal in principal amount to any
unpurchased portion of the Senior Subordinated Notes surrendered, if any;
provided, that each such new Senior Subordinated Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Senior Subordinated Notes validly tendered and not
withdrawn under such Change of Control Offer.
When the aggregate amount of Excess Proceeds exceeds $5.0 million (an
"Excess Proceeds Offer Triggering Event"), the Company shall make an offer to
all Holders of Senior Subordinated Notes (an "Asset Sale Offer") to purchase
the maximum principal amount of Senior Subordinated Notes that may be purchased
out of the Excess Proceeds, at an offer price in cash in an amount equal to
100% of the principal amount thereof plus accrued and unpaid interest and
Liquidated Damages if any, thereon to the date of purchase, in accordance with
the procedures set forth in Sections 3.09 hereof and Section 4.10 of the
Indenture. To the extent that the aggregate amount of Senior Subordinated Notes
tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate purposes
(subject to the restrictions of this Indenture). If the aggregate principal
amount of Senior Subordinated Notes surrendered by Holders thereof exceeds the
amount of Excess Proceeds, the Trustee shall select the Senior Subordinated
Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
8. 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
whose Senior Subordinated Notes are to be redeemed at its registered address.
Senior Subordinated Notes in denominations larger than $1,000 may be redeemed
in part but only in whole multiples of $1,000, unless all of the Senior
Subordinated Notes held by a Holder are to be redeemed. On and after the
redemption date interest ceases to accrue on Senior Subordinated Notes or
portions thereof called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Senior Subordinated Notes
are in registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Senior Subordinated Notes may be
registered and Senior Subordinated Notes may be exchanged as provided in the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Senior Subordinated Note or portion of a Senior Subordinated
Note selected for redemption, except for the unredeemed portion of any Senior
Subordinated Note being redeemed in part. Also, it need not exchange or
register the transfer of any Senior Subordinated Notes for a period of 15 days
before a selection of Senior Subordinated Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
A-5
10. PERSONS DEEMED OWNERS. The registered Holder of a Senior
Subordinated Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture or the Senior Subordinated Notes may be amended or supplemented
with the consent of the Holders of at least a majority in aggregate principal
amount of the then outstanding Senior Subordinated Notes, and any existing
default or compliance with any provision of the Indenture or the Senior
Subordinated Notes may be waived with the consent of the Holders of a majority
in aggregate principal amount of the then outstanding Senior Subordinated
Notes. Without the consent of any Holder of a Senior Subordinated Note, the
Indenture or the Senior Subordinated Notes may be amended or supplemented to
cure any ambiguity, defect or inconsistency, to provide for uncertificated
Senior Subordinated Notes in addition to or in place of certificated Senior
Subordinated Notes, to provide for the assumption of the Company's obligations
to Holders of the Senior Subordinated Notes in the case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Senior Subordinated Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for
30 days in the payment when due of interest on the Senior Subordinated Notes;
(ii) default in payment when due of the principal of or premium or Liquidated
Damages, if any, on the Senior Subordinated Notes; (iii) failure by the Company
to comply with Sections 4.07, 4.09, 4.10 and 4.14 of the Indenture; (iv)
failure by the Company for 30 days after notice to comply with any of its other
agreements in the Indenture or the Senior Subordinated Notes; (v) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, or interest on such Indebtedness prior to the expiration of
the grace period provided in respect of such Indebtedness (a "Payment Default")
or (b) results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more; (vi) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments aggregating in excess
of $5.0 million and either (a) any creditor commences enforcement proceedings
upon any such judgment or (b) such judgments are not paid, discharged or stayed
for a period of 45 days; and (vii) certain events of bankruptcy or insolvency
with respect to the Company or any of its Restricted Subsidiaries.
If any Event of Default (other than an Event of Default specified in
clause (vii) above) occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Senior Subordinated Notes
may declare all the Senior Subordinated Notes to be due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of Default
specified in clause (vii) above, all outstanding Senior Subordinated Notes will
become due and payable without further action or notice. Holders of Senior
Subordinated Notes may not enforce the Indenture or the Senior Subordinated
Notes except as provided in the Indenture. Subject to certain limitations, the
Holders of a majority in aggregate principal amount of the then outstanding
Senior Subordinated Notes, by written notice to the Trustee, may on behalf of
the Holders rescind an acceleration and its consequences if the rescission
would not conflict with any judgment or decree and if all Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of acceleration) have been cured or waived. The Trustee may withhold
from Holders of the Senior Subordinated Notes notice of any continuing Default
or Event of Default (except a Default or Event
A-6
of Default relating to the payment of principal or interest) if it determines
that withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Senior Subordinated
Notes pursuant to the optional redemption provisions of the Indenture, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law upon the acceleration of the Senior Subordinated Notes.
If an Event of Default occurs prior to March 1, 2002 by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding the prohibition on redemption of the Senior
Subordinated Notes prior to such date, then, upon acceleration of the Senior
Subordinated Notes, an additional premium shall also become immediately due and
payable to the extent permitted by law.
The Holders of a majority in aggregate principal amount of the Senior
Subordinated Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Senior Subordinated Notes waive any existing Default
or Event of Default and its consequences under the Indenture, except a
continuing Default or Event of Default in the payment of the principal of or
premium, interest or Liquidated Damages, if any, on the Senior Subordinated
Notes, including in connection with an offer to purchase; provided, however,
that the Holders of a majority in aggregate principal amount of the then
outstanding Senior Subordinated Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such
acceleration.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Senior Subordinated
Notes or the Indenture or for any claim based on, in respect of, or by reason
of, such obligations or their creation. Each Holder by accepting a Senior
Subordinated Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Senior
Subordinated Notes.
15. AUTHENTICATION. This Senior Subordinated Note shall not be valid
until authenticated by the manual signature of the Trustee or an authenticating
agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name of
a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In
addition to the rights provided to Holders of Senior Subordinated Notes under
the Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreement dated as of February __,
1997 between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
A-7
18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Senior Subordinated Notes and the Trustee
may use CUSIP numbers in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers either as printed on
the Senior Subordinated Notes 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 Holder upon written request and
without charge a copy of the Indenture, and/or the Registration Rights
Agreement. Requests may be made to:
The Xxxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
A-8
ASSIGNMENT FORM
To assign this Senior Subordinated Note, fill in the form below: (I)
or (we) assign and transfer this Senior Subordinated Note to
(Insert assignee's soc. sec. or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint
to transfer this Senior Subordinated Note on the books of the Company. The
agent may substitute another to act for him.
Date:
Your Signature:
(Sign exactly as your name appears on the
face of this Senior Subordinated Note)
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the [Registrar], which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
[Registrar] in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Senior Subordinated Note purchased
by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the box
below:
[ ] Section 4.10 [ ] Section 4.14
If you want to elect to have only part of the Senior Subordinated Note
purchased by the Company pursuant to Section 4.10 or Section 4.14 of the
Indenture, state the amount you elect to have purchased: $___________
Date: Your Signature:
(Sign exactly as your name appears on the
Senior Subordinated Note)
Tax Identification No.:
Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the [Registrar], which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the
[Registrar] in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-10
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE (2)
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Signature of
Principal Amount of this authorized officer of
Amount of decrease in Amount of increase in Global Note Trustee or Senior
Principal Amount of Principal Amount of following such decrease Subordinated Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
-------------------- ----------------------- ----------------------- -------------------------- -----------------------
--------------
2 This should be included only if the Senior Subordinated Note is issued in
global form.
A-11
===============================================================================
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER
OF SENIOR SUBORDINATED NOTES
Re: 9 1/2% Senior Subordinated Notes due 2007 of The Xxxxx Group, Inc.
This Certificate relates to $_____ principal amount of Senior
Subordinated Notes held in * ________ book-entry or *_______ definitive form by
________________ (the "Transferor").
The Transferor*:
[ ] has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Note held by the Depositary a Senior
Subordinated Note or Senior Subordinated Notes in definitive, registered form
of authorized denominations in an aggregate principal amount equal to its
beneficial interest in such Global Note (or the portion thereof indicated
above); or
[ ] has requested the Trustee by written order to exchange or register
the transfer of a Senior Subordinated Note or Senior Subordinated Notes.
In connection with such request and in respect of each such Senior
Subordinated Note, the Transferor does hereby certify that Transferor is
familiar with the Indenture relating to the above captioned Senior Subordinated
Notes and as provided in Section 2.06 of such Indenture, the transfer of this
Senior Subordinated Note does not require registration under the Securities Act
(as defined below) because:*
[ ] Such Senior Subordinated Note is being acquired for the
Transferor's own account, without transfer (in satisfaction of Section
2.06(a)(ii)(A) or Section 2.06(d)(i)(A) of the Indenture).
[ ] Such Senior Subordinated Note is being transferred to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in reliance on Rule 144A (in satisfaction of
Section 2.06(a)(ii)(B), Section 2.06(b)(A) or Section 2.06(d)(i) (B) of the
Indenture) or pursuant to an exemption from registration in accordance with
Rule 904 under the Securities Act (in satisfaction of Section 2.06(a)(ii)(B) or
Section 2.06(d)(i)(B) of the Indenture.)
--------------
* Check applicable box.
B-1
[ ] Such Senior Subordinated Note is being transferred in accordance
with Rule 144 under the Securities Act, or pursuant to an effective
registration statement under the Securities Act (in satisfaction of
Section 2.06(a)(ii)(B) or Section 2.06(d)(i)(B) of the Indenture).
[ ] Such Senior Subordinated Note is being transferred in reliance
on and in compliance with an exemption from the registration requirements of
the Securities Act, other than Rule 144A, 144 or Rule 904 under the Securities
Act. An Opinion of Counsel to the effect that such transfer does not require
registration under the Securities Act accompanies this Certificate (in
satisfaction of Section 2.06(a)(ii)(C) or Section 2.06(d)(i)(C) of the
Indenture).
-----------------------------------
Name of Transferor:
By:
--------------------------------
Date:
-----------------------------
---------------
* Check applicable box.
B-2
EXHIBIT C
FORM OF SUBSIDIARY GUARANTEE
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantee to each Holder of a Senior Subordinated Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Senior
Subordinated Notes or the obligations of the Company hereunder or thereunder,
that: (a) the principal, interest, premium and Liquidated Damages, if any, on
the Senior Subordinated Notes will be promptly paid in full when due, whether
at maturity, by acceleration, redemption or otherwise, and interest on the
overdue principal, interest, premium and Liquidated Damages, if any, on the
Senior Subordinated Notes, if any, if lawful, and all other Obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof
and thereof; and (b) in case of any extension of time of payment or renewal
of any Senior Subordinated Notes or any of such other obligations, that same
will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same
immediately.
The Obligations of the Guarantors to the Holders of the Senior
Subordinated Notes and to the Trustee pursuant to this Subsidiary Guarantee and
the Indenture are expressly set forth in Article 12 of the Indenture, and
reference is hereby made to such Indenture for the precise terms of this
Subsidiary Guarantee. The terms of Article 12 of the Indenture are
incorporated herein by reference.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full
and final payment of all of the Company's Obligations under the Senior
Subordinated Notes and the Indenture and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders of Senior Subordinated
Notes and, in the event of any transfer or assignment of rights by any Holder
of Senior Subordinated Notes or the Trustee, the rights and privileges herein
conferred upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This is
a Subsidiary Guarantee of payment and not a guarantee of collection.
In certain circumstances more fully described in the Indenture, any
Guarantor may be released from its liability under
this Subsidiary Guarantee, and any such release will be effective whether or
not noted hereon.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Senior Subordinated Note upon
which this Subsidiary Guarantee is noted shall have been executed by the
Trustee under the Indenture by the manual signature of one of its authorized
officers.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
By:
Name:
Title:
2
EXHIBIT D
------------------------------------------------------------------------------
The Xxxxx Group, Inc.
and
the Guarantors named herein
and
The Bank of New York
Trustee
--------------------
FORM OF SUPPLEMENTAL INDENTURE
AND AMENDMENT -- SUBSIDIARY GUARANTEE
Dated as of ,
--------------------
$120,000,000
9 1/2% Senior Subordinated Notes
due 2007
------------------------------------------------------------------------------
This SUPPLEMENTAL INDENTURE dated as of , , among THE
XXXXX GROUP, INC., a Delaware corporation (the "Company"), each party
identified under the caption "Guarantor" on the signature pages hereto (the
"Guarantor") and The Bank of New York, a New York banking corporation, as
Trustee.
RECITALS
WHEREAS, the Company, any and all Guarantors and the Trustee entered
into an Indenture, dated as of , 1997 (the "Indenture"), pursuant to
which the Company issued $120,000,000 in principal amount of . % Senior
Subordinated Notes due 2007 (the "Senior Subordinated Notes"); and
WHEREAS, Section 9.01(e) of the Indenture provides that the Company,
the Guarantors, if any, and the Trustee may amend or supplement the Indenture
in order to execute a Subsidiary Guarantee to comply with Section 12.01 thereof
without the consent of the Holders of the Senior Subordinated Notes; and
WHEREAS, pursuant to Section 12.01 of the Indenture, a Guarantor
must execute a Subsidiary Guarantee and a Supplemental Indenture.
WHEREAS, all acts and things prescribed by the Indenture, by law and
by the Certificate of Incorporation and the Bylaws of the Company, the
Guarantor and of the Trustee necessary to make this Supplemental Indenture a
valid instrument legally binding on the Company, the Guarantor and the Trustee,
in accordance with its terms, have been duly done and performed;
NOW THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Guarantor, and the
Trustee covenant and agree for the equal and proportionate benefit of the
respective Holders of the Senior Subordinated Notes as follows:
ARTICLE 1.
Section 1.01. This Supplemental Indenture is supplemental to the
Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes.
- 1 -
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Guarantor, and the Trustee.
ARTICLE 2.
Section 2.01. From this date, in accordance with Section 12.01 and by
executing this Supplemental Indenture and the accompanying Subsidiary Guarantee
(a copy of which is attached hereto), the Guarantor(s) whose signature appears
below is subject to the provisions of the Indenture to the extent provided for
in Article 12 thereunder.
Section 2.02. The Subsidiary Guarantee constitutes a part of the
Senior Subordinated Note as soon as the certificate of authentication has been
executed by the Trustee.
ARTICLE 3.
Section 3.01. Except as specifically modified herein, the Indenture
and the Senior Subordinated Notes are in all respects ratified and confirmed
(mutatis mutandis) and shall remain in full force and effect in accordance with
their terms with all capitalized terms used herein without definition having
the same respective meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein, no
duties, responsibilities or liabilities are assumed, or shall be construed to
be assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
Section 3.03. The laws of the State of New York shall govern this
Supplemental Indenture without regard to principles of conflicts of law. The
Trustee, the Company and the Guarantor each agree to submit to the jurisdiction
of the courts of the State of New York in any action or proceeding arising out
of or relating to this Supplemental Indenture.
Section 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
-2-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
THE XXXXX GROUP, INC.
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
GUARANTOR
[ ]
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
TRUSTEE
THE BANK OF NEW YORK, as Trustee
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-3-
