EXHIBIT T3C
BDK Holdings, Inc.
9% Senior Notes due 2007
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Indenture
Dated as of February ___, 2002
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The Bank of New York
Trustee
INDENTURE dated as of February ____, 2002 between BDK Holdings, Inc.,
a Delaware corporation ("Company"), and The Bank of New York, a national banking
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association ("Trustee").
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Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of (a) the Holders of the Company's 9% Senior
Notes due 2007 and (b) if and when issued in payment of interest otherwise
payable in cash, additional 9% Senior Notes due 2007 (the foregoing
collectively, from their respective dates of issuance, "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
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"Affiliate" means any Person directly or indirectly controlling
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or controlled by or under direct or indirect common control with the Company.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "affiliated," "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent, co-registrar or
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co-paying agent.
"Applicable Procedures" means, with respect to any transfer or
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transaction involving a Global Note or beneficial interest therein, the rules
and procedures of the Depositary, to the extent applicable to such transaction
and as in effect from time to time.
"Board of Directors" means the Board of Directors of the Company
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or any authorized committee of the Board.
"Business Day" is any day which is not a Legal Holiday and
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consists of the time period from 12:01 a.m. through 12:00 midnight Eastern time.
"Change of Control" means the occurrence of any of the following:
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(1) the sale, 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 Subsidiaries, taken as a whole, to any "person" (as such term
is used in Section 13(d)(3) of the Securities Exchange Act) other than
to a Permitted Holder;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company;
(3) the consummation of any transaction or a series of related
transactions (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as defined
above), other than a Permitted Holder, becomes the
beneficial owner (within the meaning of Rules 13d-3 and 13d-5 under
the Securities Exchange Act), directly or indirectly, of a majority of
the voting power of the voting stock of the Company; or
(4) after the Issue Date, the first day on which a majority of
the members of the Board of Directors of the Company are not
Continuing Directors;
Notwithstanding the foregoing, a Change of Control shall not be deemed
to have occurred with respect to any event that otherwise would be a "Change of
Control" to the extent that such event occurs as a result of a disbursement of
securities from the Papercraft Fund in connection with the settlement, court
adjudication, or other resolution, of the CVC Litigation.
"Common Stock" means the common stock, $.01 par value, of the
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Company.
"Company" means the party named as such above until a successor
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replaces it and thereafter means the successor.
"Consolidated Adjusted Net Income" means as to any Person for any
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period the aggregate of the Net Income of such Person and its subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP,
provided that:
(1) the Net Income (including any loss) of any Person which is
not a subsidiary of the Person calculating Consolidated Net Income or
is accounted for by such Person by the equity method of accounting
shall be included only to the extent of the amount of dividends or
Distributions actually paid to such Person; and
(2) the Net Income (including any loss) of any Person acquired
in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded.
The "Net Income" of any Person shall mean the net income (loss) of such Person,
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determined in accordance with GAAP, except that with respect to any business
combination occurring on or after February 13, 1992, no effect shall be given to
adjustments to the historical book value of an acquired company's consolidated
assets and liabilities required or permitted by Accounting Principles Board
Opinion Numbers 6 and 17; furthermore, (i) any gain (but not loss) realized upon
the sale or other disposition of any capital stock of the Person or a subsidiary
owned by such Person, or (ii) any gain (but not loss) realized upon the sale or
other disposition of any real property or equipment of such Person which is not
sold in the ordinary course of business shall be excluded from the determination
of Net Income of such Person.
"Consolidated Adjusted Net Worth" means the consolidated equity
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of the holders of the stock of the Company and its consolidated Subsidiaries,
all determined on a consolidated basis in accordance with GAAP, except that such
consolidated equity shall be determined giving effect to the methods of
accounting set forth in the definition of "Consolidated Adjusted Net Income" and
"Net Income" contained herein.
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"Continuing Directors" means, as of any date of determination,
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any member of the Board of Directors of the Company who:
(1) was a member of the Board of Directors on the Issue Date; or
(2) was nominated for election or elected to the Board of
Directors with the approval of a majority of the Continuing Directors
who were members of the Board of Directors at the time of such
nomination or election or whose election or appointment was previously
so approved.
"Credit Facility" means any credit facility between Xxxxx &
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Xxxxxxxx of California and/or the Company and/or its Subsidiaries, on the one
hand, and Union Bank of California, N.A., on the other hand, providing for
revolving credit loans, term loans and/or letters of credit or other borrowing
facilities, as amended, restated, modified, renewed, refunded, replaced, or
refinanced, with the same or a new lender or group of lenders, in whole or in
part from time to time.
"CVC Litigation" means the adversary proceeding entitled
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Committee of Creditors Holding Unsecured Claims and Committee of Creditors
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Holding Unsecured Claims as Estate Representative of Papercraft Corporation v.
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Citicorp Venture Capital, Ltd (In re Papercraft Corporation), Adv. No. 91-2642
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and any and all appeals thereof and related proceedings.
"Default" means any event which is, or after notice or passage of
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time would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the
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name of the Holder thereof and issued in accordance with Section 2.07,
substantially in the form of Exhibit A hereto, except that such Note shall not
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bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Global Notes, the Person
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specified in Section 2.04 as the Depositary with respect to the Notes and any
and all successors thereto appointed as depositary hereunder and having become
such pursuant to the applicable provisions of this Indenture.
"Disqualified Stock" means capital stock of the Company or any
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Subsidiary which, by its terms (or by the terms of any security into which it
may be converted or for which it may be exchanged), or upon the happening of any
event, matures or is subject to mandatory redemption, pursuant to a sinking fund
obligation or otherwise, or redemption at the option of the holder, in whole or
in part, prior to the maturity date of the Notes.
"Distribution" means any distribution of cash, securities or
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other property.
"DTC" means The Depository Trust Company, a New York corporation.
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"EBIT" for any period means the Consolidated Adjusted Net Income
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for such period adjusted to exclude (to the extent included in computing such
Consolidated Adjusted Net Income) all (i) liabilities paid or accrued during
such period by the Company or a
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Subsidiary for taxes based on income or earnings, (ii) all Fixed Charges for
such period, (iii) with respect to any Subsidiary, any management fees paid by
the Company, and (iv) non-cash amortization of debt discount and expense with
respect to the Notes.
"Fixed Charge Coverage Ratio" as to any Person for any period,
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means the ratio of (i) EBIT for such period to (ii) Fixed Charges for such
period.
"Fixed Charges" as to any Person means (i) interest and, except
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with respect to the Notes, amortization of debt discount and expense, (ii) that
portion of rentals which is reasonably determined by the Board of Directors (as
evidenced by a duly adopted resolution) as representing interest costs with
respect to any lease of any property which would, in accordance with GAAP, be
required to be classified and accounted for on the balance sheet of the lessor
as a capital lease and (iii) dividend requirements of such Person and its
subsidiaries which are paid or accrued or are scheduled to be paid or accrued,
during such period and are attributable to Disqualified Stock (excluding in all
such cases items eliminated in consolidation). For purposes of clause (iii), the
dividend requirements attributable to Disqualified Stock shall be increased to
an amount representing the pre-tax earnings that would be required to cover such
dividend requirements; accordingly, the increased amount shall be equal to a
fraction, the numerator of which is the dividend requirements on such
Disqualified Stock and the denominator of which is 100% minus the applicable tax
rate of such Person and its subsidiaries on a consolidated basis.
"GAAP" means generally accepted accounting principles as in
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effect in the United States of America as of a date of determination.
"Global Note" means a Note that is deposited with or on behalf of
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and registered in the name of the Depositary or a nominee thereof.
"Global Note Legend" means the legend set forth in Section
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2.07(f), which is required to be placed on all Global Notes issued under this
Indenture.
"Government Securities" shall have the meaning set forth in
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Section 2(a)(16) of the Investment Company Act of 1940, as amended.
"Holder" means a Person in whose name a Note is registered.
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"Indebtedness" means any indebtedness, contingent or otherwise,
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in respect of borrowed money, including all interest, fees and expenses owed
with respect thereto (whether or not the recourse of the lender is to the whole
of the assets of the Company or only to a portion thereof), or evidenced by
bonds, notes, debentures or similar instruments or letters of credit, or
representing the balance (except any such balance that constitutes a trade
payable) deferred and unpaid of the purchase price of any property (including
pursuant to financing leases) or interest therein, in the case of each type of
indebtedness listed above, if and to the extent such indebtedness would appear
as a liability upon a balance sheet of the Company prepared on a consolidated
basis in accordance with GAAP, and shall also include, to the extent not
otherwise included, the guaranty of items which would be included within this
definition.
"Indenture" means this Indenture as amended from time to time.
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"Indirect Participant" means a Person who holds a beneficial
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interest in a Global Note through a Participant.
"Initial Notes" means Notes issued on the Issue Date.
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"Issue Date" means February ___, 2002.
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"Key Executive Stock Plan" means that certain BDK Holdings, Inc.
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1994 Key Executive Stock Purchase Plan, pursuant to which certain key employees
of the Company and its Subsidiaries may purchase shares of the Company's Common
Stock.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or
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adverse claim affecting title or resulting in an encumbrance against real or
personal property (other than any adverse claim or encumbrance which has not
been granted by the Company or any of its Subsidiaries and which is being
disputed in good faith), or a security interest of any kind (including any
conditional sale or other title retention agreement, or lease in the nature
thereof, and any filing of or agreement to give any financing statement under
the Uniform Commercial Code or equivalent statutes of any jurisdiction).
"Material Subsidiary" means a Subsidiary of the Company, which is
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a "significant subsidiary" as defined in Rule 1-02(v) of Regulation S-X
promulgated under the Securities Exchange Act.
"Notes" means the Notes described in the preamble to this
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Indenture which have been issued hereunder.
"Officer's Certificate" means a certificate signed by one
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Officer, who shall be the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer, the Treasurer or a Senior
Vice-President of the Company and that otherwise complies with the requirements
of Sections 10.04 and 10.05 hereof.
"Opinion of Counsel" means a written opinion, from legal counsel
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who is acceptable to the Trustee, that complies with the requirements of
Sections 10.04 and 10.05 hereof. The counsel may be an employee of or counsel to
the Company or the Trustee.
"Papercraft Fund" means the Disbursing Fund as defined in the
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Company's Plan of Reorganization Dated October 15, 1991, As Amended December 17,
1991, which was confirmed on January 22, 1992 in Case No. 91-903JKF by the
United States Bankruptcy Court for the Western District of Pennsylvania.
"Participant" means, with respect to the Depositary, a Person who
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has an account with the Depositary.
"Permitted Holder" means Magten Asset Management Corp. and any
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Related Party of the foregoing.
"Permitted Liens" means (i) Liens solely to secure any
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Indebtedness, so long as such Indebtedness is permitted under Section 4.06; (ii)
Liens for taxes, assessments, governmental charges, or levies not delinquent or
which the Company or any of its
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Subsidiaries is in good faith and by appropriate proceedings contesting and for
which an adequate reserve has been established in accordance with GAAP, (iii)
deposits, pledges or other items to secure obligations under worker's
compensation, social security or similar laws, or under unemployment insurance,
(iv) indemnity, performance or other similar bonds or deposits, pledges or other
items to secure bids, tenders, contracts (other than contracts for the payment
of money), statutory obligations, surety and appeal bonds and other obligations
of like nature, in each case arising in the ordinary course of business, (v)
interests of landlords or other lessors under leases of real or personal
property (tangible or intangible), statutory Liens of landlords and mechanics',
workmen's, materialmen's, carriers' or warehousemen's or other like Liens
arising in the ordinary course of business with respect to obligations which are
not due or which the Company or any of its Subsidiaries is in good faith and by
appropriate proceedings contesting and for which an adequate reserve has been
established in accordance with GAAP, (vi) any other Lien, perfected and in
effect as of the date of this Indenture, and (vii) extensions, renewals or
replacements of any Lien referred to in paragraphs (i) through (vi) above,
provided that any such extension, renewal or replacement is limited to the
property (including any proceeds therefrom) originally encumbered thereby.
"PIK Notes" means the Company's 9% Senior Notes due 2007, if and
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when issued in payment of interest otherwise payable in cash.
"Person" means any individual, corporation, partnership, joint
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venture, association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal" of an indebtedness security means the principal of
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the security plus the premium, if any, on the security.
"Related Party" means:
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(1) the spouse or an immediate family member, estate or heir of
a Permitted Holder; or
(2) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of the
Permitted Holder and/or such other Persons referred to in the
immediately preceding clause (1).
"SEC" means the Securities and Exchange Commission.
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"Securities Act" means the Securities Act of 1933, as amended.
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"Subsidiary" means any Person of which at least a majority of
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capital stock having ordinary voting power for the election of directors or
other governing body of such Person is owned by the Company directly or through
one or more subsidiaries.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Codes(S)(S).
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77aaa-77bbbb) as in effect on the date of execution of this Indenture.
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"Trustee" means the party named as such above until a successor
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replaces it and thereafter means the successor.
"Trust Officer" means any officer of the Trustee's Corporate
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Trust Department or any officer assigned by the Trustee to administer its
corporate trust matters.
"U.S. Legal Tender" means such coin or currency of the United
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States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and shall be in the form of immediately
available funds.
Section 1.02. Other Definitions.
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Defined in
Term Section
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"Alternate Offer" 4.08
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"Bankruptcy Law" 6.01
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"Change of Control Payment" 4.08
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"Custodian" 6.01
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"Default Occurrence" 4.03
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"Event of Default" 6.01
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"Legal Holiday" 10.07
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"Offer" 4.08
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"Offer Period" 4.08
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"Officer" 10.10
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"Paying Agent" 2.04
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"Redemption Date" 4.08
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"Registrar" 2.04
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"Restricted Payments" 4.05
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"Securities Exchange Act" 4.02
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Section 1.03. Incorporation by Reference of Trust Indenture Act.
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Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
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"indenture security holder" means a Holder;
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"indenture to be qualified" means this Indenture;
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"indenture trustee" or "institutional trustee" means the Trustee;
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and
"obligor" on the Notes means the Company.
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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.
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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 in effect on the date of
execution of this Indenture;
(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;
(6) references to sections of or rules under the Securities Act
or the Securities Exchange Act shall be deemed to include substitute,
replacement of successor sections or rules adopted by the SEC from
time to time;
(7) references to any statute, law, rule or regulation shall be
deemed to refer to the same as from time to time amended and in effect
and to any successor statute, law, rule or regulation; and
(8) references to any contract, agreement or instrument shall
mean the same as amended, modified, supplemented or amended and
restated from time to time, in each case, in accordance with any
applicable restrictions contained in this Indenture.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
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(a) General. The Notes and the Trustee's certificate of
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authentication shall be substantially in the form of Exhibit A, which is part of
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this Indenture. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication.
(b) Global Notes. Notes issued in global form shall be
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substantially in the form of Exhibit A (including the Global Note Legend thereon
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and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A (but without the Global Note Legend thereon and without the "Schedule
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of Exchanges of Interests in the Global Note" attached
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thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding 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 aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee or the
custodian, at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.07.
Section 2.02. Denominations.
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The Notes may be issued in denominations of $1.00 or integral
multiples thereof.
Section 2.03. Execution and Authentication.
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One Officer shall sign the Notes for the Company by manual or
facsimile signature. The Company's seal shall be reproduced on the Notes.
If an Officer or an Assistant Secretary whose signature is on a
Note no longer holds that office at the time the Note is authenticated, the Note
shall nevertheless be valid.
A Note shall not be valid until authenticated by manual signature
of the Trustee. The signature shall be conclusive evidence that the Note has
been authenticated under this Indenture.
The Trustee shall authenticate Notes from time to time for
original issue up to the aggregate principal amount stated in paragraph 4 of the
Notes upon a written order of the Company signed by one Officer. Such order
shall specify the principal amount of the Notes to be authenticated, whether the
Notes are to be issued as one or more Global Notes and the date on which the
initial issue or any subsequent issue of Notes in payment of interest or for any
other reason, as the case may be, is to be authenticated. The aggregate
principal amount of Notes outstanding at any time may not exceed that amount
except as provided in Section 2.07.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.
Section 2.04. Registrar and Paying Agent.
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The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
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office or agency where Notes may be presented for payment ("Paying Agent"). The
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Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents and the term "Registrar"
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includes any co-registrar. The term "Paying Agent" includes any additional
paying agents. The Company may change any Paying Agent, Registrar or
co-registrar without notice to any Holder. The Company shall notify the Trustee
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 Registrar, co-registrar or Paying Agent.
The Company initially appoints the DTC to act as Depositary with
respect to the Global Notes.
Section 2.05. Paying Agent to Hold Money in Trust.
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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 or interest on the Notes, and will notify the Trustee of
any failure by the Company in making any such payment. While any such failure
continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Company at any time may require a Paying Agent to pay all money
held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent
shall have no further liability for the money. If the Company 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 Paying Agent.
Section 2.06. Holder Lists.
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Pursuant to TIA (S) 312(a), 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 Holders. If the Trustee is not the Registrar, the
Company shall furnish to the Trustee in writing at least ten 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 Holders. The Trustee and the Registrar may
rely on the accuracy of such list as the same may be amended from time to time.
Section 2.07. Transfer and Exchange.
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(a) Transfer and Exchange of Global Notes. Global Notes may not
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be transferred as a whole except by the Depositary to a nominee of the
Depositary, by a nominee of the Depositary to the Depositary or to another
nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes
shall be exchanged by the Company for Definitive Notes if:
(i) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Securities Exchange Act and, in either case, a successor
Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary; or
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(ii) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for Definitive
Notes and delivers a written notice to such effect to the Trustee; or
(iii) there shall have occurred and be continuing a Default or
Event of Default with respect to the Notes.
Upon the occurrence of any of the preceding events in (i), (ii) or (iii)
above, Definitive Notes shall be issued in such names as the Depositary shall
instruct the Trustee. Global Notes also may be exchanged or replaced, in whole
or in part, as provided in Sections 2.08 and 2.11. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.07 or Sections 2.08 or 2.11, shall be authenticated
and delivered in the form of, and shall be, a Global Note. A Global Note may not
be exchanged for another Note other than as provided in this Section 2.07(a);
however, beneficial interests in a Global Note may be transferred and exchanged
as provided in Section 2.07(b) or (c).
(b) Transfer and Exchange of Beneficial Interests in the Global
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Notes. The transfer and exchange of beneficial interests in the Global Notes
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shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the Global
Notes shall be subject to any restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act. Transfers of
beneficial interests in the Global Notes also shall require compliance with
either clause (i) or (ii) below, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Notes.
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Beneficial interests in any Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Global Note. No written orders or instructions shall be required to be
delivered to the Registrar to effect the transfers described in this
Section 2.07(b)(i).
(ii) All Other Transfers and Exchanges of Beneficial Interests
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in Global Notes. In connection with all transfers and exchanges of
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beneficial interests that are not subject to Section 2.07(b)(i) above, the
transferor of such beneficial interest must deliver to the Registrar
either:
(A)(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures directing the Depositary to credit or cause to be credited
a beneficial interest in another Global Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(A)(2) instructions given in accordance with the Applicable
Procedures containing information regarding the Participant account to
be credited with such increase; or
(B)(1) a written order from a Participant or an Indirect
Participant given to the Depositary in accordance with the Applicable
Procedures
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directing the Depositary to cause to be issued a Definitive Note in an
amount equal to the beneficial interest to be transferred or
exchanged; and
(B)(2) instructions given by the Depositary to the Registrar
containing information regarding the Person in whose name such
Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above.
Upon satisfaction of all of the requirements for transfer or exchange of
beneficial interests in Global Notes contained in this Indenture and the Notes
or otherwise applicable under the Securities Act, the Trustee shall adjust the
principal amount of the relevant Global Note or Notes pursuant to Section
2.07(g).
(c) Transfer or Exchange of Beneficial Interests for Definitive
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Notes. If any holder of a beneficial interest in a Global Note proposes to
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exchange such beneficial interest for a Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon satisfaction of the conditions set forth in Section
2.07(b)(ii), the Trustee shall cause the aggregate principal amount of the
applicable Global Note to be reduced accordingly pursuant to Section 2.07(g),
and the Company shall execute and the Trustee shall authenticate and deliver to
the Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.07(c) shall be registered in such name or
names and in such authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions from the
Depositary and the Participant or Indirect Participant. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are so
registered.
(d) Transfer and Exchange of Definitive Notes for Beneficial
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Interests in Global Notes. A Holder of a Definitive Note may exchange such Note
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for a beneficial interest in a Global Note or transfer such Definitive Note to a
Person who takes delivery thereof in the form of a beneficial interest in a
Global Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Definitive Note and increase
or cause to be increased the aggregate principal amount of one of the Global
Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected at a time when no Global Note has yet been
issued, the Company shall issue and, upon receipt of a written order of the
Company signed by one Officer, in accordance with Section 2.03, the Trustee
shall authenticate one or more Global Notes in an aggregate principal amount
equal to the principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
--------------------------------------------------------------
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.07, the Registrar shall register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing.
-12-
A Holder of Definitive Notes may transfer such Notes to a Person who
takes delivery thereof in the form of a Definitive Note. Upon receipt of a
request to register such a transfer, the Registrar shall register the Definitive
Note pursuant to the instructions from the Holder thereof.
(f) Global Note Legend. Each Global Note shall bear a legend in
------------------
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE
BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
-
MAY BE REQUIRED PURSUANT TO SECTION 2.08 OF THE INDENTURE, (II) THIS GLOBAL
--
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a)
OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE
---
FOR CANCELLATION PURSUANT TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS
--
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR
WRITTEN CONSENT OF THE COMPANY. IN NO EVENT MAY ANY PORTION (LESS THAN ALL)
OF THIS GLOBAL NOTE IN A PRINCIPAL AMOUNT LESS THAN $1 (OR AN INTEGRAL
MULTIPLE THEREOF) BE TRANSFERRED."
(g) Cancellation and/or Adjustment of Global Notes. At such time as
----------------------------------------------
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.12. At any
time prior to such cancellation, if any beneficial interest in a Global Note is
exchanged for or transferred to a Person who will take delivery thereof in the
form of a beneficial interest in another Global Note or for Definitive Notes,
the principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and if the beneficial interest is being exchanged for or transferred to a Person
who will take delivery thereof in the form of a beneficial interest in another
Global Note, such other Global Note shall be increased accordingly and an
endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(h) General Provisions Relating to Transfers and Exchanges.
------------------------------------------------------
(1) Subject to clause (4) below, where Notes are presented to the
Registrar or a co-registrar with a request to register, transfer or
exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Global Notes and Definitive Notes upon the
Company's order or at the Registrar's request.
-13-
(2) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange.
(3) The Company shall not be required (i) to issue, register the
transfer of or exchange Notes during a period beginning at the opening of
15 days before the day of any selection of Notes for redemption under
Section 3.02 and ending at the close of business on the day of the mailing
of a notice of redemption, or (ii) to register the transfer of or exchange
any Note selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part.
(4) The Registrar or co-registrar will only honor requests to
register, transfer or exchange Notes in denominations of $1.00 (or integral
multiples thereof) unless the transfer of such Notes results from the
transfer by a Holder of its entire right, title and interest in any and all
Notes held by such Holder.
Section 2.08. Replacement Notes.
------------------
If a mutilated Note is surrendered to the Trustee or if the
Holder of a Note claims that the Note has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Note if the Trustee's requirements are met. If required by the Trustee or the
Company, such Holder must provide an indemnity bond, sufficient in the judgment
of both the Company and the Trustee, to protect the Company, the Trustee, any
Agent or any authenticating agent from any loss which any of them may suffer if
a Note is replaced. The Company and the Trustee may charge for their expenses in
replacing a Note.
Every replacement Note shall be a Note for all purposes hereof
from its date of issuance.
Section 2.09. Outstanding Notes.
------------------
The Notes outstanding at any time are all the 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 of this Indenture, and those described
in this Section as not outstanding.
If a Note is replaced pursuant to Section 2.08 hereof, it ceases
to be outstanding unless the Trustee and the Company receive proof satisfactory
to them that the replaced Note is held by a bona fide purchaser.
---- ----
If Notes are considered paid under Section 4.01 hereof or
redeemed pursuant to Article 3 hereof, they cease to be outstanding and interest
on them ceases to accrue.
Section 2.10. Treasury Notes.
---------------
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company or an Affiliate shall be considered as though they are not
outstanding, except that for the purposes
-14-
of determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes which a Trust Officer knows are so
owned shall be so disregarded.
The Company shall promptly advise the Trustee if the Company, or,
to the knowledge of the Company, any Affiliate of the Company, acquires any
Notes.
Section 2.11. Temporary Notes.
----------------
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Officer's Certificate,
shall authenticate temporary Notes. Temporary Notes shall be substantially in
the form of certificated Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Notes in exchange for temporary Notes.
Section 2.12. Cancellation.
-------------
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall dispose of cancelled
Notes as the Company directs. Subject to Section 2.08 hereof, the Company may
not issue new Notes to replace Notes that it has paid or that have been
delivered to the Trustee for cancellation.
Section 2.13. Defaulted Interest.
-------------------
If the Company fails to make a payment of interest on the Notes
(whether in cash or by issuance of PIK Notes) it shall pay such interest
thereafter in any lawful manner. It may pay such interest, plus, to the extent
lawful, any interest payable on it, to the Persons who are Holders on a
subsequent special record date. The Company shall fix the record date and
payment date for defaulted interest in a manner satisfactory to the Trustee,
unless the Trustee fixes a record or payment date with respect to such payment
pursuant to Section 6.10. At least 15 days before the record date, the Company
shall mail to Holders a notice that states the record date, payment date, and
amount of such interest to be paid.
ARTICLE 3
REDEMPTION
Section 3.01. Notices to Trustee.
-------------------
If the Company wants to redeem Notes pursuant to paragraph 5 of
the Notes, it shall notify the Trustee in writing of the redemption date and the
principal amount of Notes to be redeemed at least 30 days before and not more
than 60 days before the redemption date.
-15-
Section 3.02. Selection of Notes to be Redeemed.
----------------------------------
If less than all of the Notes are to be redeemed, the Trustee
shall select the Notes to be redeemed either pro rata or by lot, or by such
other method as the Trustee may deem fair and appropriate so long as such method
is not proscribed by the rules or regulations of any securities exchange on
which the Notes are then listed. The Company may also instruct the Trustee to
select some or all of the outstanding fractional securities for redemption at
any time pursuant to one of the above-described methods. The Company shall
notify the Trustee in writing of any securities exchanges on which the Notes are
listed.
Subject to the first paragraph of this Section 3.02, the Trustee
shall make the selection from the Notes outstanding and not previously called
for redemption and shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. The Trustee may select
for redemption portions of the principal of Notes. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called
for redemption.
Section 3.03. Notice of Redemption.
---------------------
At least 15 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption, which redemption may be
contingent upon the occurrence of specified events, to each Holder whose Notes
are to be redeemed.
The notice shall identify the Notes to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(6) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date, and upon surrender of such Note, a new Note or Notes in aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(7) if less than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed,
as well as the aggregate principal amount of Notes to be redeemed and the
aggregate principal amount of Notes estimated to be outstanding after such
partial redemption; and
-16-
(8) if the redemption is to be contingent upon the occurrence of
specified events, the conditions upon which redemption will occur.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.
Section 3.04. Effect of Notice of Redemption.
-------------------------------
Once a notice of redemption is mailed, Notes called for
redemption become due and payable on the redemption date at the redemption
price, unless such notice of redemption is contingent upon the occurrence of
specified events, in which case the Notes called for redemption shall become due
and payable only upon the occurrence of such events.
Section 3.05. Deposit of Redemption Price.
----------------------------
Prior to the redemption date, the Company shall deposit U.S.
Legal Tender in immediately available funds with the Paying Agent sufficient to
pay each of the redemption price of, accrued interest on, and any other amounts
owing pursuant to the terms of all Notes to be redeemed on that date. The Paying
Agent shall return to the Company any funds not required for that purpose.
Section 3.06. Notes Redeemed in Part.
-----------------------
Upon surrender of a Note that is redeemed in part, the Company
shall issue and the Trustee shall authenticate for the Holder a new Note equal
in principal amount to the unredeemed portion of the Note surrendered.
Section 3.07. Optional Redemption.
--------------------
The Company shall have the right to redeem the Notes, at its
option, pursuant to paragraph 5 of the Notes.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
-----------------
(a) The Company shall pay the principal of, interest on and any
other amounts owing pursuant to the terms of the Notes on the dates and in the
manner provided in the Notes and this Indenture. Principal and interest shall be
considered paid on the date due if the Paying Agent holds on that date U.S.
Legal Tender designated for and sufficient to pay all principal and interest
then due; provided, however, in the event that, as a result of the failure of
-------- -------
the Company and/or any of its Subsidiaries to satisfy the coverage ratio
covenant in the Credit Facility, the Company has not received from its
Subsidiaries, as of the Business Day immediately preceding any interest payment
date, distributions, dividends or advances in U.S. Legal Tender sufficient to
pay all interest due on a due date, then interest shall also be considered paid
on such interest payment date to the extent that the Company has paid all
-17-
interest due in U.S. Legal Tender to the extent that the Company has received
from its Subsidiaries U.S. Legal Tender therefor, and has issued to the Holders,
pro rata in accordance with the ratio of the aggregate principal amount of Notes
held by each Holder to the aggregate principal amount of Notes then outstanding,
on the applicable interest payment date, PIK Notes in an aggregate principal
amount equal to the amount of interest then due and payable and not paid in U.S.
Legal Tender.
(b) The Company shall pay interest on overdue principal,
compounded annually, at the rate borne by the Notes; it shall pay interest on
overdue installments of interest at the same rate, compounded annually, in each
case to the extent lawful.
Section 4.02. Reports.
--------
(a) The Company shall file with the Trustee, within 15 days
after it would have been required to file with the SEC, financial statements,
including any notes thereto (and, in the case of a fiscal year end, an auditors'
report by a firm of established national reputation reasonably satisfactory to
the Trustee), and a "Management's Discussion and Analysis of Financial Condition
and Results of Operations," both comparable to that which the Company would have
been required to include in such annual reports, information, documents or other
reports if the Company was subject to the requirements of such Section 13 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Securities
----------
Exchange Act"). The Trustee shall, promptly after the receipt of the documents
------------
described in the preceding sentence, mail such documents to the Holders at their
addresses appearing in the register of Notes maintained by the Registrar. The
Company also shall comply with the other provisions of TIA (S) 314(a).
(b) In the event that the Company becomes subject to the
requirements of Section 13 or 15(d) of the Securities Exchange Act, the Company
shall file with the Trustee and the SEC, and transmit to the Holders, such
information, documents and other reports, and such summaries thereof, as may be
required pursuant to the TIA at the times and in the manner provided pursuant to
the TIA; provided, that any such information, documents or reports required to
--------
be filed with the SEC pursuant to Section 13 or 15(d) of the Securities Exchange
Act shall be filed with the Trustee within 15 days after the same is so required
to be filed with the SEC.
Section 4.03. Compliance Certificate.
-----------------------
The Company shall deliver to the Trustee, within 90 days after
the end of each fiscal year of the Company, an Officer's Certificate stating
that a review of the activities of the Company and its Subsidiaries during the
applicable reporting period has been made under the supervision of the signing
Officer with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled in
all material respects each and every covenant contained in this Indenture and is
not in default in the performance or observance in any material respect of any
of the terms, provisions and conditions hereof (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he may have knowledge).
-18-
So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon becoming aware of (i) any Default, Event
of Default or default in the performance in any material respect of any
covenant, agreement or condition contained in this Indenture, (ii) any default
or event of default under any mortgage, indenture or other instrument, or (iii)
the acceleration of any Indebtedness as due and payable before its maturity
(each individually, a "Default Occurrence") an Officer's Certificate specifying
------------------
such Default Occurrence and the action that the Company proposes to take with
respect thereto.
The Trustee shall not be required pursuant to this Section 4.03
to make any independent investigation as to whether a Default Occurrence shall
have occurred and shall be entitled to assume that the Company is not aware of
any Default Occurrence until delivery by the Company to a trust officer of the
Trustee of such Officer's Certificate described above, unless the Trustee has
received notice to the contrary pursuant to Articles 6 or 10 hereof.
Section 4.04. Usury Laws.
-----------
The Company will not voluntarily claim and will actively resist
any attempts to claim the benefit of any stay, extension or usury laws against
the Holders of the Notes.
Section 4.05. Restricted Payments.
--------------------
The Company shall not and shall not permit any of its
Subsidiaries, directly or indirectly to effect any of the following:
(a) declare or pay any dividend or make any Distribution on its
capital stock or to its stockholders (other than dividends or Distributions
payable in its capital stock which is not Disqualified Stock or rights to
acquire such capital stock); or
(b) purchase, redeem, or otherwise acquire or retire for value
any of its capital stock or the capital stock of any Subsidiary or other
Affiliate or any warrants, rights or options to purchase or acquire such capital
stock or permit any Subsidiary to do so; provided, however, that this clause (b)
-------- -------
shall not prohibit the purchase, redemption or other acquisition or retirement
for value of the Company's Common Stock pursuant to the Key Executive Stock Plan
or agreements thereunder; or
(c) make any loan or advance to any Affiliate other than the
Company or a wholly owned Subsidiary of the Company; provided, however, that
-------- -------
this clause (c) shall not prohibit the making of (i) any loan or advance to
employees of the Company to acquire shares of the Company's Common Stock
pursuant to the Key Executive Stock Plan, (ii) other advances made to employees
of the Company in the ordinary course of business or (iii) other loans or
advances not exceeding $1,000,000 in the aggregate at any time outstanding; or
(d) purchase, redeem, exchange or otherwise acquire for value
any Indebtedness subordinated to the Notes; provided, however, that this clause
-------- -------
(d) shall not prohibit the refunding, redemption or refinancing of subordinated
Indebtedness permitted under Section 4.06 hereof.
-19-
(all such payments and other actions set forth in clauses (a) through
(d) above being collectively referred to as "Restricted Payments"), unless, at
---------- --------
the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(2) such Restricted Payment, together with the aggregate amount
of all other Restricted Payments made by the Company and its Material
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (2), (4), (5) and (6) of the next
paragraph) is less than the sum, without duplication, of:
(i) 50% of the Consolidated Adjusted Net Income of the
Company for the period (taken as one accounting period) from the
beginning of the first fiscal quarter commencing after the date of
this Indenture to the end of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Adjusted
Net Income for such period is a deficit, less 100% of such deficit);
and
(ii) 100% of the aggregate net cash proceeds received by
the Company since the date of this Indenture as a contribution to its
equity capital or from the issue or sale of capital stock of the
Company (other than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Company that have been converted
into or exchanged for such capital stock (other than capital stock,
Disqualified Stock or debt securities sold to a Subsidiary of the
Company).
The preceding provisions shall not prohibit:
(1) the purchase by the Company from its wholly-owned
Subsidiary, Xxxxx & Xxxxxxxx of California, on or about the Issue
Date, of Common Stock of the Company, together with Notes, for an
aggregate purchase price consisting of a subordinated promissory
note of the Company in the face amount not to exceed $400,000,
together with interest payments thereon;
(2) the payment by any Subsidiary of any dividend, or the making
by any Subsidiary of any Distribution, on its capital stock to the
Company;
(3) the payment by the Company of any dividend 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;
(4) the redemption, repurchase, retirement, defeasances or other
acquisition of any subordinated Indebtedness of the Company in
exchange for, or out of the net proceeds of, the substantially
concurrent issuance or sale (other than to a Subsidiary) of capital
stock of the Company (other than Disqualified Stock) or the
substantially concurrent issuance, sale or incurrence of Indebtedness
subordinated to the Notes; provided that the amount of any such net
--------
cash proceeds or value of securities issued upon exchange that are
utilized for any such redemption,
-20-
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (2)(ii) of the second paragraph of this Section 4.05;
(5) the redemption or repurchase of capital stock of the Company
or any Subsidiary from an employee, director or officer of the
Company, all such repurchases not to exceed $500,000 in the aggregate
for any fiscal year of the Company; or
(6) other Restricted Payments pursuant to this clause (6) not to
exceed $7.5 million in the aggregate at any time outstanding.
Section 4.06. Limitation on Incurrence of Indebtedness.
-----------------------------------------
The Company (a) will not, and will not permit any of its
Subsidiaries to, incur any Indebtedness; or (b) will not permit any of its
Subsidiaries to issue any capital stock having a preference in liquidation or
with respect to the payment of dividends, except that the Company and its
Subsidiaries may incur the following:
(1) the Notes issued on the Issue Date, the PIK Notes, if any,
issued after the Issue Date and other Indebtedness outstanding on the
Issue Date;
(2) Indebtedness which is used solely to refund, redeem or
refinance the Notes or other unsubordinated Indebtedness with
Indebtedness which ranks pari passu with the Notes, or Indebtedness
which is used solely to refund, redeem or refinance subordinated
Indebtedness with Indebtedness subordinated to the Notes on terms at
least as favorable to the holders of the Notes as the subordination
terms of such subordinated Indebtedness;
(3) 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 (including
financing fees and costs) of development, construction, installation,
integration or improvement of assets used or useful in the Company's
or its Subsidiaries' businesses, in an aggregate principal amount not
to exceed $2.0 million at any time outstanding pursuant to this
clause (3);
(4) Indebtedness owed by the Company or any of its Subsidiaries
to the Company or any of its Subsidiaries; provided that (i) any such
--------
Indebtedness owed by the Company shall be expressly subordinated to
the prior payment in full in cash of all Indebtedness of the Company
arising under the Notes; and (ii) if such Indebtedness is held at any
time by a Person other than the Company or any of its Subsidiaries,
the Company or such Subsidiary shall be deemed to have incurred
Indebtedness not permitted by this clause (4); and
(5) additional Indebtedness arising under the Credit Facility
(whether existing on the date of this Indenture or hereafter arising)
in an aggregate principal amount not to exceed $20.0 million at any
time outstanding pursuant to this clause (5).
-21-
Section 4.07. Limitation on Liens.
--------------------
Neither the Company nor any Subsidiary of the Company shall
cause, suffer or permit to exist, and none of them shall cause, suffer or permit
any of their subsidiaries to cause, suffer or permit to exist, any Lien on the
property or assets of the Company or any such Subsidiary other than Permitted
Liens.
Section 4.08. Offer to Repurchase Notes Upon Change of Control.
-------------------------------------------------
If a Change of Control occurs, each Holder shall have the
right to require the Company to repurchase all or any part (equal to $1.00 or an
integral multiple thereof) of such Holder's Notes pursuant to a Change of
Control Offer. In the Change of Control Offer, the Company shall offer (an
"Offer") a payment (the "Change of Control Payment") in cash equal to 100% of
----- -------------------------
the aggregate principal amount of Notes to be repurchased plus accrued and
unpaid interest thereon, if any, to the date of purchase (the "Redemption
----------
Date").
----
Within 30 days after the consummation of any Change of
Control, the Company will mail a notice to each Holder describing the
transaction or transactions constituting the Change of Control and offering to
repurchase the Notes. The Company shall provide the Trustee with notice of the
Offer at least 10 days before the notice of any Offer is mailed to Holders. Upon
the commencement of any Offer the Company or the Trustee shall send, by first
class mail, not less than 30 nor more than 60 days prior to the proposed
Redemption Date a notice to each of the Holders. The notice shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Offer. The notice, which shall govern the terms of the Offer,
shall state:
(a) that the Offer is being made pursuant to this Section 4.08
and the length of time the Offer will remain open (the "Offer Period");
------------
(b) the purchase price and the Redemption Date;
(c) that any Note not tendered or accepted for payment will
continue to accrue interest;
(d) that any Note accepted for payment pursuant to the Offer
shall cease to accrue interest after the Redemption Date;
(e) that Holders electing to have a Note purchased pursuant to
the Offer will be required to surrender the Note, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Note completed, to the
Company, a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three Business Days before the
Redemption Date; and
(f) that Holders will be entitled to withdraw their election if
the Company, depositary or Paying Agent, as the case may be, receives, not later
than the expiration of the Offer Period, or such longer period as may be
required by law, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing his
election to have the Note purchased;
-22-
On or before the Redemption Date, the Company shall, to the
extent lawful:
(1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Offer;
(2) if the Company appoints a depositary or Paying Agent, deposit
with such depositary or Paying Agent immediately available funds
sufficient to pay the Change of Control Payment in respect of all
Notes or portions thereof so accepted;
(3) deliver or cause the depositary or Paying Agent to deliver to
the Trustee the Notes so accepted; and
(4) deliver an Officer's Certificate stating the aggregate
principal amount of such Notes or portions thereof accepted for
payment by the Company in accordance with the terms of this Section
4.08.
The depositary, the Paying Agent or the Company, as the case may
be, shall promptly (but in any case not later than five days after the
Redemption Date) mail or deliver to each tendering Holder an amount equal to the
Change of Control Payment in respect of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Trustee shall promptly
authenticate and mail or deliver (or cause to be transferred by book entry) to
such Holders a new Note equal in principal amount to any unpurchased portion of
the Note surrendered; provided, that each such new Note shall be in a principal
--------
amount of $1.00 or an integral multiple thereof. The Company will publicly
announce the results of the Offer as soon as practicable after the Redemption
Date.
The Company shall comply with all of the requirements of Rule
14e-1 under the Securities Exchange Act and any other securities laws and
regulations thereunder to the extent that such laws and regulations are
applicable to the Change of Control Offer. To the extent that the provisions of
any applicable securities laws or regulations conflict with the provisions
hereunder relating to a Change of Control Offer, the Company will not be deemed
to have breached its obligations hereunder by virtue of complying with such laws
or regulations.
The provisions described in this Section 4.08 that require the
Company to make a Change of Control Offer following a Change of Control will be
applicable regardless of whether or not any other provisions of this Indenture
are applicable. Notwithstanding any other provision of this Section 4.08, the
Company will not be required to make a Change of Control Offer upon a Change of
Control (i) if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer or (ii) if, in connection with or in contemplation of any Change
of Control, the Company or a third party has made an offer to purchase (an
"Alternate Offer") any and all Notes validly tendered at a cash price equal to
---------------
or greater than the Change of Control Payment and purchases all Notes properly
tendered in accordance with the terms of such Alternate Offer.
-23-
Section 4.09. Funds and Notes for Note Payments to be Held in Trust.
------------------------------------------------------
Whenever the Company shall have one or more Paying Agents, it
will, prior to each date for the payment of the principal of or interest (in
U.S. Legal Tender or Notes, if applicable) on the Notes, deposit with a Paying
Agent consideration in immediately available funds, sufficient to pay the
principal or interest so becoming due, such consideration to be held in trust
for the benefit of the Holders; and, unless such Paying Agent is the Trustee,
the Company will promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will:
(1) hold all consideration held by it for the payment (in U.S.
Legal Tender or Notes, if applicable) on the Notes in trust for the
benefit of the Holders until such consideration shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of
principal or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums so held in trust by such Paying Agent.
The Company may at any time pay, or direct any Paying Agent to
pay, to the Trustee all consideration held in trust by the Company or such
Paying Agent, such consideration to be held by the Trustee upon the same trusts
as those upon which such consideration were held by the Company or such Paying
Agent; and, upon such payment by the Company or any Paying Agent to the Trustee,
the Company or such Paying Agent, as the case may be, shall be released from all
further liability with respect to such consideration.
Section 4.10. Continued Existence.
--------------------
Subject to Article 5, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its existence
as a corporation and the corporate, partnership or other existence of each
Subsidiary of the Company in accordance with the respective organizational
documents of each Subsidiary and 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 Subsidiaries, if
the loss thereof is not, and will not be, adverse in any material respect to the
Holders.
Section 4.11. Maintenance of Properties, etc.
-------------------------------
The Company shall, and shall cause each of its Subsidiaries
to, maintain in all material respects all of its material properties and assets
necessary to the operation of its
-24-
business in good working order and condition and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto.
The Company shall, and shall cause each of its Subsidiaries
to, maintain with financially sound and reputable insurers such insurance as may
be required by law and shall use its best efforts to obtain such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated, as determined by the
Company in its reasonable business judgment.
The Company shall, and shall cause each of its Subsidiaries
to, keep true books of records and accounts in which full and correct entries
will be made of all its business transactions, in accordance with sound business
practices, and reflect in its financial statements adequate accruals and
appropriations to reserves, all in accordance with GAAP in all material
respects, subject to year-end audit adjustments and footnotes.
The Company shall, and shall cause each of its Subsidiaries
to, comply with all statutes, laws, ordinances, or government rules and
regulations to which it is subject, noncompliance with which would have a
material adverse affect on the business, prospects, earnings, properties, assets
or condition, financial or otherwise, of the Company and its Subsidiaries taken
as a whole.
Section 4.12. Payment of Taxes and Other Claims.
----------------------------------
The Company will pay or discharge, or cause to be paid or
discharged, before the same becomes delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any of its
Subsidiaries or upon the income, profits or property of the Company or any of
its Subsidiaries and (2) all lawful material claims for labor, materials and
supplies which, if unpaid, might by law become a Lien upon the property of the
Company or any Subsidiary of the Company; provided, however, that the Company
-------- -------
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim the amount, applicability or validity of
which is being timely contested in good faith by appropriate proceedings.
ARTICLE 5
SUCCESSORS
Section 5.01. When Company May Merge, etc.
---------------------------
The Company shall not consolidate or merge with or into, or
transfer or lease all or substantially all of its assets to, any Person unless:
(1) either (a) the Company is the surviving corporation; or
(b) the Person formed by or surviving any such consolidation or merger
(if other than the Company), or to which such sale or conveyance shall
have been made, is a corporation organized and existing under the laws
of the United States, any state thereof or the District of Columbia;
-25-
(2) in case of a consolidation or merger, the corporation
formed by or surviving any such consolidation or merger (if other than
the Company) assumes by supplemental indenture all the obligations of
the Company under the Notes and this Indenture;
(3) no Default or Event of Default would exist immediately
after giving effect to the transaction;
(4) in the case of a consolidation or merger, the
corporation formed by or surviving any such consolidation or merger,
shall have Consolidated Adjusted Net Worth (immediately after the
transaction) equal to or greater than the Consolidated Adjusted Net
Worth of the Company (immediately preceding the transaction); and
(5) for the period of the four full fiscal quarters most
recently ended prior to the date of determination, the Company would
have a consolidated Fixed Charge Coverage Ratio immediately after
giving effect to the transaction no less than its consolidated Fixed
Charge Coverage Ratio immediately before giving effect to the
transaction;
provided, however, that clauses (4) and (5) above shall not
-------- -------
apply if the principal purpose of such transaction is to change the state of
incorporation of the Company.
The Company shall deliver to the Trustee prior to the proposed
transaction an Officer's Certificate to the foregoing effect and an Opinion of
Counsel stating that the proposed transaction and such supplemental indenture
comply with this Indenture.
Section 5.02. Successor Corporation Substituted.
---------------------------------
Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company in accordance with Section 5.01, the successor corporation formed by
such consolidation or into or with which the Company is merged or to which such
sale, lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person has been named
as the Company herein; provided, however, that the predecessor Company in the
case of a sale, lease, conveyance or other disposition shall not be released
from the obligation to pay the principal of and interest on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
-----------------
An "Event of Default" occurs if:
----------------
(1) the Company defaults in the payment of interest on any
Note when the same becomes due and payable and the Default continues
for a period of 30 days;
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(2) the Company defaults in the payment of the principal of
any Note when the same becomes due and payable at maturity, upon
redemption or otherwise;
(3) the Company fails to observe or perform in any material
respect any covenant, condition or agreement on the part of the Company
to be observed or performed pursuant to Sections 4.05, 4.06 or 5.01;
(4) the Company fails to comply in any material respect with
any of its other agreements or covenants in, or provisions of, the
Notes or this Indenture and the Default continues for the period and
after the notice specified below;
(5) the Company defaults in the payment of principal or
interest on any Indebtedness with an aggregate principal amount of at
least $1,000,000, whether such Indebtedness now exists or shall be
created hereafter, if the effect of such default is to cause the
acceleration of such Indebtedness;
(6) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any of its Subsidiaries which remains
undischarged or unvacated for a period (during which execution shall
not be effectively stayed) of 45 days; provided, that the aggregate of
--------
all such judgments exceeds $1,000,000; and provided, further, that such
-------- -------
event shall not be an Event of Default if a responsible insurer has
agreed to pay the amount of such judgment so long as such judgment or
judgments is paid by such insurer within 90 days;
(7) the Company or any Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(a) fails generally to pay its debts as they become
due,
(b) admits in writing its inability to pay its debts
generally as they become due,
(c) commences a voluntary case,
(d) consents to the entry of an order for relief
against it in an involuntary case,
(e) consents to the appointment of a Custodian of it
or for all or substantially all of its property, or
(f) makes a general assignment for the benefit of its
creditors; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(a) is for relief against the Company or any Material
Subsidiary in an involuntary case,
-27-
(b) appoints a Custodian of the Company or any Material
Subsidiary or for all or substantially all of its property, or
(c) orders the liquidation of the Company or any Material
Subsidiary, and the order or decree remains unstayed and in effect for
60 days.
The term "Bankruptcy Law" means title 11, U.S. Code or any similar Federal or
--------------
state law for the relief of debtors. The term "Custodian" means any receiver,
---------
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes notify
the Company in writing of the Default and the Company does not cure the Default
within 30 days after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a "Notice of Default."
Section 6.02. Acceleration.
------------
If an Event of Default (other than an Event of Default
specified in clauses (7) and (8) of Section 6.01) occurs and is continuing, the
Trustee by notice to the Company, or the Holders of at least 25% in principal
amount of the then outstanding Notes by notice to the Company and the Trustee,
may declare all unpaid principal and accrued interest on the Notes then
outstanding to be due and payable. Upon such declaration the principal and
interest shall be due and payable immediately. If an Event of Default specified
in clause (7) or (8) of Section 6.01 occurs, such an amount shall ipso facto
---- -----
become due and payable immediately prior to such Event of Default without any
declaration or other act on the part of the Trustee or any Holder. The Holders
of a majority in principal amount of the then outstanding Notes by notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.
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 and any other amounts owing pursuant to the terms of the Notes or to enforce
the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
-----------------------
Subject to Sections 6.07 and 9.02 hereof, the Holders of a
majority in principal amount of the then outstanding Notes by notice to the
Trustee may waive an
-28-
existing Default or Event of Default and its consequences except a continuing
Default or Event of Default in the payment of the principal of, interest on and
any other amounts owing pursuant to the terms of any Note. When a Default or
Event of Default is waived, it is cured and ceases. No such waiver, however,
shall extend to any subsequent or other Default or Event of Default or impair
any right consequent thereto.
Section 6.05. Control by Majority.
-------------------
The Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, is unduly prejudicial to
the rights of other Holders, or would involve the Trustee in personal liability.
Section 6.06. Limitation on Suits.
-------------------
A Holder may pursue a remedy with respect to this Indenture or
the Notes only if:
(1) the Holder gives to the Trustee notice of a continuing
Event of Default;
(2) the Holders of at least 25% in principal amount of the
then outstanding Notes make a request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another Holder or
to obtain a preference or priority over another Holder.
Section 6.07. Rights of Holders to Receive Payment.
------------------------------------
The right of any Holder of a Note to receive payment of
principal of, interest on and any other amounts owing pursuant to the terms of
the Note, on or after the respective due dates expressed in the 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 the Holder.
-29-
Section 6.08. Collection Suit by Trustee.
--------------------------
If an Event of Default specified in Section 6.01(1) or 6.01(2)
has occurred and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company or any other obligor on
the Notes for the whole amount of principal of, interest remaining unpaid on and
any other amounts owing pursuant to the terms of the Notes and such further
amounts as are necessary to cover the Trustee's reasonable expenses in a
collection suit.
Section 6.09. Trustee May File Proofs of Claim.
--------------------------------
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its property.
Section 6.10. Priorities.
----------
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due in connection with the
Notes, ratably, without preference or priority of
any kind, according to the amounts due and payable
on the Notes for principal and interest,
respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any
payment to Holders.
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 pursuant to Section 6.07, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
-30-
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 their exercise, as a
prudent Person would exercise or use under the circumstances in the conduct of
its own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee undertakes to perform such duties and only
such duties that are specifically set forth in this Indenture or the
TIA, if applicable, and no implied covenants or obligations shall be
read into this Indenture against the Trustee and the Trustee shall not
be liable except for the performance of such duties as are
specifically set out in this Indenture; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
delivered to the Trustee, the Trustee shall be under a duty to examine
the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture but need not verify the accuracy
of the contents thereof.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own wilful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b)
of this Section;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee or the Trust Officer was negligent in ascertaining
the pertinent facts; and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this
Section.
(e) The Trustee may refuse to perform any duty or exercise
any right or power unless it receives indemnity satisfactory to it against any
loss, liability or expense.
-31-
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree with the Company. Money
held in trust by the Trustee need not be segregated from other funds except to
the extent required by law.
(g) The Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the outstanding
Notes relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture.
(h) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(i) Whether or not herein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
Section 7.02. Rights of Trustee.
------------------
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper Person. The Trustee
need not investigate any fact or matter stated in such document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such certificate or opinion.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers.
Section 7.03. Individual Rights of Trustee.
----------------------------
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. However, the Trustee is subject to Sections
7.10 and 7.11.
Section 7.04. Trustee's Disclaimer.
--------------------
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Notes, shall not be accountable for the
Company's use of the proceeds from the Notes, and shall not be responsible for
any statement of the Company in the Indenture or any statement in the Notes
other than its authentication.
-32-
Section 7.05. Notice of Defaults.
------------------
If a Default or Event of Default occurs and is continuing and if
it is known to a Trust Officer, the Trustee shall mail to Holders 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 the principal of or interest
on any Note, the Trustee may withhold and shall be protected in withholding the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders.
Section 7.06. Reports by Trustee to Holders.
-----------------------------
Within 60 days after the reporting date stated in Section 10.10,
the Trustee shall mail to Holders a brief report dated as of such reporting date
that complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S)
313(b). The Trustee shall also transmit by mail all reports as required by TIA
(S) 313(c).
A copy of each report at the time of its mailing to Holders
shall be filed with the SEC and each stock exchange on which the Notes are
listed as required by TIA (S) 313(d). The Company shall notify the Trustee when
the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
--------------------------
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of the Indenture and its services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred by it.
Such expenses shall include the reasonable compensation and out-of-pocket
expenses of the Trustee's agents, accountants, experts and counsel.
The Company shall indemnify the Trustee against any loss,
liability or expense incurred by it arising out of or in connection with the
acceptance or administration of its duties under the Indenture, except as set
forth in the next paragraph. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. Failure of the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder except to
the extent the Company is prejudiced by such failure. 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.
The Company need not reimburse any expense or indemnify against
any loss or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal of,
interest on and any other amounts owing pursuant to the terms of particular
Notes.
-33-
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(7) or (8) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
The Company's obligations under this Section 7.07 and any lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article 8 and/or the
termination of this Indenture.
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.
The Trustee may resign at any time by so notifying the Company.
The Holders of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company. The Company may
remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) 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;
(3) a Custodian or public officer takes charge of the Trustee or
its property; or
(4) the Trustee 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 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 at least 10% in principal amount of the then outstanding Notes
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee fails to comply with Section on 7.10, any Holder
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. The retiring Trustee shall promptly transfer all property
-34-
held by it as Trustee to the successor Trustee, subject to the lien provided for
in Section 7.07 hereof.
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
national banking association or corporation, the successor national banking
association or corporation without any further act shall be the successor
Trustee.
Section 7.10. Eligibility; Disqualification.
-----------------------------
This indenture shall always have a Trustee who satisfies the
requirements of TIA (S) 310(a)(1). The Trustee always shall have a combined
capital and surplus as stated in Section 10.10. The Trustee is subject to TIA
(S) 310(b).
Section 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
Section 8.01. Termination of Company's Obligations.
------------------------------------
This Indenture shall cease to be of further effect (except
that the Company's obligations under Sections 7.07, 8.02 and 8.03 shall survive)
when all outstanding Notes theretofore authenticated and issued have been
delivered to the Trustee for cancellation. In addition, the Company may
terminate all of its obligations under the Notes and, except as specified below,
under this Indenture if:
(1) the Company irrevocably deposits in trust with the Trustee,
pursuant to an irrevocable trust and security agreement in form and
substance reasonably satisfactory to the Trustee, U.S. Legal Tender or
Government Securities maturing as to principal and interest in such amounts
and at such times as are sufficient, without consideration of the
reinvestment of such interest and after payment of all Federal, state and
local taxes or other charges or assessments in respect thereof payable by
the Trustee, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered
in form and substance reasonably satisfactory to the Trustee, to pay
principal of, the maximum amount of interest permissible and any other
amounts owing pursuant to the terms of the Notes on the outstanding Notes
on the dates on which any such payments are due and payable in accordance
with the terms of the Indenture and of the Notes;
(2) such deposit shall not cause the Trustee to have conflicting
interest as defined in and for purposes of the TIA;
-35-
(3) no Default, Event of Default or default shall have
occurred or be continuing on the date of such deposit or shall occur on
or before the 91st day after the date of such deposit;
(4) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
instrument to which the Company is a party or by which it or its
property is bound;
(5) the Company shall deliver to the Trustee an Opinion of
Counsel in form and substance satisfactory to the Trustee to the effect
that Holders of the Notes will not recognize income, gain or loss for
Federal, state or local income tax purposes as a result of such deposit
and the defeasance contemplated hereby and will be subject to Federal,
state or local income tax in the same amounts and in the same manner
and at the same time as would have been the case if such deposit and
defeasance had not occurred;
(6) the deposit shall not result in the Company, the Trustee
or the trust becoming or being deemed to be an "investment company"
under the Investment Company Act of 1940;
(7) the Holders shall have a perfected security interest
under applicable law in the U.S. Legal Tender or Government Securities
deposited pursuant to Section 8.01(1) above; and
(8) the Company has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent specified herein relating to the defeasance contemplated by
this Section 8.01 have been complied with.
In the event all or any portion of the Notes are to be
redeemed through such irrevocable trust, the Company must make arrangements
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company. However, the Company's obligations in Sections 2.04,
2.05, 2.06, 2.07, 2.08, 4.01, 4.04, 4.06, 4.09, 6.07, 7.07, 7.08 and 8.03 shall
survive until the Notes are no longer outstanding. Thereafter, only the
Company's obligations in Sections 7.07 and 8.03 shall survive.
After a deposit made pursuant to this Section 8.01, the
Trustee upon request shall acknowledge in writing the discharge of the Company's
obligations under this Indenture except for those surviving obligations
specified above.
In order to have U.S. Legal Tender available on a payment date
to pay principal or interest on the Notes, the Government Securities shall be
payable as to principal or interest on or before such payment date in such
amounts as will provide the necessary money. U.S. Government Securities shall
not be callable at the issuer's option.
-36-
Section 8.02. Application of Trust Money.
-----------------------------
The Trustee shall hold in trust U.S. Legal Tender or Government
Securities deposited with it pursuant to Section 8.01. It shall apply the
deposited U.S. Legal Tender and the Legal Tender from Government Securities
through the Paying Agent and in accordance with this Indenture to the payment of
principal of, interest on and any other amounts owing pursuant to the terms of
the Notes.
Section 8.03. Repayment to Company.
----------------------
The Trustee and the Paying Agent shall promptly pay to the
Company upon request any excess U.S. Legal Tender or Government Securities held
by them at any time.
The Trustee and the Paying Agent shall pay to the Company upon
request any U.S. Legal Tender held by them for the payment of principal or
interest that remains unclaimed for two years. After payment to the Company in
accordance with this Section 8.03, Holders entitled to the U.S. Legal Tender
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person and all liability of the
Trustee and Paying Agent with respect to such money shall cease.
ARTICLE 9
AMENDMENTS
Section 9.01. Without Consent of Holders.
--------------------------
The Company and the Trustee may amend this Indenture or the
Notes without the consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01; or
(3) to make any change that does not adversely affect the
legal rights hereunder of any Holder; provided, that the Company has
--------
provided to the Trustee an Opinion of Counsel stating that any such
change does not adversely affect the rights of any such Holder.
Section 9.02. With Consent of Holders.
--------------------------
The Company and the Trustee may amend this Indenture or the
Notes with the written consent of the Holders of at least a majority in
principal amount of the then outstanding Notes; provided, that the Notes held in
--------
the Papercraft Fund shall not be deemed to be outstanding for purposes of this
provision. However, without the consent of each Holder affected, an amendment
under this Section may not:
(1) reduce the amount of Notes whose Holders must consent to
an amendment;
-37-
(2) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(3) reduce the principal of or change the fixed maturity of
any Note;
(4) make any Note payable in money other than that amount
stated in the Note; or
(5) make any change in Section 6.02, 6.04, 6.07 or this
Section 9.02 (second sentence).
After an amendment under this Section becomes effective, the
Company shall mail to Holders a notice briefly describing the amendment.
Section 9.03. Compliance with Trust Indenture Act.
--------------------------------------
Every amendment to this Indenture or the Notes or waiver of
the provisions hereof shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
---------------------------------
Until an amendment or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same
indebtedness as the consenting Holder's Note, even if notation of the consent is
not made on any Note. However, any such Holder or subsequent Holder may revoke
the consent as to his Note or portion of a Note if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
An amendment or waiver becomes effective in accordance with its terms and
thereafter binds every Holder unless it makes a change described in any of the
clauses (1) through (5) of Section 9.02. In that case, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note or portion of a Note that evidences the same indebtedness as the consenting
Holder's Note.
Section 9.05. Notation on or Exchange of Notes.
--------------------------------
The Trustee may place an appropriate notation about an
amendment or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment or waiver.
Section 9.06. Trustee Protected.
-----------------
The Trustee shall sign all supplemental indentures, amendments
or waivers authorized pursuant to this Article 9, except that the Trustee need
not sign any supplemental indenture that adversely affects its rights, duties,
liabilities or immunities. In signing or refusing to sign such supplemental
indenture, amendment or waiver the Trustee shall be entitled to receive
indemnity satisfactory to it subject to Section 7.01 hereof and shall be fully
protected in relying upon an Officer's Certificate and an Opinion of Counsel
stating
-38-
that such supplemental indenture, amendment or waiver is authorized or permitted
by this Article 9.
ARTICLE 10
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
Section 10.02. 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 to the other's address stated in Section 10.10. The Company or
the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications.
Any notice or communication to a Holder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in such
notice or communication 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; provided, however, that all notices to the Trustee shall only be
-------- -------
deemed given when received by the Trustee.
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.
All other notices or communications shall be in writing.
Section 10.03. Communication by Holders with Other Holders.
-------------------------------------------
Holders may communicate pursuant to TIA (S)312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA (S)312(c).
Section 10.04. 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 Officer's Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
-39-
(b) an Opinion of Counsel stating that, in the opinion of
such counsel, all such conditions precedent have been complied with.
Section 10.05. Statements Required in Certificate or Opinion.
----------------------------------------------
Subject to Section 4.03, when applicable, each certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(1) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of such
Person, such condition or covenant has been complied with.
Section 10.06. Rules by Trustee and Agents.
---------------------------
The Trustee may make reasonable rules for action by or a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 10.07. Legal Holidays.
--------------
A "Legal Holiday" is a Saturday, a Sunday or a day on which
-------------
banking institutions are not required to be open at a place of payment. 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.
Section 10.08. No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of the
Company or Trustee shall not have any liability for any obligations of the
Company or Trustee under the Notes or the Indenture or for any claim based on,
in respect of or by reason of such obligations on their creation. Each Holder by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Notes.
Section 10.09. Duplicate Originals.
-------------------
The parties may sign any number of copies of this Indenture.
One signed copy is enough to prove this Indenture.
-40-
Section 10.10. Variable Provisions.
--------------------
"Officer" means the Chairman of the Board, the Chief Executive
-------
Officer, the President, the Chief Financial Officer, any Vice-President, the
Treasurer, the Secretary, any Assistant Treasurer or any Assistant Secretary of
the Company.
The Company initially appoints the Trustee as Paying Agent,
Registrar and authenticating agent as co-registrar.
The reporting date for Section 7.06 is May 15 of each year.
The first reporting date is May 15, 2002.
The Trustee shall always have a combined capital and surplus
of at least $50,000,000 as set forth in its most recent published annual report
of condition.
The Company's address is:
BDK Holdings, Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
The Trustee's address is:
The Bank of New York
Corporate Trust Administration
0 Xxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Section 10.11. Governing Law.
--------------
The internal laws of the State of New York shall govern this
Indenture and the Notes.
Section 10.12. No Adverse Interpretation of Other Agreements.
----------------------------------------------
This Indenture may not be used to interpret another Indenture,
loan or indebtedness agreement of the Company or a Subsidiary. Any such
indenture, loan or indebtedness agreement may not be used to interpret this
Indenture.
Section 10.13. Successors.
-----------
All agreements of the Company in this Indenture and the Notes
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
-41-
Section 10.14. Severability.
-------------
In case any provision in this Indenture or in the 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.
-42-
SIGNATURES
Dated: as of ____________ BDK HOLDINGS, INC.
By: ___________________________
Name: XXXXXX X. XXXXXX
Title: Chairman of the Board, Chief Executive
Officer and Chief Financial Officer
(SEAL)
Dated: as of ______________ THE BANK OF NEW YORK
a national banking association
By: ___________________________
Name:
Title:
-43-
EXHIBIT A
[FORM OF NOTE]
BDK HOLDINGS, INC.
9% SENIOR NOTES
DUE 2007
CUSIP NUMBER _________________
This debt instrument has been issued with original issue discount.
The following information is provided pursuant to Treas. Reg. Section 1.1275-3:
This Note was issued as of ______________, 2002 for an issue price equal to 100%
of its face amount. The yield to maturity of this Note will be ______ whether or
not BDK Holdings, Inc. issues PIK Notes in lieu of cash interest payments on any
of the succeeding interest payment dates after the Issue Date. Assuming that
this Note is not redeemed prior to its stated maturity date, the total amount of
original issue discount on this Note (not including any original issue discount
resulting from the accrual of interest on PIK Notes issued in lieu of cash
interest payments, if any) will be ___ % of its face amount. [For PIK Notes,
add: The accruals of original issue discount with respect to each $1.00 of face
amount of this Note are intended to be identical with those of a $1.00 Note
issued on ________, 2001 for an issue price of $_______ and having terms, other
than the date, the denomination and the payee, identical to those of this Note.]
No. $
BDK HOLDINGS, INC., a Delaware corporation (the "Company"), which term
-------
includes any successor corporation, for value received promises to pay to
_________________ or registered assigns, the principal sum of
____________________ Dollars, on ________.
Interest Payment Dates: April 1
Record Dates: March 15
Reference is made to the further provisions of this Note below, which
will for all purposes have the same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer and a facsimile of its
corporate seal to be affixed to, or imprinted on this Note.
Dated: ____________________
A-1
Trustee's Certificate of Authentication:
This is one of the [Initial][PIK]Notes described in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By: _______________________________
Authorized Signatory
BDK HOLDINGS, INC.
By: _______________________________
Its:
A-2
(Back of Note)
BDK HOLDINGS, INC.
9% Senior Notes due 2007
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
-
PURSUANT TO SECTION 2.08 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
--
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
---
TO SECTION 2.12 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
--
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. IN NO
EVENT MAY ANY PORTION (LESS THAN ALL) OF THIS GLOBAL NOTE IN A PRINCIPAL AMOUNT
LESS THAN $1.00 (OR AN INTEGRAL MULTIPLE THEREOF) BE TRANSFERRED.
Capitalized terms used herein shall have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
1. Interest. BDK Holdings, Inc., a Delaware corporation (the "Company"),
-------- -------
promises to pay interest on the principal amount of this Note and, to the extent
lawful, on any interest payment due but unpaid on such principal amount,
annually on April 1 of each year (the "Interest Payment Dates"), commencing
----------------------
April 1, 2002 at the interest rates per annum and in the manner provided below.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from ___________, 2002.
Interest will be computed on the basis of a 360-day year of twelve 30-
day months. Interest shall be paid in cash. However, if, as a result of the
failure of the Company and/or any of its Subsidiaries to satisfy the coverage
ratio covenant in the Credit Facility, the Company has not received from its
Subsidiaries, as of the Business Day immediately preceding any interest payment
date, sufficient cash to pay all interest due on such interest payment date,
then interest shall also be considered paid on such date if the Company (i) has
paid the interest due in cash to the extent that it has received cash from its
Subsidiaries therefor and (ii) issues additional Notes in the form of Exhibit A
---------
to the Indenture referred to below ("PIK Notes") in an aggregate principal
amount equal to the amount of interest then due and payable and not paid in
cash.
Interest on the Notes will accrue from _________, 2002 to ________, 2007 at
the rate of 9% per annum.
Interest on the Notes shall be calculated and rounded to the nearest cent.
A-3
2. Method of Payment. The Company will pay interest on the Notes (except
-----------------
defaulted interest) to the Persons who are registered holders of Notes at the
close of business on the record date for the next interest payment date even
though Notes are cancelled after the record date and on or before the interest
payment date. Holders must surrender Notes to a Paying Agent to collect
principal payments. The Company will pay principal and interest in money of the
United States of America that at the time of payment is legal tender for payment
of public and private debts; provided, however, in the event that, as a result
-------- -------
of the failure of the Company and/or any of its Subsidiaries to satisfy the
coverage ratio covenant in the Credit Facility, the Company has not received
from its Subsidiaries, as of the Business Day immediately preceding any interest
payment date, distributions, dividends or advances in U.S. Legal Tender
sufficient to pay all interest due on a due date, then interest shall also be
considered paid on such interest payment date to the extent that the Company has
paid all interest due in U.S. Legal Tender to the extent that the Company has
received from its Subsidiaries U.S. Legal Tender therefor, and has issued to the
Holders, pro rata in accordance with the ratio of the aggregate principal amount
of Notes held by each Holder to the aggregate principal amount of Notes then
outstanding, on the applicable interest payment date, PIK Notes in an aggregate
principal amount equal to the amount of interest then due and payable and not
paid in U.S. Legal Tender. It may mail interest in U.S. Legal Tender or in the
form of PIK Notes to a Holder's registered address.
3. Paying Agent and Registrar. The Trustee will act as Paying Agent and
--------------------------
Registrar. The Company may change any Paying Agent, Registrar or co-registrar
without notice to any Holder. The Company may act in any such capacity other
than Paying Agent.
4. Indenture. The Company issued the Notes under an Indenture, dated as of
---------
February ____, 2002 ("Indenture"), between the Company and the Trustee. The
---------
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S. Code
(S)(S) 77aaa-77bbbb) as in effect on the date of the Indenture. The Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The terms herein set forth are a summary of
the terms of the Notes as set forth in the Indenture and, in the event of any
conflict, the terms of the Indenture shall govern. [This Note is one of the
Initial Notes referred to in the Indenture.][This Note is one of the PIK Notes
issued in lieu of cash interest as set forth in the Indenture]. The Initial
Notes and the PIK Notes shall be treated as a single class of securities for all
purposes of the Indenture. The Initial Notes are obligations of the Company
limited to $10,392,000 in aggregate principal amount. The PIK Notes are not
limited in principal amount.
5. Optional Redemption. The Company may redeem all the Notes at any time or
-------------------
some of them from time to time at 100% of the principal amount thereof plus
accrued interest, payable solely in cash.
6. Notice of Redemption. Notice of redemption will be mailed at least 15
--------------------
days but not more than 60 days before the redemption date to each holder of
securities to be redeemed at his registered address. On and after the redemption
date interest ceases to accrue on Notes or portions of them called for
redemption.
A-4
7. Restrictive Covenants. The Indenture imposes certain limitations on the
---------------------
ability of the Company and its Subsidiaries to, among other things, incur
additional Indebtedness, make payments in respect of its capital stock, permit
to exist Liens securing indebtedness for money borrowed on property or assets of
the Company or any of its Subsidiaries, merge or consolidate with any other
Person or sell, lease, transfer or otherwise dispose of all or substantially all
of its properties or assets.
8. Denominations, Transfer, Exchange. The Notes are in registered form
---------------------------------
without coupons in denominations of $1.00. The transfer of Notes may be
registered and Notes may be exchanged in denominations of $1.00 or integral
multiples thereof, or, if less, the entire principal amount of any Note, as
provided in the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Note or portion of a Note
selected for redemption. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before a selection of Notes to be redeemed.
9. Persons Deemed Owners. The registered holder of a Note may be treated
---------------------
as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the Indenture or
----------------------
the Notes may be amended with the consent of the holders of at least a majority
in principal amount of the then outstanding Notes, provided, that the Notes held
--------
in the Papercraft Fund shall not be deemed outstanding for purposes of the
preceding clause, and any existing default may be waived with the consent of the
holders of a majority in principal amounts of the then outstanding Notes.
Without the consent of any Holder, the Indenture or the Notes may be amended,
among other things, to cure any ambiguity, defect or inconsistency, to provide
for assumption of Company obligations to Holders or to make any change that does
not adversely affect the rights of any Holder.
11. Defaults and Remedies. As more fully set forth in the Indenture, an
---------------------
Event of Default is: default for 30 days in payment of interest on the Notes;
default in payment of principal on them; failure by the Company to comply with
certain specified covenants in the Indenture; failure by the Company for 30 days
after notice to it to comply with any of its other agreements in the indenture
or the Notes; the entry of certain final judgments which remain undischarged;
and certain events of bankruptcy or insolvency. If an Event of Default occurs
and is continuing, the Trustee or the holders of at least 25% in principal
amount of the then outstanding Notes may declare all the Notes to be immediately
due and payable, except that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes become due and
payable immediately prior to such Event of Default without further action or
notice. Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, holders of
a majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal or interest) if it determines that withholding notice is in their
interests. The Company must furnish an annual compliance certificate to the
Trustee.
A-5
12. Trustee Dealings with Company. The Trustee under the Indenture, 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 Trustee.
13. No Recourse Against Others. A director, officer, employee or
--------------------------
stockholder, as such, of the Company or Trustee shall not have any liability for
any obligations of the Company or Trustee under the 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 Note waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Notes.
14. Authentication. This Note shall not be valid until authenticated by the
--------------
manual signature of the Trustee or an authenticating agent.
15. 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).
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture, which has in it the text of this Note in larger
type. Request may be made to BDK Holdings, Inc., 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000.
A-6
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this 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 _________________________________________ agent to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
--------------------------------------------------------------------------
Date: ___________ Your Signature(s):_________________________
-------------------------
(Sign exactly as your name(s) appear(s) on the face of this Note)
Signature Guarantee: ________________________________________________________
A-7
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.08 of the Indenture, check the box below:
|_____________|
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.08 of the Indenture, state the amount you elect to have
purchased:
$ _______________________
Date:____________________
Your Signature: ___________________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: ___________________________________________________
Signature Guarantee: ______________________________________________________
A-8
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Date of Amount of Amount of Principal Signature of authorized
Exchange decrease in increase in Amount of officer of Trustee or
-------- Principal Amount Principal this Global Note Custodian
Amount of Amount of Note -----------------------
this Global this Global following
Note Note such decrease
---------------- ----------- (or increase)
-------------
A-9
TABLE SHOWING REFLECTION IN THIS INDENTURE OF CERTAIN PROVISIONS OF THE TRUST
INDENTURE ACT OF 1939:/1/
INDENTURE
TIA SECTION SECTION
----------- -------
310(a)(1)a ...................................... 7.10
(a)(2) ...................................... 7.10
(a)(3) ...................................... N.A./2/
(a)(4) ...................................... N.A.
(a)(5) ...................................... 7.10
(b) ...................................... 7.10
311(a) ...................................... 7.11
(b) ...................................... 7.11
(c) ...................................... N/A
312(a) ...................................... 2.06
(b) ...................................... 10.03
(c) ...................................... 10.03
313(a) ...................................... 7.06
(b) ...................................... 7.06
(c) ...................................... 7.06
(d) ...................................... 7.06
314(a) ...................................... 4.02
(b) ...................................... N.A.
(c)(1) ...................................... 10.04; 10.10
(c)(2) ...................................... 110.04; 10.10
(c)(3) ...................................... N.A.
(d) ...................................... N.A.
(e) ...................................... 10.05
315(a) ...................................... 7.01(b)
(b) ...................................... 7.05; 10.02
(c) ...................................... 7.01(a)
(d) ...................................... 7.01(c)
(e) ...................................... 6.11
_____________
/1/ This Table shall not, for any purpose, be deemed to be a part of this
Indenture.
/2/ N.A. means Not Applicable.
A-10
INDENTURE
TIA SECTION SECTION
----------- -------
316(a)(last sentence) 2.10
(a)(1)(A) .......................................... 6.05
(a)(1)(B) .......................................... 6.04
(a)(2) .......................................... N.A.
(b) .......................................... 6.07
317(a)(1) .......................................... 6.08
(a)(2) .......................................... 6.09
(b) .......................................... 2.05
318(a) .......................................... 10.01
A-11
