EXHIBIT 4.1
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PAYLESS SHOESOURCE, INC.
and each of the Guarantors named herein
SERIES A AND SERIES B
8.25% SENIOR SUBORDINATED NOTES DUE 2013
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INDENTURE
Dated as of July 28, 2003
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Xxxxx Fargo Bank Minnesota, National Association
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................... 7.10
(a)(2)................................................................... 7.10
(a)(3)................................................................... N.A.
(a)(4)................................................................... N.A.
(a)(5)................................................................... 7.10
(b)...................................................................... 7.10
(c)...................................................................... N.A.
311(a)...................................................................... 7.11
(b)...................................................................... 7.11
(c)...................................................................... N.A.
312(a)...................................................................... 2.05
(b)...................................................................... 13.03
(c)...................................................................... 13.03
313(a)...................................................................... 7.06
(b)(2)................................................................... 7.06; 7.07
(c)...................................................................... 7.06; 13.02
(d)...................................................................... 7.06
314(a)...................................................................... 4.03; 13.02; 13.05
(c)(1)................................................................... 13.04
(c)(2)................................................................... 13.04
(c)(3)................................................................... N.A.
(e)...................................................................... 13.05
(f)...................................................................... N.A.
315(a)...................................................................... 7.01
(b)...................................................................... 7.05; 13.02
(c)...................................................................... 7.01
(d)...................................................................... 7.01
(e)...................................................................... 6.11
316(a) (last sentence)...................................................... 2.09
(a)(1)(A)................................................................ 6.05
(a)(1)(B)................................................................ 6.04
(a)(2)................................................................... N.A.
(b)...................................................................... 6.07
(c)...................................................................... 2.12
317(a)(1)................................................................... 6.08
(a)(2)................................................................... 6.09
(b)...................................................................... 2.04
318(a)...................................................................... 13.01
(b)...................................................................... N.A.
(c)...................................................................... 13.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions................................................................................... 1
Section 1.02 Other Definitions............................................................................. 23
Section 1.03 Incorporation by Reference of TIA............................................................. 23
Section 1.04 Rules of Construction......................................................................... 24
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating............................................................................... 24
Section 2.02 Execution and Authentication.................................................................. 25
Section 2.03 Registrar and Paying Agent.................................................................... 25
Section 2.04 Paying Agent to Hold Money in Trust........................................................... 25
Section 2.05 Holder Lists.................................................................................. 26
Section 2.06 Transfer and Exchange......................................................................... 26
Section 2.07 Replacement Notes............................................................................. 37
Section 2.08 Outstanding Notes............................................................................. 38
Section 2.09 Treasury Notes................................................................................ 38
Section 2.10 Temporary Notes............................................................................... 38
Section 2.11 Cancellation.................................................................................. 38
Section 2.12 Defaulted Interest............................................................................ 39
Section 2.13 CUSIP Numbers................................................................................. 39
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee............................................................................ 39
Section 3.02 Selection of Notes to Be Redeemed or Purchased................................................ 39
Section 3.03 Notice of Redemption.......................................................................... 40
Section 3.04 Effect of Notice of Redemption................................................................ 41
Section 3.05 Deposit of Redemption or Purchase Price....................................................... 41
Section 3.06 Notes Redeemed or Purchased in Part........................................................... 41
Section 3.07 Optional Redemption........................................................................... 41
Section 3.08 Mandatory Redemption.......................................................................... 42
Section 3.09 Offer to Purchase by Application of Excess Proceeds........................................... 42
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.............................................................................. 44
Section 4.02 Maintenance of Office or Agency............................................................... 44
Section 4.03 Reports....................................................................................... 45
Section 4.04 Compliance Certificate........................................................................ 45
Section 4.05 Taxes......................................................................................... 46
Section 4.06 Stay, Extension and Usury Laws................................................................ 46
Section 4.07 Restricted Payments........................................................................... 46
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries................................ 49
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Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.................................... 50
Section 4.10 Asset Sales................................................................................... 53
Section 4.11 Transactions with Affiliates.................................................................. 55
Section 4.12 Liens......................................................................................... 56
Section 4.13 Line of Business.............................................................................. 56
Section 4.14 Corporate Existence........................................................................... 56
Section 4.15 Offer to Repurchase Upon Change of Control.................................................... 56
Section 4.16 No Layering of Debt........................................................................... 58
Section 4.17 Limitation on Sale and Leaseback Transactions................................................. 58
Section 4.18 Payments for Consent.......................................................................... 58
Section 4.19 Additional Subsidiary Guarantees.............................................................. 59
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries....................................... 59
Section 4.21 Changes in Covenants when Notes Rated Investment Grade........................................ 59
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets...................................................... 59
Section 5.02 Successor Corporation Substituted............................................................. 60
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default............................................................................. 61
Section 6.02 Acceleration.................................................................................. 62
Section 6.03 Other Remedies................................................................................ 63
Section 6.04 Waiver of Past Defaults....................................................................... 63
Section 6.05 Control by Majority........................................................................... 64
Section 6.06 Limitation on Suits........................................................................... 64
Section 6.07 Rights of Holders of Notes to Receive Payment................................................. 64
Section 6.08 Collection Suit by Trustee.................................................................... 65
Section 6.09 Trustee May File Proofs of Claim.............................................................. 65
Section 6.10 Priorities.................................................................................... 65
Section 6.11 Undertaking for Costs......................................................................... 66
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee............................................................................. 66
Section 7.02 Rights of Trustee............................................................................. 67
Section 7.03 Individual Rights of Trustee.................................................................. 67
Section 7.04 Trustee's Disclaimer.......................................................................... 67
Section 7.05 Notice of Defaults............................................................................ 68
Section 7.06 Reports by Trustee to Holders of the Notes.................................................... 68
Section 7.07 Compensation and Indemnity.................................................................... 68
Section 7.08 Replacement of Trustee........................................................................ 69
Section 7.09 Successor Trustee by Merger, etc.............................................................. 70
Section 7.10 Eligibility; Disqualification................................................................. 70
Section 7.11 Preferential Collection of Claims Against Company............................................. 70
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...................................... 70
Section 8.02 Legal Defeasance and Discharge................................................................ 70
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Section 8.03 Covenant Defeasance........................................................................... 71
Section 8.04 Conditions to Legal or Covenant Defeasance.................................................... 71
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other
Miscellaneous Provisions...................................................................... 73
Section 8.06 Repayment to Company.......................................................................... 73
Section 8.07 Reinstatement................................................................................. 73
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes........................................................... 74
Section 9.02 With Consent of Holders of Notes.............................................................. 75
Section 9.03 Compliance with TIA........................................................................... 76
Section 9.04 Revocation and Effect of Consents............................................................. 76
Section 9.05 Notation on or Exchange of Notes.............................................................. 76
Section 9.06 Trustee to Sign Amendments, etc. ............................................................. 76
ARTICLE 10.
SUBORDINATION
Section 10.01 Agreement to Subordinate...................................................................... 77
Section 10.02 Liquidation; Dissolution; Bankruptcy.......................................................... 77
Section 10.03 Default on Designated Senior Debt............................................................. 77
Section 10.04 Acceleration of Notes......................................................................... 78
Section 10.05 When Distribution Must Be Paid Over........................................................... 78
Section 10.06 Notice by Company............................................................................. 79
Section 10.07 Subrogation................................................................................... 79
Section 10.08 Relative Rights............................................................................... 79
Section 10.09 Subordination May Not Be Impaired by Company.................................................. 79
Section 10.10 Distribution or Notice to Representative...................................................... 79
Section 10.11 Rights of Trustee and Paying Agent............................................................ 80
Section 10.12 Authorization to Effect Subordination......................................................... 80
Section 10.13 Amendments.................................................................................... 80
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Guarantee..................................................................................... 80
Section 11.02 Subordination of Subsidiary Guarantee......................................................... 81
Section 11.03 Limitation on Guarantor Liability............................................................. 82
Section 11.04 Execution and Delivery of Subsidiary Guarantee................................................ 82
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms............................................ 82
Section 11.06 Releases Following Sale of Assets............................................................. 83
ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.................................................................... 84
Section 12.02 Application of Trust Money.................................................................... 85
ARTICLE 13.
MISCELLANEOUS
Section 13.01 TIA Controls.................................................................................. 85
Section 13.02 Notices....................................................................................... 85
Section 13.03 Communication by Holders of Notes with Other Holders of Notes................................. 86
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Section 13.04 Certificate and Opinion as to Conditions Precedent............................................ 86
Section 13.05 Statements Required in Certificate or Opinion................................................. 87
Section 13.06 Rules by Trustee and Agents................................................................... 87
Section 13.07 No Personal Liability of Directors, Officers, Employees and Stockholders...................... 87
Section 13.08 Governing Law................................................................................. 87
Section 13.09 No Adverse Interpretation of Other Agreements................................................. 88
Section 13.10 Successors.................................................................................... 88
Section 13.11 Severability.................................................................................. 88
Section 13.12 Counterpart Originals......................................................................... 88
Section 13.13 Table of Contents, Headings, etc. ............................................................ 88
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF SUBSIDIARY GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE, dated as of July 28, 2003, among Payless ShoeSource, Inc., a
Delaware corporation (the "Company"), the Guarantors (as defined) and Xxxxx
Fargo Bank Minnesota, National Association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 8.25% Series A Senior Subordinated Notes due 2013 (the "Series A
Notes") and the 8.25% Series B Senior Subordinated Notes due 2013 to be issued
in the Exchange Offer (as defined) (the "Series B Notes" and, together with the
Series A Notes, the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time
such other Person is merged with or into or becomes a Subsidiary of
such specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with
or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means additional Notes (other than the Initial
Notes) issued from time to time under this Indenture in accordance with Sections
2.02 and 4.09 hereof, as part of the same series as the Initial Notes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any specified Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such specified Person, whether through the ownership of voting
securities, by agreement or otherwise; provided that beneficial ownership of 10%
or more of the Voting Stock of a Person shall be deemed to be control, unless a
third Person has beneficial ownership in excess of 50% or more of the Voting
Stock of such Person. For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or exchange
of or for beneficial interests in any Global Note, the rules and procedures of
the Depositary, Euroclear and Clearstream that apply to such transfer or
exchange.
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"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of
any assets or rights by the Company or any Restricted Subsidiary of the
Company; provided that the sale, conveyance or other disposition of all
or substantially all of the assets of the Company and its Restricted
Subsidiaries taken as a whole shall not be considered an Asset Sale and
shall be governed by the provisions of Section 4.15 hereof and/or the
provisions of Section 5.01 hereof, and not by the provisions of Section
4.10 hereof; and
(2) the issuance of Equity Interests in any Restricted
Subsidiaries of the Company (other than director's qualifying shares)
or the sale of Equity Interests (other than director's qualifying
shares) in any of its Restricted Subsidiaries.
Notwithstanding the preceding, none of the following items shall be
deemed to be an Asset Sale:
(1) any disposition of assets in a single transaction or
series of related transactions with an aggregate Fair Market Value of
less than $4.0 million;
(2) a transfer of assets between or among the Company and
its Restricted Subsidiaries;
(3) an issuance or sale of Equity Interests by a
Restricted Subsidiary of the Company to the Company or to a Restricted
Subsidiary of the Company;
(4) the sale or lease of products, inventory, services or
accounts receivable in the ordinary course of business and any sale or
other disposition of damaged, worn-out or obsolete assets in the
ordinary course of business;
(5) the sale or other disposition of Cash Equivalents;
(6) the sublease of real or personal property on
commercially reasonable terms;
(7) dispositions in connection with Permitted Liens; or
(8) any Restricted Payment that does not violate Section
4.07 hereof or any Permitted Investment.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments during the remaining term of the lease included
in such sale and leaseback transaction including any period for which such lease
has been extended or may, at the option of the lessor, be extended without the
consent of the lessee. Such present value shall be calculated using a discount
rate equal to the rate of interest implicit in such transaction, determined in
accordance with GAAP; provided, however, that if such sale and leaseback
transaction results in a Capital Lease Obligation, the amount of Indebtedness
represented thereby will be determined in accordance with the definition of
"Capital Lease Obligation."
"Back-to-Back Guarantor" shall have the definition provided such term
in the definition of "Back-to-Back Loans."
"Back-to-Back Loans" means any unsecured Indebtedness of a Foreign
Subsidiary of the Company to an Eligible Bank (1) which Indebtedness is
guaranteed by another Foreign Subsidiary of the
2
Company (a "Back-to-Back Guarantor"), (2) where such guarantee by a Back-to-Back
Guarantor is secured solely by funds in a certificate of deposit or other cash
collateral account held by such Eligible Bank to which the Indebtedness is owed
(a "CD Account"), (3) where all or a portion of the funds used by such
Back-to-Back Guarantor to fund such CD Account are directly or indirectly from
the proceeds of a capital contribution permitted by this Indenture and (4) at
all times the principal amount of such Indebtedness shall be equal or less than
the amounts in the CD Account.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3
and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms "Beneficially Owns" and
"Beneficially Owned" have correlative meanings.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors
of the corporation or any committee thereof duly authorized to act on
behalf of such board;
(2) with respect to a partnership, the Board of Directors
of the general partner of the partnership;
(3) with respect to a limited liability company, the
managing member or members or any controlling committee of managing
members thereof; and
(4) with respect to any other Person, the board or
committee of such Person serving a function similar to that which is
performed by the board of directors of a corporation.
"Borrowing Base" means, as of the date of determination, an amount
equal to 65% of the book value of all inventory owned by the Company and the
Guarantors as of the end of the most recent fiscal quarter preceding such date
of determination.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, as of the date of determination, the
amount of the liability in respect of a capital lease that would as of such date
of determination be required to be capitalized on a balance sheet prepared in
accordance with GAAP, and the Stated Maturity of such capital lease shall be the
date of the last payment of rent or any other amount due under such lease prior
to the first date upon which such lease may be prepaid by the lessee without
payment of a penalty.
"Capital Stock" means:
(1) in the case of a corporation, the capital stock of such
corporation;
3
(2) in the case of an unincorporated association or
business entity, any and all shares, interests, participations, rights
or other equivalents (however designated) of capital stock of a
corporation;
(3) in the case of a partnership or limited liability
company, partnership interests (whether general or limited) or
membership interests; and
(4) any other interest or participation in a Person
(each, an "Issuing Person") that confers on another Person the right to
receive a share of the profits and losses of, or distributions of
assets of, the Issuing Person, but excluding from all of the foregoing
any debt securities convertible into Capital Stock, whether or not such
debt securities include any right of participation with Capital Stock.
"Cash Equivalents" means:
(1) United States dollars, Canadian dollars, currency of
any member state of the European Union and Euros;
(2) marketable securities (a) issued or directly and
unconditionally guaranteed as to interest and principal by the United
States Government (b) or insured by the United States government or any
agency or instrumentality of the United States, the obligations of
which are backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition;
(3) marketable direct obligations issued by any state of
the United States or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year
from the date of acquisition, and having, at the time of acquisition, a
credit rating of at least "A-1" from S&P or at least "P-1" from
Moody's;
(4) certificates of deposit, time deposits and eurodollar
time deposits with maturities not exceeding one year from the date of
acquisition, bankers' acceptances with maturities not exceeding one
year from the date of acquisition and overnight bank deposits, in each
case, with any commercial bank having Tier 1 capital (as defined in the
regulations of its primary United States Federal banking regulator) in
excess of $100.0 million and a Thomson Bank Watch Rating of "B" or
better as of the date of acquisition;
(5) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clauses
(2), (3) and (4) above entered into with any financial institution
meeting the qualifications specified in clause (4) above;
(6) commercial paper having one of the two highest
ratings obtainable from Moody's or S&P and in each case having
maturities not exceeding one year from the date of acquisition;
(7) money market funds at least 95% of the assets of
which constitute Cash Equivalents of the kinds described in clauses (1)
through (6) of this definition; and
(8) in the case of any Restricted Subsidiary that is not
a Guarantor:
4
(A) direct obligations of the sovereign nation,
or any agency thereof, in which such Subsidiary is organized
and is conducting business or in obligations fully and
unconditionally guaranteed by such sovereign nation, or any
agency thereof; or
(B) investments of the type and maturity
described in clauses (1) through (7) above of foreign
obligors, which investments or obligors have ratings described
in such clauses or equivalent ratings from comparable foreign
rating agencies;
provided that the aggregate amount of any obligations and investments
that are at any time outstanding pursuant to this clause (8) shall not exceed
the United States dollar equivalent of $15.0 million.
"CD Account" shall have the definition provided such term in the
definition of "Back-to-Back Loans."
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect 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 properties or assets of the Company and its Subsidiaries taken as a
whole to any "person" (as that term is used in Section 13(d) of the
Exchange Act);
(2) the adoption by the stockholders of the Company of a
plan relating to the liquidation or dissolution of the Company;
(3) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is
that any "person" (as that term is used in Section 13(d) of the
Exchange Act) becomes the Beneficial Owner, directly or indirectly, of
more than 50% of the Voting Stock of the Company; or
(4) the Company consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which
any of the outstanding Voting Stock of the Company or such other Person
is converted into or exchanged for cash, securities or other property,
other than any such transaction where (a) the Voting Stock of the
Company outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the
outstanding shares of such Voting Stock of such surviving or transferee
Person (immediately after giving effect to such issuance) or (b) the
Voting Stock of the Company outstanding immediately prior to such
transaction constitutes a majority of the outstanding Voting Stock of
the Company immediately after giving effect to such issuance.
"Clearstream" means Clearstream Banking, S.A.
"Company" means Payless ShoeSource, Inc., a Delaware corporation, and
any and all successors thereto.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus,
without duplication:
5
(1) an amount equal to any extraordinary loss plus any
net loss realized by such Person or any of its Restricted Subsidiaries
in connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) the Consolidated Interest Charges of such Person and
its Restricted Subsidiaries for such period, to the extent that such
Consolidated Interest Charges were deducted in computing such
Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of
intangibles but excluding amortization of prepaid cash expenses that
were paid in a prior period) and other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period) of such Person
and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income; minus
(5) non-cash items increasing such Consolidated Net
Income for such period, other than the accrual of revenue in the
ordinary course of business;
in each case, on a consolidated basis and determined in accordance with
GAAP.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company will be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments, decrees, orders, statutes, rules and
governmental regulations applicable to that Restricted Subsidiary or its
stockholders.
"Consolidated Coverage Ratio" means, as of the date of determination,
with respect to any specified Person, the ratio of (1) the Consolidated Cash
Flow of such Person for the most recent four consecutive fiscal quarters ending
prior to the date of determination for which internal financial statements are
available to (2) the Consolidated Interest Charges of such Person for such four
fiscal quarters. If the specified Person or any of its Restricted Subsidiaries
incurs, assumes, Guarantees, repays, repurchases, redeems, defeases or otherwise
discharges any Indebtedness (other than ordinary working capital borrowings) or
issues, repurchases or redeems preferred stock subsequent to the commencement of
the four fiscal quarter period being used in the calculation of the Consolidated
Coverage Ratio and on or prior to the date of determination of the event for
which the calculation of the Consolidated Coverage Ratio is made (the
"Calculation Date"), then the Consolidated Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee, repayment,
repurchase, redemption, defeasance or other discharge of Indebtedness, or such
issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom, as if the same had occurred as of the beginning of such four
fiscal quarter period.
In addition, for purposes of calculating the Consolidated Coverage
Ratio:
6
(1) acquisitions that have been made by the specified
Person or any of its Restricted Subsidiaries, including through mergers
or consolidations, or any Person or any of its Restricted Subsidiaries
acquired by the specified Person or any of its Restricted Subsidiaries,
and including any related financing transactions and including
increases in ownership of Restricted Subsidiaries, during the four
quarter reference period or subsequent to such reference period and on
or prior to the Calculation Date will be given pro forma effect (in
accordance with Regulation S-X under the Securities Act) as if they had
occurred on the first day of the four quarter reference period;
(2) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses (and ownership interests therein) disposed of
prior to the Calculation Date, will be excluded;
(3) the Consolidated Interest Charges attributable to
discontinued operations, as determined in accordance with GAAP, and
operations or businesses (and ownership interests therein) disposed of
prior to the Calculation Date, will be excluded, but only to the extent
that the obligations giving rise to such Consolidated Interest Charges
will not be obligations of the specified Person or any of its
Restricted Subsidiaries following the Calculation Date;
(4) any Person that is a Restricted Subsidiary on the
Calculation Date will be deemed to have been a Restricted Subsidiary at
all times during such four quarter period;
(5) any Person that is not a Restricted Subsidiary on the
Calculation Date will be deemed not to have been a Restricted
Subsidiary at any time during such four quarter period; and
(6) if any Indebtedness bears a floating rate of
interest, the interest expense on such Indebtedness will be calculated
as if the rate in effect on the Calculation Date had been the
applicable rate for the entire period (taking into account any Hedging
Obligation applicable to such Indebtedness if such Hedging Obligation
has a remaining term as at the Calculation Date in excess of 12
months).
"Consolidated Interest Charges" means, with respect to any specified
Person for any period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs and
original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, imputed
interest with respect to Attributable Debt, commissions, discounts and
other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations in respect of interest
rates; plus
(2) the consolidated interest of such Person and its
Restricted Subsidiaries that was capitalized during such period; plus
(3) any interest accruing on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is
called upon; plus
7
(4) the product of (a) all dividends, whether paid or
accrued and whether or not in cash, on any series of preferred stock of
such Person or any of its Restricted Subsidiaries, other than dividends
on Equity Interests payable solely in Equity Interests of the Company
(other than Disqualified Stock) or to the Company or a Restricted
Subsidiary of the Company, times (b) a fraction, the numerator of which
is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in
accordance with GAAP.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity
method of accounting will be included only to the extent of the amount
of dividends or similar distributions paid in cash to the specified
Person or a Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income
is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its
stockholders;
(3) the cumulative effect of a change in accounting
principles will be excluded; and
(4) notwithstanding clause (1) above, the Net Income of
any Unrestricted Subsidiary will be excluded, whether or not
distributed to the specified Person or one of its Subsidiaries.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who:
(1) was a member of such Board of Directors on the date
of this Indenture; or
(2) was nominated for election or elected to such Board
of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination
or election.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit and Guaranty Agreement,
dated as of April 17, 2000, by and among Payless ShoeSource Finance, Inc., the
Company and certain of its subsidiaries as guarantors, Xxxxxxx Sachs Credit
Partners L.P., as sole lead arranger and sole syndication agent, Bank One, NA,
as administrative agent, First Union National Bank, as documentation agent and
the lenders party thereto, as amended by the First Amendment to Credit and
Guaranty Agreement, dated as of January 24, 2002, by and among Payless
ShoeSource Finance, Inc., the Company and certain of its subsidiaries as
guarantors, Xxxxxxx Xxxxx Credit Partners L.P., as sole lead arranger and sole
syndication agent, Bank One, NA, as administrative agent, First Union National
Bank, as documentation agent and the lenders party thereto, as further amended
by the Second Amendment to Credit and Guaranty Agreement, dated as of July 8,
2003, by and among Payless ShoeSource Finance, Inc., the Company and
8
certain of its subsidiaries as guarantors, Xxxxxxx Sachs Credit Partners L.P.,
as sole lead arranger and sole syndication agent, Bank One, NA, as
administrative agent, Wachovia Bank, National Association, as documentation
agent and the lenders party thereto, providing for up to $150.0 million of
revolving credit borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, restated, modified, renewed, refunded, replaced (whether
upon or after termination or otherwise) or refinanced (including by means of
sales of debt securities to institutional investors) in whole or in part and
from time to time.
"Credit Facilities" means one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks, investment banks, insurance companies, mutual funds or
other institutional lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated, modified,
renewed, refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional
investors) in whole or in part and from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit
Agreement; and
(2) after payment in full of all Obligations under the
Credit Agreement any other Senior Debt permitted under this Indenture
the principal amount of which is $25.0 million or more and that has
been designated by the Company as "Designated Senior Debt."
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Disqualified Stock" means any Capital Stock of the Company or any
Restricted Subsidiary of the Company that, by its terms (or by the terms of any
security into which it is convertible, or for which it is exchangeable, in each
case at the option of the holder thereof), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or redeemable at the option of the holder of the Capital Stock, in
whole or in part, on or prior to the date that is 91 days after the earlier of
the date on which (1) the Notes mature or (2) on which there are no Notes
outstanding; provided that only the portion of Capital Stock that so matures or
is mandatorily redeemable prior to such date shall be deemed to be Disqualified
Stock. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders of the Capital Stock
have the right to require the Company or any Restricted Subsidiary of the
Company to repurchase such Capital
9
Stock upon the occurrence of a Change of Control or an Asset Sale will not
constitute Disqualified Stock if the terms of such Capital Stock provide that
the Company or such Restricted Subsidiary may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 4.07 hereof. The amount of Disqualified Stock deemed to be
outstanding at any time for purposes of this Indenture will be the maximum
amount that the Company and its Restricted Subsidiaries may become obligated to
pay upon the maturity of, or pursuant to any mandatory redemption provisions of,
such Disqualified Stock, exclusive of accrued dividends.
"Domestic Subsidiary" means any wholly-owned Restricted Subsidiary of
the Company that was formed under the laws of the United States or any state of
the United States or the District of Columbia or any Restricted Subsidiary of
the Company that guarantees or otherwise provides direct credit support for any
Indebtedness of the Company.
"Eligible Bank" means (1) a commercial bank or its affiliates organized
under the laws of the United States, or any state thereof or the District of
Columbia that (a) is at least "adequately capitalized" (as defined in the
regulations of its primary United States Federal banking regulator) and (b) has
Tier 1 capital (as defined in such regulations) of not less than $100.0 million;
(2) a commercial bank or its affiliates organized under the laws of any other
country that (a) accepts deposits and makes loans in the ordinary course of its
business, (b) has affiliates in the Cayman Islands, Jersey Islands, British
Virgin Islands or any other country with similar tax laws, (c) is a member of
the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, (d) has total assets in excess of
$5.0 billion and (e) is acting through a branch or agency located in the country
in which it is organized, in the Cayman Islands, or in another country that is
also a member of the OECD; or (3) if in any particular country there is no
commercial bank organized under the laws of such country that (a) accepts
deposits and makes loans in the ordinary course of its business, (b) has
affiliates in the Cayman Islands, Jersey Islands, British Virgin Islands or any
other country with similar tax laws, and (c) has total assets in an amount which
ranks such commercial bank in terms of total assets in the top one-third of all
commercial banks in such country which both accept deposits and make loans in
the ordinary course of their businesses and have affiliates in the Cayman
Islands, Jersey Islands, British Virgin Islands or any other country with
similar tax laws.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering or sale of Equity Interests (other
than Disqualified Stock) of the Company.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear system.
"European Union" means the European Union, including the countries of
Austria, Belgium, Denmark, France, Finland, Germany, Greece, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom, but
not including any country which becomes a member of the European Union after the
date of this Indenture.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Guarantees" means the Subsidiary Guarantees of the Exchange
Notes.
"Exchange Notes" means the Notes issued in the Exchange Offer pursuant
to Section 2.06(f) hereof.
10
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture, until such amounts are repaid.
"Fair Market Value" means the value that would be paid by a willing
buyer to an unaffiliated willing seller in a transaction not involving distress
or necessity of either party, determined in good faith by the Board of Directors
of the Company (unless otherwise provided in this Indenture).
"Foreign Subsidiary" means any Subsidiary of the Company that is not a
Domestic Subsidiary.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Global Note Legend" means the legend set forth in Section 2.06(g)(2),
which is required to be placed on all Global Notes issued under this Indenture.
"Government Securities" means obligations issued or guaranteed as to
principal and interest by the United States of America or by a Person controlled
or supervised by and acting as an instrumentality of the government of the
United States of America pursuant to authority granted by the Congress of the
United States of America, and the payment for which the United States pledges
its full faith and credit.
"Guarantee" means any direct or indirect guarantee by any Person (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), in any manner including, without limitation, by way of a
pledge of assets or through letters of credit or reimbursement agreements in
respect thereof, of all or any part of any Indebtedness of any other Person
(whether arising by virtue of partnership arrangements, or by agreements to
keep-well, to purchase assets, goods, securities or services, to take or pay or
to maintain financial statement conditions or otherwise).
"Guarantors" means each of:
(1) Payless ShoeSource Finance, Inc., Dyelights Inc., PSS
Delaware Company 2, Inc., PSS Delaware Company 3, Inc., PSS Delaware
Company 4, Inc., Payless ShoeSource, Inc., Payless ShoeSource Gold
Value, Inc., Shoe Sourcing, Inc., Payless Purchasing Services, Inc.,
Eastborough, Inc., Payless ShoeSource Worldwide, Inc., PSS Labor
Leasing, Inc., PSS Investment I, Inc., PSS Investment III, Inc.,
Payless ShoeSource Distribution, Inc., Payless ShoeSource
Merchandising, Inc. and PSS Canada, Inc.; and
(2) any other Subsidiary of the Company that executes a
Subsidiary Guarantee in accordance with the provisions of this
Indenture;
11
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements (whether from fixed to
floating or from floating to fixed), interest rate cap agreements and
interest rate collar agreements;
(2) other agreements or arrangements designed to manage
interest rates or interest rate risk; and
(3) other agreements or arrangements designed to protect
such Person against fluctuations in currency exchange rates or
commodity prices.
"Holder" means a Person in whose name a Note is registered.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Immaterial Subsidiary" means, as of any date, any Restricted
Subsidiary whose total assets, as of that date, are less than $500,000 and whose
total revenues for the most recent 12-month period for which internal financial
statements are available do not exceed $500,000; provided that a Restricted
Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly
or indirectly, guarantees or otherwise provides direct credit support for any
other Indebtedness of the Company; provided, further, that a Restricted
Subsidiary will not be considered to be an Immaterial Subsidiary if its total
assets as of that date, together with the total assets of all other Immaterial
Subsidiaries as of that date, exceed $5.0 million in the aggregate, or if its
total revenues for the most recent 12-month period for which internal financial
statements are available, together with the total revenues of all other
Immaterial Subsidiaries for the most recent 12-month period for which internal
financial statements are available, exceed $5.0 million in the aggregate.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or
Attributable Debt in respect of sale and leaseback transactions;
(5) representing the balance deferred and unpaid of the
purchase price of any property or services due more than six months
after such property is acquired or such services are completed; or
12
(6) representing the net obligations of such Person under
any Hedging Obligations (the amount of any such obligations to be equal
at any time to the net termination value of such agreement or
arrangement giving rise to such obligation that would be payable by
such person at such time),
if, and to the extent that, any of the preceding items (other than letters of
credit, Attributable Debt and Hedging Obligations) would appear as a liability
upon a balance sheet of the specified Person prepared in accordance with GAAP.
In addition, the term "Indebtedness" includes all Indebtedness of others secured
by a Lien on any asset of the specified Person (whether or not such Indebtedness
is assumed by the specified Person) and, to the extent not otherwise included,
the Guarantee by the specified Person of any Indebtedness of any other Person.
"Indenture" means this Indenture, as amended or supplemented from time
to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $200,000,000 aggregate principal amount
of Notes issued under this Indenture on the date hereof.
"Initial Purchasers" means Xxxxxxx, Xxxxx & Co., Banc One Capital
Markets, Inc., Fleet Securities, Inc. and Wachovia Capital Markets, LLC.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees or other obligations), advances (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business) or capital contributions (by means of any transfer
of cash or other property to other or any payment for property or services for
the account of others), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided that none of (1) endorsements of negotiable
instruments and documents in the ordinary course of business, (2) payments to
trusts or similar entities relating to employee benefit plans of the Company and
(3) IRBs, shall be considered Investments. If the Company or any Subsidiary of
the Company sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Subsidiary of the Company, the
Company will be deemed to have made an Investment on the date of any such sale
or disposition equal to the Fair Market Value of the Company's Investments in
such Subsidiary that were not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.07 hereof. The acquisition by the
Company or any Subsidiary of the Company of a Person that holds an Investment in
a third Person will be deemed to be an Investment by the Company or such
Subsidiary in such third Person in an amount equal to the Fair Market Value of
the Investments held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of Section 4.07 hereof. Except as
otherwise provided in this Indenture, the amount of an Investment will be
determined at the time the Investment is made and without giving effect to
subsequent changes in value.
"IRB" means any industrial revenue bonds issued to provide financing to
the Company or any of its Restricted Subsidiaries, to the extent such industrial
revenue bonds are acquired and held by the Company or any of its Restricted
Subsidiaries.
13
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in The City of New York or at a place of payment are authorized or
required by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue on such payment for the intervening period. If a regular record date is a
Legal Holiday, the record date shall not be affected.
"Letter of Transmittal" means the letter of transmittal to be prepared
by the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (but not loss), together with any related
provision for taxes on such gain (but not loss), realized in connection
with: (a) any Asset Sale; or (b) the disposition of any securities by
such Person or any of its Restricted Subsidiaries or the extinguishment
of any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain (but not loss), together with
any related provision for taxes on such extraordinary gain (but not
loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Senior Debt, secured by a Lien on the asset or assets that were the subject of
such Asset Sale and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its
Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a
guarantor or otherwise, or (c) constitutes the lender;
(2) no default with respect to which (including any
rights that the holders of the Indebtedness may have to take
enforcement action against an Unrestricted Subsidiary) would
14
permit upon notice, lapse of time or both any holder of any other
Indebtedness of the Company or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or cause the payment of
the Indebtedness to be accelerated or payable prior to its Stated
Maturity; and
(3) as to which the lenders have been notified in writing
that they will not have any recourse to the stock or assets of the
Company or any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes shall be treated as a
single class for all purposes under this Indenture, and unless the context
otherwise requires, all references to the Notes shall include the Initial Notes
and any Additional Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating Officer, the
Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
13.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means any business conducted by the Company and
its Restricted Subsidiaries on the date of this Indenture and any business
related, ancillary or complimentary to, or reasonable extensions of, the
business of the Company or any of its Restricted Subsidiaries on the date of
this Indenture.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such
Investment:
(A) such Person becomes a Restricted Subsidiary
of the Company; or
15
(B) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company;
(4) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to and
in compliance with Sections 3.09 and 4.10 hereof;
(5) any acquisition of assets or Capital Stock solely in
exchange for the issuance of Equity Interests (other than Disqualified
Stock) of the Company;
(6) any Investments received in compromise or resolution
of (a) obligations of trade creditors or customers that were incurred
in the ordinary course of business of the Company or any of its
Restricted Subsidiaries, including pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency
of any trade creditor or customer; or (b) litigation, arbitration or
other disputes;
(7) Investments represented by Hedging Obligations;
(8) receivables owing to the Company or any Restricted
Subsidiary of the Company created or acquired in the ordinary course of
business and payable and dischargable in accordance with customary
trade terms;
(9) stock, obligations or securities received in
settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiaries or in satisfaction
of judgments or pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy of insolvency of a debtor;
(10) Investments in existence as of the date of this
Indenture;
(11) loans or advances to employees made in the ordinary
course of business of the Company or the Restricted Subsidiary of the
Company in an aggregate principal amount not to exceed $2.0 million at
any one time outstanding;
(12) repurchases of the Notes;
(13) Investments in non-wholly-owned Unrestricted
Subsidiaries that are not Domestic Subsidiaries of the Company having
an aggregate Fair Market Value (measured on the date each such
Investment was made and without regard to subsequent changes in value),
when taken together with all Investments made pursuant to this clause
(13) that are at the time outstanding not to exceed $50.0 million; and
(14) other Investments in any Person having an aggregate
Fair Market Value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (14)
that are at the time outstanding not to exceed $50.0 million.
"Permitted Junior Securities" means:
(1) Equity Interests in the Company or any Guarantor; or
16
(2) debt securities that are subordinated to all Senior
Debt and any debt securities issued in exchange for Senior Debt to
substantially the same extent as, or to a greater extent than, the
Notes and the Subsidiary Guarantees are subordinated to Senior Debt
under this Indenture.
"Permitted Liens" means:
(1) Liens on assets of the Company or any of its
Restricted Subsidiaries securing Senior Debt that was permitted by the
terms of this Indenture to be incurred;
(2) Liens in favor of the Company or the Guarantors;
(3) Liens on property of a Person existing at the time
such Person is merged with or into or consolidated with the Company or
any Subsidiary of the Company; provided that such Liens were in
existence prior to the contemplation of such merger or consolidation
and do not extend to any assets other than those of the Person merged
into or consolidated with the Company or the Subsidiary;
(4) Liens on property (including Capital Stock) existing
at the time of acquisition of the property by the Company or any
Subsidiary of the Company, provided that such Liens were in existence
prior to such acquisition, and not incurred in contemplation of such
acquisition;
(5) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by Section 4.09(b)(4) hereof covering only the
assets acquired with or financed by such Indebtedness;
(6) Liens existing on the date of this Indenture;
(7) Liens for taxes, assessments or governmental charges
or claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded; provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made
therefor;
(8) Liens imposed by law, such as carriers',
warehousemen's, landlord's and mechanics' Liens, in each case, incurred
in the ordinary course of business;
(9) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for payment of borrowed money or other Indebtedness), so
long as no foreclosure, sale or other similar proceedings have been
commenced with respect to any property on account thereof;
(10) survey exceptions, easements or reservations of, or
rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real property that were not
incurred in connection with Indebtedness and that do not in the
aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such
Person;
17
(11) Liens solely on any xxxx xxxxxxx money deposits made
by the Company or any of its Restricted Subsidiaries in connection with
any letter of intent or purchase agreement entered into by the Company
or such Restricted Subsidiary;
(12) Liens incurred in connection with the purchase or
shipping of goods or assets on the related assets or proceeds thereof
in favor of the seller or shipper of such goods or assets;
(13) Liens arising from filing precautionary UCC financing
statements relating solely to operating leases entered into in the
ordinary course of business;
(14) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(15) Any zoning or similar right of law reserved to or
vested in any government office or agency to control or regulate the
use of any real property;
(16) Licenses of patents, trademarks and other
intellectual property rights granted by the Company or any of its
Restricted Subsidiaries in the ordinary course of business and not
interfering in any respect with the ordinary conduct of the business of
the Company or such Restricted Subsidiaries taken as a whole;
(17) Liens consisting of judgment or judicial attachment
liens with respect to judgments that do not constitute an Event of
Default and in the aggregate do not exceed $10.0 million;
(18) Liens on CD Accounts incurred by a Back-to-Back
Guarantor solely to secure guaranties permitted under this Indenture;
(19) Liens created for the benefit of (or to secure) the
Notes (or Guarantees of the Notes);
(20) Liens to secure any Permitted Refinancing
Indebtedness permitted to be incurred under this Indenture; provided,
however, that:
(A) the new Lien shall be limited to all or part of
the same property and assets that secured or, under the
written agreements pursuant to which the original Lien arose,
could secure the original Lien (plus improvements and
accessions to, such property or proceeds or distributions
thereof); and
(B) the Indebtedness secured by the new Lien is not
increased to any amount greater than the sum of (i) the
outstanding principal amount or, if greater, committed amount,
of the Permitted Referencing Indebtedness and (ii) an amount
necessary to pay any fees and expenses, including premiums,
related to such refinancings, refunding, extension, renewal or
replacement;
(21) Liens to secure Indebtedness under IRBs; and
(22) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time
outstanding.
18
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to refund, refinance, replace, defease or discharge
other Indebtedness of the Company or any of its Restricted Subsidiaries (other
than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed
the principal amount (or accreted value, if applicable) of the
Indebtedness extended, refinanced, renewed, replaced, defeased or
refunded (plus all accrued interest on the Indebtedness and the amount
of all expenses and premiums incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a Weighted
Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a
final maturity date later than the final maturity date of, and is
subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company
or by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of July 28, 2003, among the Company, the Guarantors and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Company,
the Guarantors and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to the purchasers of Additional Notes to register such Additional
Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Global Note bearing the Private
Placement Legend and deposited with or on behalf of the Depositary and
registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes initially
sold in reliance on Rule 903 of Regulation S.
19
"Representative" means the indenture trustee or other trustee, agent or
representative for any Senior Debt.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"S&P" means Standard & Poor's Ratings Group.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(1) all Indebtedness of the Company or any Guarantor
outstanding under Credit Facilities and all Hedging Obligations with
respect thereto;
(2) any other Indebtedness of the Company or any
Guarantor permitted to be incurred under the terms of this Indenture,
unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right
of payment to the Notes or any Subsidiary Guarantee; and
(3) all Obligations with respect to the items listed in
the preceding clauses (1) and (2).
Notwithstanding anything to the contrary in the preceding, Senior Debt
will not include:
(1) any liability for federal, state, local or other
taxes owed or owing by the Company;
(2) any intercompany Indebtedness of the Company or any
of its Subsidiaries to the Company or any of its Affiliates;
20
(3) any trade payables; or
(4) Indebtedness which is classified as non-recourse in
accordance with GAAP or any unsecured claim arising in respect thereof
by reason of the application of section 1111(b)(1) of the Bankruptcy
Code.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Special Interest" means all Special Interest then owing pursuant to
the Registration Rights Agreement.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the documentation governing
such Indebtedness as of the date of this Indenture, and will not include any
contingent obligations to repay, redeem or repurchase any such interest or
principal prior to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital
Stock entitled (without regard to the occurrence of any contingency and
after giving effect to any voting agreement or stockholders' agreement
that effectively transfers voting power) to vote in the election of
directors, managers or trustees of the corporation, association or
other business entity is at the time owned or controlled, directly or
indirectly, by such specified Person or one or more of the other
Subsidiaries of such specified Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the
managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person
or one or more Subsidiaries of that Person (or any combination
thereof).
"Subsidiary Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, whether set
forth herein or separately executed pursuant to the provisions of this
Indenture. All references to the Subsidiary Guarantees shall include the
Exchange Guarantees.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA; provided that in the event the TIA is amended after
such date, "TIA" means, to the extent required by such amendments, the Trust
Indenture Act as so amended.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
21
"Unrestricted Definitive Note" means one or more Definitive Notes that
do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note substantially
in the form of Exhibit A attached hereto that bears the Global Note Legend and
that has the "Schedule of Exchanges of Interests in the Global Note" attached
thereto, and that is deposited with or on behalf of and registered in the name
of the Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary of the Company that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution thereof, but only to the extent that such
Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) except as permitted by Section 4.11 hereof, is not
party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless the terms of
any such agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those that
might be obtained at the time from Persons that are not Affiliates of
the Company;
(3) is a Person with respect to which neither the Company
nor any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company
or any of its Restricted Subsidiaries.
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors giving effect to such
designation and an Officers' Certificate certifying that such designation
complied with the preceding conditions and was permitted by Section 4.07 hereof.
If, at any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it will thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of
such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09 hereof, the Company will be in
default of such covenant. The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation will be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation will only be permitted if (1) such
Indebtedness is permitted under Section 4.09 hereof, calculated on a pro forma
basis as if such designation had occurred at the beginning of the four quarter
reference period and (2) no Default or Event of Default would be in existence
following such designation.
"U.S. Person" means a U.S. Person as defined in Rule 902(o) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that, as of such date, would be entitled to vote in the election of
the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness as of any date of determination, the number of years obtained by
dividing:
22
(1) the sum of the products obtained by multiplying (x)
the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at
final maturity, in respect of the Indebtedness, by (y) the number of
years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
Section 1.02 Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"............................................................. 4.11
"Asset Sale Offer".................................................................. 3.09
"Authentication Order".............................................................. 2.02
"Change of Control Offer"........................................................... 4.15
"Change of Control Payment"......................................................... 4.15
"Change of Control Payment Date".................................................... 4.15
"Covenant Defeasance"............................................................... 8.03
"DTC"............................................................................... 2.03
"Event of Default".................................................................. 6.01
"Excess Proceeds"................................................................... 4.10
"incur"............................................................................. 4.09
"Legal Defeasance".................................................................. 8.02
"Offer Amount"...................................................................... 3.09
"Offer Period"...................................................................... 3.09
"Paying Agent"...................................................................... 2.03
"Permitted Debt".................................................................... 4.09
"Payment Blockage Notice"........................................................... 10.03
"Purchase Date"..................................................................... 3.09
"Registrar"......................................................................... 2.03
"Restricted Payments"............................................................... 4.07
Section 1.03 Incorporation by Reference of TIA.
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;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the Notes and the Subsidiary Guarantees means the Company
and the Guarantors, respectively, and any successor obligor upon the Notes and
the Subsidiary Guarantees, respectively.
23
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and
transactions; and
(7) references to sections of or rules under the
Securities Act will be deemed to include substitute, replacement of
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of authentication
will be substantially in the form of Exhibit A hereto. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note will be dated the date of its authentication. The Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form will be substantially in
the form of Exhibit A attached hereto (including the Global Note Legend thereon
and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note will represent such of the outstanding Notes as will
be specified therein and each shall provide that it represents 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
24
represented thereby will 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 2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions of
the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream will be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated, the Note will nevertheless be
valid.
A Note will not be valid until authenticated by the manual signature of
the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company signed
by two Officers (an "Authentication Order"), authenticate Notes for original
issue.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with Holders or the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will 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. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company will notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to
act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will 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, premium or Special Interest, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default
25
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
(if other than the Company or a Subsidiary) will have no further liability for
the money. If the Company or a Subsidiary acts as Paying Agent, it will
segregate and hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or reorganization
proceedings relating to the Company, the Trustee will serve as Paying Agent for
the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Company will furnish to the Trustee at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA Section 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not 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 will be exchanged by
the Company for Definitive Notes if:
(1) 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 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;
(2) 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
(3) there has occurred and is continuing a Default or
Event of Default with respect to the Notes.
Upon the occurrence of either of the preceding events in (1), (2) or
(3) 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 2.07 and 2.10 hereof. Every Note
authenticated and delivered in exchange for, or in lieu of, a Global Note or any
portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof,
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 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes.
The transfer and exchange of beneficial interests in the Global Notes will be
effected through the Depositary, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes will be subject to 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 will
26
require compliance with either subparagraph (1) or (2) below, as applicable, as
well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend; provided, however, that prior to the expiration of the
Restricted Period, transfers of beneficial interests in the Regulation
S Global Note may not be made to a U.S. Person or for the account or
benefit of a U.S. Person (other than an Initial Purchaser). Beneficial
interests in any Unrestricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note. No written orders or instructions shall be
required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(1) above, the transferor of such beneficial interest must
deliver to the Registrar either:
(A) both:
(i) 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
(ii) instructions given in accordance
with the Applicable Procedures containing information
regarding the Participant account to be credited with
such increase; or
(B) both:
(i) a written order from a Participant
or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures 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
(ii) 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 consummation
of an Exchange Offer by the Company in accordance
with Section 2.06(f) hereof, the requirements of this
Section 2.06(b)(2) shall be deemed to have been
satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests
in the Restricted Global Notes. 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(s)
pursuant to Section 2.06(h) hereof.
27
(3) Transfer of Beneficial Interests to Another
Restricted Global Note. A beneficial interest in any Restricted Global
Note may be transferred to a Person who takes delivery thereof in the
form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2) above and
the Registrar receives the following:
(A) if the transferee will take delivery in the form
of a beneficial interest in the 144A Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form
of a beneficial interest in the Regulation S Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2)
thereof; and
(C) if the transferee will take delivery in the form
of a beneficial interest in the IAI Global Note, then the
transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may be
exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note if the exchange or transfer complies with the requirements of
Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of the beneficial interest to be
transferred, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a beneficial
interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a)
thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B
hereto, including the certifications in item (4)
thereof;
28
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to Persons who take delivery thereof in the form of, a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest in
a Restricted Global Note proposes to exchange such beneficial interest
for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred
to a QIB in accordance with Rule 144A, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred
to a Non-U.S. Person in an offshore transaction in accordance
with Rule 903 or Rule 904, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144, a certificate
to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred
to an Institutional Accredited Investor in reliance on an
exemption from the registration requirements of the Securities
Act other than those listed in subparagraphs (B) through (D)
above, a certificate to the effect set forth in Exhibit B
hereto, including the certifications, certificates and Opinion
of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred
to the Company or any of its Subsidiaries, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications in item (3)(b) thereof; or
29
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, 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 in a Restricted Global Note pursuant to this Section 2.06(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. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the holder of such beneficial interest, in the
case of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of Transmittal
that it is not (i) a Broker-Dealer, (ii) a Person
participating in the distribution of the Exchange Notes or
(iii) a Person who is an affiliate (as defined in Rule 144) of
the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes to
exchange such beneficial interest for a Definitive
Note that does not bear the Private Placement Legend,
a certificate from such holder in the form of Exhibit
C hereto, including the certifications in item (1)(b)
thereof; or
(ii) if the holder of such beneficial
interest in a Restricted Global Note proposes to
transfer such beneficial interest to a Person who
shall take delivery thereof in the form of a
Definitive Note that does not bear the Private
Placement Legend, a certificate from such holder in
the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the
30
Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to 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
2.06(b)(2) hereof, the Trustee will cause the aggregate principal
amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee
will 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 2.06(c)(3) will be registered in such name or names and
in such authorized denomination or denominations as the holder of such
beneficial interest requests through instructions to the Registrar from
or through the Depositary and the Participant or Indirect Participant.
The Trustee will deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(3)
will not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests
in Restricted Global Notes. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive Notes
to a Person who takes delivery thereof in the form of a beneficial
interest in a Restricted Global Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note
proposes to exchange such Note for a beneficial interest in a
Restricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore transaction in
accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable;
31
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration statement
under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in
item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the appropriate
Restricted Global Note, in the case of clause (B) above, the
144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI
Global Note.
(2) Restricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration
Rights Agreement;
(C) such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive
Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
C hereto, including the certifications in item (1)(c)
thereof; or
(ii) if the Holder of such Definitive
Notes proposes to transfer such Notes to a Person who
shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note,
a certificate from such Holder in the form of Exhibit
B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests or if the Applicable Procedures so
require, an Opinion of Counsel in form reasonably acceptable
to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the
restrictions on transfer contained herein and in the Private
Placement Legend are no longer required in order to maintain
compliance with the Securities Act.
32
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note at any time. Upon receipt of a request for
such an exchange or transfer, the Trustee will cancel the applicable
Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has not
yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted 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 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must 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. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the form
of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule
144A, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item
(1) thereof;
(B) if the transfer will be made pursuant to Rule 903
or Rule 904, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications in
item (2) thereof; and
(C) if the transfer will be made pursuant to any
other exemption from the registration requirements of the
Securities Act, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted
Definitive Notes. Any Restricted Definitive Note may be exchanged by
the Holder thereof for an Unrestricted Definitive Note or transferred
to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
33
(A) such exchange or transfer is effected pursuant to
the Exchange Offer in accordance with the Registration Rights
Agreement and the Holder, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the distribution
of the Exchange Notes or (iii) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer
pursuant to the Exchange Offer Registration Statement in
accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such Notes for
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto,
including the certifications in item (1)(d) thereof;
or
(ii) if the Holder of such Restricted
Definitive Notes proposes to transfer such Notes to a
Person who shall take delivery thereof in the form of
an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if
the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such
exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in
the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the form
of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the Unrestricted
Definitive Notes pursuant to the instructions from the Holder thereof.
(f) Exchange Offer. Upon the consummation of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered into the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal:
(A) any Exchange Notes they receive will be acquired
in the ordinary course of their business;
(B) they have no arrangement or understanding with
any Person to participate in the distribution of the Exchange
Notes;
34
(C) they are not affiliates (as defined in Rule 144)
of the Company;
(D) they are not engaged in, and do not intend to
engage in, the distribution of the Exchange Notes;
(E) if the Person is a Broker-Dealer, (x) such person
will receive Exchange Notes for such Person's own account in
exchange for Notes that were acquired as a result of
market-making activities or other trading activities and that
such Person will deliver a prospectus in connection with any
resale of such Exchange Notes, and (y) such person did not
purchase the Notes to be exchanged for the Exchange Notes in
the original issuance on the date of this Indenture; and
(F) they are not acting on behalf of any person who
could not truthfully and completely make the representations
in clauses (A) through (E) above; and
(2) Unrestricted Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below,
each Global Note and each Definitive Note (and all Notes
issued in exchange therefor or substitution thereof) shall
bear the legend in substantially the following form:
"THE NOTES EVIDENCED HEREBY HAVE BEEN ISSUED IN A TRANSACTION THAT WAS NOT
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT")
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A
TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR
(5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
(B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE
UNITED STATES AND OTHER JURISDICTIONS."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(4),
(c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or (f) of this
35
Section 2.06 (and all Notes issued in exchange therefor or
substitution thereof) will not bear the Private Placement
Legend.
(2) Global Note Legend. Each Global Note will 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 (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(h) 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 will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for 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 will be
reduced accordingly and an endorsement will 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 will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges,
the Company will execute and the Trustee will authenticate Global Notes
and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 or at the Registrar's request.
36
(2) No service charge will be made to a Holder of a
Global Note or to a Holder of a Definitive Note for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 8.05 hereof).
(3) The Registrar will not be required 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) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid and legally binding obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon
such registration of transfer or exchange.
(5) The Company will not be required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to exchange any
Note selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment
date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and
none of the Trustee, any Agent or the Company shall be affected by
notice to the contrary.
(7) The Trustee will authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(8) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile with the original to follow by first class mail.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and
the Trustee and the Company receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company will issue and the Trustee,
upon receipt of an Authentication Order, will authenticate a replacement Note if
the Trustee's requirements are met. If required by the Trustee or the Company,
an indemnity bond must be supplied by the Holder that is sufficient in the
judgment of the Trustee and the Company to protect the Company, the Trustee, any
Agent and any authenticating agent from any loss that any of them may suffer if
a Note is replaced. The Company may charge for its expenses in replacing a Note.
37
Every replacement Note issued pursuant to this Section 2.07 is an
additional obligation of the Company and will be entitled to all of the benefits
of this Indenture equally and proportionately with all other Notes duly issued
hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a
Note does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note; however, Notes held by the Company or a Subsidiary of
the Company shall not be deemed to be outstanding for purposes of Section
3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 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 the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the
Company or an Affiliate of any thereof) segregates and holds in trust, in
accordance with this Indenture, on a redemption date or maturity date, money
sufficient to pay all principal and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or maturing, as the case may
be, then on and after that date such Notes will be deemed to be no longer
outstanding and will cease to accrue interest.
Section 2.09 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 by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that a Responsible Officer of the Trustee knows are so owned will be
so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer,
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exchange or payment. The Trustee and no one else will cancel all Notes
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and will destroy canceled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
canceled Notes will be delivered to the Company. 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 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 CUSIP Numbers.
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Notes or as contained in any notice of redemption and
that reliance may be placed only on the other identification numbers printed on
the Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the "CUSIP" numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
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(1) if the Notes are listed on any national securities
exchange, in integral multiples of $1,000, in compliance with the
requirements of the principal national securities exchange on which the
Notes are listed; or
(2) if the Notes are not listed on any national
securities exchange, on a pro rata basis in integral multiples of
$1,000, by lot or by such method as the Trustee shall deem fair and
appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
integral multiples of $1,000; except that if all of the Notes of a Holder are to
be redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not an integral multiple of $1,000, shall be redeemed or
purchased. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption or purchase also apply to
portions of Notes called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company will mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Article 8 or Article 12 of this
Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) 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 upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) the place or places that payment will be made upon
presentation and surrender of the Notes to be redeemed, and that Notes
called for redemption must be surrendered to the Paying Agent to
collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
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(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(8) that no representation is made as to the correctness
or accuracy of the CUSIP number, if any, listed in such notice or
printed on the Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph. The notice, if mailed in the manner provided herein, shall
be presumed to have been given, whether or not the Holder receives such notice.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase price date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Special
Interest, if any, on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent will promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest and Special Interest, if any, on, all Notes to be redeemed or
purchased.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption or purchase date, interest will cease to accrue on
the Notes or the portions of Notes called for redemption or purchase. If a Note
is redeemed or purchased on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest shall be
paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is
not so paid upon surrender for redemption or purchase because of the failure of
the Company to comply with the preceding paragraph, interest shall be paid on
the unpaid principal, from the redemption or purchase date until such principal
is paid, and to the extent lawful on any interest not paid on such unpaid
principal, in each case at the rate provided in the Notes and in Section 4.01
hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount to the unredeemed or unpurchased portion of the Note
surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to August 1, 2006, the Company may, on any one or
more occasions, redeem up to 35% of the aggregate principal amount of Notes
issued under this Indenture at a redemption
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price of 108.25% of the principal amount thereof, plus accrued and unpaid
interest and Special Interest, if any, to the redemption date, with the net cash
proceeds of one or more Equity Offerings; provided that:
(1) at least 65% of the aggregate principal amount of
Notes originally issued under this Indenture (excluding Notes held by
the Company and its Subsidiaries) remains outstanding immediately after
the occurrence of such redemption; and
(2) the redemption occurs within 90 days of the date of
the closing of such Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to August 1, 2008.
(c) On or after August 1, 2008 the Company may, on any one or more
occasions, redeem all or a part of the Notes upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below, plus accrued and unpaid interest and Special Interest,
if any, thereon, to the applicable redemption date, if redeemed during the
twelve-month period beginning on August 1 of the years indicated below, subject
to the rights of Holders of such Notes on the relevant record date to receive
interest on the relevant interest payment date:
Year Percentage
---- ----------
2008................................... 104.125%
2009................................... 102.750%
2010................................... 101.375%
2011 and thereafter.................... 100.000%
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking
fund payments with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales and assets to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The Asset Sale Offer will remain open for
a period of at least 20 Business Days following its commencement and not more
than 30 Business Days, except to the extent that a longer period is required by
applicable law (the "Offer Period"). No later than three Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company will apply
all Excess Proceeds (the "Offer Amount") to the purchase of Notes and such other
pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than
the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
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If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest, and
Special Interest, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by
first class mail, a notice to the Trustee and each of the Holders, with a copy
to the Trustee. The notice will contain all instructions and materials necessary
to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The
notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment
will continue to accrue interest;
(4) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale Offer
will cease to accrue interest after the Purchase Date;
(5) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
(6) that Holders electing to have a Note purchased
pursuant to any Asset Sale 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, or transfer by book-entry transfer,
to the Company, a Depositary, if appointed by the Company, or a Paying
Agent at the address specified in the notice at least three days before
the Purchase Date;
(7) that Holders will be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and
other pari passu Indebtedness surrendered by Holders exceeds the Offer
Amount, the Company will select the Notes and other pari passu
Indebtedness to be purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness surrendered
(with such adjustments as may be deemed appropriate by the Company so
that only Notes in denominations of $1,000, or integral multiples
thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company will, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and will
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for
43
payment by the Company in accordance with the terms of this Section 3.09. The
Company, the Depositary or the Paying Agent, as the case may be, will promptly
(but in any case not later than five days after the Purchase Date) mail or
deliver to each tendering Holder an amount equal to the purchase price of the
Notes tendered by such Holder and accepted by the Company for purchase, and the
Company will promptly issue a new Note, and the Trustee, upon written request
from the Company will authenticate and mail or deliver such new Note to such
Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company will publicly announce the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if
any, and interest and Special Interest, if any, on the Notes on the dates and in
the manner provided in the Notes. Principal, premium, if any, and interest and
Special Interest, if any, will be considered paid on the date due if the Paying
Agent, if other than the Company or a Subsidiary thereof, holds as of 12:00 p.m.
(noon) Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Special Interest, if any, in the same manner on the dates and in the amounts set
forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the then applicable interest rate on the Notes to the extent lawful; it will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Special Interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New
York, an office or agency (which may be an office of the Trustee or an affiliate
of the Trustee, Registrar or co-registrar) where Notes may be surrendered for
registration of transfer or for exchange and where notices and demands to or
upon the Company in respect of the Notes and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
fails to maintain any such required office or agency or fails to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission will in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
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The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03
hereof.
Section 4.03 Reports.
(a) Whether or not required by the rules and regulations of the SEC, so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes or cause the Trustee to furnish to the Holders of Notes, within the time
periods specified in the SEC's rules and regulations (it being understood that
all such reports shall be deemed furnished at the time filed on the SEC's XXXXX
system):
(1) all quarterly and annual reports that would be
required to be filed with the SEC on Forms 10-Q and 10-K if the Company
were required to file such reports; and
(2) all current reports that would be required to be
filed with the SEC on Form 8-K if the Company were required to file
such reports.
All such reports will be prepared in all material respects in
accordance with all of the rules and regulations applicable to such reports.
Each annual report on Form 10-K will include a report on the Company's
consolidated financial statements by the Company's certified independent
accountants.
In addition, the Company will file a copy of each of the reports
referred to in clauses (1) and (2) above with the SEC for public availability
within the time periods specified in the SEC's rules and regulations applicable
to such reports (unless the SEC will not accept such a filing) and will post the
reports on its website within those time periods. The Company will at all times
comply with TIA Section 314(a).
(b) If at any time, the Company is no longer subject to the periodic
reporting requirements of the Exchange Act for any reason, the Company will
nevertheless continue filing the reports specified in Section 4.03(a) hereof
with the SEC within the time periods specified above unless the SEC will not
accept such a filing. The Company agrees that it will not take any action for
the purpose of causing the SEC not to accept any such filings. If,
notwithstanding the foregoing, the SEC will not accept the Company's filings for
any reason, the Company will post the reports referred to in the second
paragraph of Section 4.03(a) hereof on its website within the time periods that
would apply if the Company were required to file those reports with the SEC.
If the Company has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
Section 4.03(a) hereof will include a reasonably detailed presentation, either
on the face of the financial statements or in the footnotes thereto of the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
(c) For so long as any Notes remain outstanding, at any time they are
not required to file the reports required by Section 4.03(a) and (b) hereof with
the SEC, the Company and the Guarantors will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate
45
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, whether or
not to the best of his or her knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default has occurred, describing all such Defaults or Events of Default of which
he or she may have knowledge and what action the Company is taking or proposes
to take with respect thereto) and whether or not to the best of his or her
knowledge any event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon, but in no event later than five Business
Days after, any Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay, extension
or usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company and
each of the Guarantors (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment
or distribution in respect of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or payable to the Company or a
Restricted Subsidiary of the Company);
46
(2) purchase, redeem or otherwise acquire or retire for
value (including without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company;
(3) make any payment on or in respect of, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness of the Company or any Guarantor that is contractually
subordinated to the Notes or the Subsidiary Guarantees (excluding any
intercompany Indebtedness between or among the Company and any of its
Restricted Subsidiaries), except payments of interest or principal at
the Stated Maturity thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) 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 has occurred and is
continuing or would occur as a consequence of such Restricted Payment;
and
(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four fiscal
quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Coverage Ratio
test set forth in Section 4.09(a) hereof; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries since the date of this Indenture (excluding
Restricted Payments permitted by clauses (2), (3), (4) (6), (7) and (8)
of Section 4.07(b) hereof), is less than the sum, without duplication
of:
(A) 50% of the Consolidated Net Income of the Company
for the period (taken as one accounting period) from 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 Net Income for such period is a deficit,
less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds, or the
Fair Market Value of assets or property other than cash
(provided, that in the case of assets or property other than
cash with a Fair Market Value in excess of $20.0 million, the
Company will deliver to the Trustee an opinion as to the
fairness to the Company of such transaction from a financial
point of view issued by an accounting, appraisal or investment
banking firm of national standing), received by the Company
since the date of this Indenture as a contribution to its
common equity capital or from the issue or sale of Equity
Interests 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 Equity Interests (other than Equity
Interests (or Disqualified Stock or convertible debt
securities) sold to a Subsidiary of the Company), plus
(C) to the extent that any Restricted Investment that
was made after the date of this Indenture is sold for cash or
otherwise liquidated or repaid for cash, the lesser of (i)
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the cash return of capital with respect to such Restricted
Investment (less the cost of disposition, if any) and (ii) the
initial amount of such Restricted Investment, plus
(D) to the extent that any Unrestricted Subsidiary of
the Company designated as such after the date of this
Indenture is redesignated as a Restricted Subsidiary after the
date of this Indenture, the lesser of (i) the Fair Market
Value of the Company's Investment in such Subsidiary as of the
date of such redesignation or (ii) the Fair Market Value as of
the date on which such Subsidiary was originally designated as
an Unrestricted Subsidiary after the date of this Indenture,
plus
(E) 50% of any dividends received by the Company or a
Restricted Subsidiary of the Company that is a Guarantor after
the date of this Indenture from an Unrestricted Subsidiary of
the Company, to the extent that such dividends were not
otherwise included in Consolidated Net Income of the Company
for such period.
(b) The provisions of Section 4.07(a) will not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration of the dividend, if at the date of declaration the
dividend payment would have complied with the provisions of this
Indenture;
(2) the making of any Restricted Payment in exchange for,
or out of the net cash proceeds of any substantially concurrent sale
(other than to a Subsidiary of the Company) of, Equity Interests of the
Company (other than Disqualified Stock) or from the substantially
concurrent contribution of common equity capital to the Company;
provided that the amount of any such net cash proceeds that are
utilized for any such Restricted Payment will be excluded from clause
(3)(B) of Section 4.07(a) hereof;
(3) the defeasance, redemption, repurchase or other
acquisition of Indebtedness of the Company or any Guarantor that is
contractually subordinated to the Notes or to any Subsidiary Guarantee
with the net cash proceeds from a substantially concurrent incurrence
of Permitted Refinancing Indebtedness;
(4) so long as no Default has occurred and is continuing
or would be caused thereby, the payment of any dividend (or, in the
case of any partnership or limited liability company, any similar
distribution) by a Restricted Subsidiary of the Company to the holders
of its Equity Interests on a pro rata basis;
(5) so long as no Default has occurred and is continuing
or would be caused thereby, the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests of the
Company or any Restricted Subsidiary of the Company held by any current
or former officer, director or employee of the Company or any of its
Restricted Subsidiaries pursuant to any equity subscription agreement,
stock option agreement, shareholders' agreement or similar agreement;
provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $1.0
million in any year;
(6) the repurchase of Equity Interests deemed to occur
upon the exercise of stock options to the extent such Equity Interests
represent a portion of the exercise price of those stock options;
48
(7) the declaration and payment of regularly scheduled or
accrued dividends to holders of any class or series of Disqualified
Stock of the Company or any Restricted Subsidiary of the Company issued
on or after the date of this Indenture in accordance with the
Consolidated Coverage test described in Section 4.09(a) hereof; and
(8) so long as no Default has occurred and is continuing
or would be caused thereby, other Restricted Payments in an aggregate
amount not to exceed $50.0 million since the date of this Indenture.
The amount of all Restricted Payments (other than Cash Equivalents)
will be the Fair Market Value on the date of the Restricted Payment of the
asset(s) or securities proposed to be transferred or issued by the Company or
such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment.
Section 4.08 Dividend and Other Payment Restrictions Affecting Subsidiaries.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary of the Company to:
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries, or
in respect of any other interest or participation in, or measured by,
its profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
(b) The restrictions in Section 4.08(a) will not apply to encumbrances
or restrictions existing under or by reason of:
(1) agreements in effect at or entered into on the date
of this Indenture, including, without limitation, agreements governing
Existing Indebtedness and Credit Facilities as in effect on the date of
this Indenture and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or
refinancings of those agreements; provided that the amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive, taken
as a whole, with respect to such dividend and other payment
restrictions than those contained in those agreements on the date of
this Indenture;
(2) this Indenture, the Notes and the Subsidiary
Guarantees;
(3) applicable law, rule, regulation or order;
(4) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Person, or the
property or assets
49
of the Person, so acquired, provided that, in the case of Indebtedness,
such Indebtedness was permitted by the terms of this Indenture to be
incurred;
(5) customary non-assignment provisions in contracts and
licenses entered into in the ordinary course of business;
(6) purchase money obligations for property acquired in
the ordinary course of business and Capital Lease Obligations that
impose restrictions on the property purchased or leased of the nature
described in clause (3) of Section 4.08(a);
(7) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending the sale or other disposition;
(8) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the
Indebtedness being refinanced;
(9) Liens permitted to be incurred under the provisions
of Section 4.12 hereof that limit the right of the debtor to dispose of
the assets subject to such Liens;
(10) provisions limiting the disposition or distribution
of assets or property in joint venture agreements, asset sale
agreements, sale-leaseback agreements, stock sale agreements and other
similar agreements entered into with the approval of the Company's
Board of Directors, which limitation is applicable only to the assets
that are the subject of such agreements; and
(11) restrictions on Cash Equivalents or other deposits or
net worth imposed by customers under contracts entered into in the
ordinary course of business.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock;
provided, however, that the Company may incur Indebtedness (including Acquired
Debt) or issue Disqualified Stock, and the Guarantors may incur Indebtedness or
issue preferred stock, if the Consolidated Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock or preferred stock is issued
would have been at least 2.0 to 1, determined on a pro forma basis (including a
pro forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred or the preferred stock or Disqualified Stock had
been issued, as the case may be, at the beginning of the four fiscal quarter
period.
(b) The provisions of Section 4.09(a) will not prohibit the incurrence
of any of the following items of Indebtedness (collectively, "Permitted Debt"):
(1) the incurrence by the Company and any Restricted
Subsidiary of the Company of additional Indebtedness and letters of
credit under Credit Facilities in an aggregate principal amount at any
one time outstanding under this clause (1) (with letters of credit
being deemed to
50
have a principal amount equal to the maximum potential liability of the
Company and its Restricted Subsidiaries thereunder) not to exceed the
greater of (a) $200.0 million or (b) the amount of the Borrowing Base
as of the date of such incurrence, less, in the case of clause (a)
above, the aggregate amount of all Net Proceeds of Asset Sales applied
by the Company or any of its Restricted Subsidiaries since the date of
this Indenture to repay any term Indebtedness under a Credit Facility
or to repay any revolving credit Indebtedness under a Credit Facility
and effect a corresponding commitment reduction thereunder pursuant to
Section 4.10 hereof;
(2) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Subsidiary
Guarantees to be issued on the date of this Indenture and the Exchange
Notes and the related Subsidiary Guarantees to be issued pursuant to
the Registration Rights Agreement;
(4) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by Capital Lease
Obligations, mortgage financings or purchase money obligations, in each
case, incurred for the purpose of financing all or any part of the
purchase price or cost of design, construction, installation or
improvement of property, plant or equipment used in the business of the
Company or any of its Restricted Subsidiaries, in an aggregate
principal amount (or accreted value, as applicable) at any time
outstanding pursuant to this clause (4), including all Permitted
Refinancing Indebtedness incurred to refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to this clause
(4), not to exceed $10.0 million at any time outstanding;
(5) the incurrence by the Company or any of its
Restricted Subsidiaries of Permitted Refinancing Indebtedness in
exchange for, or the net proceeds of which are used to refund,
refinance, replace, defease or discharge Indebtedness (other than
intercompany Indebtedness) that was permitted by this Indenture to be
incurred under Section 4.09(a) or clauses (2), (3), (4), (5), (12) or
(13) of this Section 4.09(b);
(6) the incurrence by the Company or any of its
Restricted Subsidiaries of intercompany Indebtedness between or among
the Company and any of its Restricted Subsidiaries; provided, however,
that:
(A) any subsequent issuance or transfer (other than a
pledge to secure Indebtedness that is otherwise permitted by
this Indenture) of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or
a Guarantor; and
(B) any sale or other transfer of any such
Indebtedness (other than a pledge to secure Indebtedness that
is otherwise permitted under this Indenture) to a Person that
is not either the Company or a Guarantor;
will be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Guarantor, as the case may be, that
was not permitted by this clause (6);
(7) the issuance by any of the Company's Restricted
Subsidiaries to the Company or to any of its Restricted Subsidiaries of
shares of preferred stock; provided, however, that:
51
(A) any subsequent issuance or transfer (other than a
pledge to secure Indebtedness that is otherwise permitted by
this Indenture) of Equity Interests that results in any such
preferred stock being held by a Person other than the Company
or a Restricted Subsidiary of the Company; and
(B) any sale or other transfer (other than a pledge
to secure Indebtedness that is otherwise permitted by this
Indenture) of any such preferred stock to a Person that is not
either the Company or a Restricted Subsidiary of the Company;
will be deemed, in each case, to constitute an issuance of such
preferred stock by such Restricted Subsidiary that was not permitted by
this clause (7);
(8) the incurrence by the Company or any of its
Restricted Subsidiaries of Hedging Obligations in the ordinary course
of business;
(9) the guarantee by the Company or any of the Guarantors
of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred by another provision of this
Section 4.09; provided that if the Indebtedness being guaranteed is
subordinated to or pari passu with the Notes, then the guarantee shall
be subordinated to the same extent as the Indebtedness guaranteed;
(10) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness in respect of IRBs, workers'
compensation claims, self-insurance obligations, bankers' acceptances,
performance and surety bonds in the ordinary course of business;
(11) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or similar
instrument inadvertently drawn against insufficient funds, so long as
such Indebtedness is covered within five Business Days;
(12) Indebtedness arising from agreements of the Company
or a Restricted Subsidiary of the Company providing for
indemnification, adjustment of purchase price or similar obligations,
in each case, incurred or assumed in connection with the disposition of
any business, assets or Capital Stock of a Restricted Subsidiary of the
Company; provided that the maximum aggregate liability in respect of
all such Indebtedness shall at no time exceed the gross proceeds
actually received by the Company and its Restricted Subsidiary in
connection with such disposition;
(13) the incurrence by any Restricted Subsidiary of the
Company of Indebtedness under a Back-to-Back Loan; and
(14) the incurrence by the Company or any of its
Restricted Subsidiaries of additional Indebtedness in an aggregate
principal amount (or accreted value, as applicable) at any time
outstanding pursuant to this clause (14), including all Permitted
Refinancing Indebtedness incurred to refund, refinance, replace,
defease or discharge any Indebtedness incurred pursuant to this clause
(14), not to exceed $50.0 million.
For purposes of determining compliance with this Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (14) above,
or is entitled to be incurred pursuant to Section 4.09(a), the Company will be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all
52
or a portion of such item of Indebtedness, in any manner that complies with this
Section 4.09. Indebtedness under Credit Facilities outstanding on the date of
this Indenture will initially be deemed to have been incurred on such date in
reliance on the exemption provided by clause (1) of the definition of Permitted
Debt. The accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same terms and the payment of dividends on Disqualified
Stock in the form of additional shares of the same class of Disqualified Stock
will not be deemed to be an incurrence of Indebtedness or an issuance of
Disqualified Stock for purposes of this Section 4.09; provided, in each such
case, that the amount thereof is included in Consolidated Interest Charges of
the Company as accrued. Notwithstanding any other provision of this Section
4.09, the maximum amount of Indebtedness that the Company or any Restricted
Subsidiary of the Company may incur pursuant to this Section 4.09 shall not be
deemed to be exceeded solely as a result of fluctuations in exchange rates or
currency values.
(c) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of Indebtedness, in the case of
any Indebtedness issued with original issue discount;
(2) the principal amount of the Indebtedness, in the case
of any other Indebtedness; and
(3) in respect of Indebtedness of another Person secured
by a Lien on the assets of the specified Person, the lesser of:
(A) the Fair Market Value of such asset at the date
of determination, and
(B) the amount of the Indebtedness of the other
Person.
Section 4.10 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the
case may be) receives consideration at the time of the Asset Sale at
least equal to the Fair Market Value of the assets or Equity Interests
issued or sold or otherwise disposed of in such Asset Sale; and
(2) at least 75% of the consideration received in the
Asset Sale by the Company or such Restricted Subsidiary is in the form
of Cash Equivalents. For purposes of this provision, each of the
following will be deemed to be Cash Equivalents:
(A) any liabilities, as shown on the Company's most
recent balance sheet, of the Company or any Restricted
Subsidiary of the Company (other than contingent liabilities
and liabilities that are by their terms subordinated to the
Notes or any Subsidiary Guarantee) that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted
Subsidiary from further liability with respect to such
liabilities;
(B) any securities, notes or other obligations
received by the Company or any such Restricted Subsidiary from
such transferee that are contemporaneously, subject to
ordinary settlement periods, converted by the Company or such
Restricted Subsidiary
53
into Cash Equivalents, to the extent of the Cash Equivalents
received in that conversion; and
(C) any stock or assets of the kind referred to in
clauses (2) or (4) of the next paragraph.
Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, the Company (or the applicable Restricted Subsidiary, as the case may be)
may apply such Net Proceeds, at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid
is revolving credit Indebtedness, to correspondingly reduce commitments
with respect thereto;
(2) to acquire all or substantially all of the assets of,
or any Capital Stock of, another Permitted Business, if, after giving
effect to any such acquisition of Capital Stock, the Permitted Business
is or becomes a Restricted Subsidiary of the Company;
(3) to make a capital expenditure; or
(4) to acquire other assets that are not classified as
current assets under GAAP and that are used or useful in a Permitted
Business.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce revolving credit borrowings or otherwise invest the Net
Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in, and within the periods set forth in, the preceding paragraph will
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $10.0 million, within five days thereof, the Company will make an Asset
Sale Offer to all Holders of Notes and all holders of other Indebtedness that is
pari passu with the Notes containing provisions similar to those set forth in
this Indenture with respect to offers to purchase or redeem with the proceeds of
sales of assets in accordance with Section 3.09 hereof to purchase the maximum
principal amount of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer
will be equal to 100% of principal amount plus accrued and unpaid interest and
Special Interest, if any, to the date of purchase, and will be payable in cash.
If any Excess Proceeds remain after consummation of an Asset Sale Offer, the
Company may use those Excess Proceeds for any purpose not otherwise prohibited
by this Indenture. If the aggregate principal amount of Notes and other pari
passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of
Excess Proceeds, the Trustee will select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset to zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with Sections 3.09 or
4.10 hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under
Section 3.09 or 4.10 hereof by virtue of such compliance.
54
Section 4.11 Transactions with Affiliates.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company (each an "Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary
than those that would have been obtained in a comparable transaction by
the Company or such Restricted Subsidiary with an unrelated Person; and
(2) the Company delivers to the Trustee:
(A) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million, a resolution of the
Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the
Board of Directors; and
(B) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $20.0 million, an opinion as to the
fairness to the Company or such Subsidiary of such Affiliate
Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national
standing.
(b) The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of Section 4.11(a):
(1) any employment agreement, employee benefit plan,
officer and director indemnification agreement or any similar
arrangement (including payments, awards or grants in cash, securities
and other compensation, benefits and indemnity) entered into by the
Company or any of its Restricted Subsidiaries in the ordinary course of
business;
(2) transactions between or among the Company and any of
its Restricted Subsidiaries;
(3) transactions with a Person (other than an
Unrestricted Subsidiary of the Company) that is an Affiliate of the
Company solely because the Company owns, directly or through a
Restricted Subsidiary, an Equity Interest in, or controls, such Person;
(4) payment of reasonable directors' fees to Persons that
are not otherwise Affiliates of the Company;
(5) any issuance of Equity Interests (other than
Disqualified Stock) of the Company to Affiliates of the Company or any
Restricted Subsidiary of the Company;
(6) Restricted Payments that do not violate Section 4.07
hereof; and
(7) loans or advances to employees in the ordinary course
of business not to exceed $2.0 million in the aggregate at any one time
outstanding.
55
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien of any kind securing Indebtedness, Attributable Debt or trade
payables on any asset now owned or hereafter acquired, except Permitted Liens,
unless contemporaneously with the incurrence of such Lien effective provision is
made to secure the indebtedness due under this Indenture and the Notes, or in
respect of Liens on any Restricted Subsidiary's property or assets, any
Subsidiary Guarantee of such Restricted Subsidiary, equally and ratably with (or
prior to in the case of Liens with respect to Indebtedness that is contractually
subordinated to the Notes), the Indebtedness secured by such Lien for so long as
such Indebtedness is so secured.
Section 4.13 Line of Business.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in any business other than Permitted Businesses, except
to such extent as would not be material to the Company and its Restricted
Subsidiaries taken as a whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same
may be amended from time to time) of the Company or any such
Subsidiary; and
(2) 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 Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries, taken as a whole, and
that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes
in cash at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Special Interest, if any, on the
Notes repurchased, to the date of purchase (the "Change of Control Payment"),
subject to the rights of Holders on the relevant record date to receive interest
due on the relevant interest payment date. Within 30 days following any Change
of Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which shall
be no earlier than 30 days and no later than 60 days from the date such
notice is mailed (the "Change of Control Payment Date");
56
(3) that any Note not tendered will continue to accrue
interest;
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant
to the Change of Control Offer will cease to accrue interest after the
Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Notes completed, to the Company, a Depositary, if
appointed by the Company, or the Paying Agent at the address specified
in the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his election
to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change in Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of this Section 4.15, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under this Section 4.15 by virtue of such compliance.
(b) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions of Notes
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of Notes
properly tendered and accepted for payment; and
(3) deliver or cause to be delivered to the Trustee the
Notes properly tendered and accepted for payment together with an
Officers' Certificate stating the aggregate principal amount of Notes
or portions of Notes being purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered and accepted for payment the Change of Control Payment in respect of
such Notes, and the Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in principal amount
to any unpurchased portion of the Notes surrendered, if any; provided that each
new Note will be in a principal amount of $1,000 or an integral multiple of
$1,000.
Prior to complying with any of the provisions of this Section 4.15, but
in any event within 90 days following a Change of Control, the Company will
either repay all outstanding Senior Debt or obtain
57
the requisite consents, if any, under all agreements governing outstanding
Senior Debt to permit the repurchase of Notes required by this Section 4.15. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15, the
Company will not be required to make a Change of Control Offer upon a Change of
Control if (i) a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 hereof and that third party purchases all Notes properly tendered
and not withdrawn under the Change of Control Offer, or (ii) notice of
redemption has been given pursuant to Section 3.07 hereof, unless and until
there is a default in payment of the applicable redemption price.
Section 4.16 No Layering of Debt.
The Company will not incur any Indebtedness that is contractually
subordinate or junior in right of payment to any Senior Debt of the Company and
senior in right of payment to the Notes. No Guarantor will incur any
Indebtedness that is contractually subordinate or junior in right of payment to
the Senior Debt of such Guarantor and senior in right of payment to such
Guarantor's Subsidiary Guarantee. No such Indebtedness will be considered to be
senior or subordinated by virtue of being secured on a first or junior priority
basis.
Section 4.17 Limitation on Sale and Leaseback Transactions.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any sale and leaseback transaction; provided that
the Company or any of its Restricted Subsidiaries may enter into a sale and
leaseback transaction if:
(1) the Company or that Restricted Subsidiary, as
applicable, could have (a) incurred Indebtedness in an amount equal to
the Attributable Debt relating to such sale and leaseback transaction
under the Consolidated Coverage Ratio test in Section 4.09(a) hereof
and (b) incurred a Lien to secure such Indebtedness pursuant to Section
4.12 hereof;
(2) the gross cash proceeds of that sale and leaseback
transaction are at least equal to the Fair Market Value of the property
that is the subject of that sale and leaseback transaction; and
(3) the transfer of assets in that sale and leaseback
transaction is permitted by, and the Company applies the proceeds of
such transaction in compliance with, Sections 3.09 and 4.10 hereof.
Section 4.18 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
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Section 4.19 Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries acquires or
creates another Domestic Subsidiary after the date of this Indenture, then that
newly acquired or created Domestic Subsidiary will become a Guarantor and
execute a supplemental indenture in the form of Exhibit E hereto; provided, that
any Domestic Subsidiary that constitutes an Immaterial Subsidiary need not
become a Guarantor until such time as it ceases to be an Immaterial Subsidiary.
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Subsidiary to
be an Unrestricted Subsidiary if that designation would not cause a Default. If
a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
aggregate Fair Market Value of all outstanding Investments owned by the Company
and its Restricted Subsidiaries in the Subsidiary designated as Unrestricted
will be deemed to be an Investment made as of the time of the designation and
will reduce the amount available for Restricted Payments under Section 4.07
hereof or under one or more clauses of the definition of Permitted Investments,
as determined by the Company. That designation will only be permitted if the
Investment would be permitted at that time and if the Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary. The Board of
Directors of the Company may redesignate any Unrestricted Subsidiary to be a
Restricted Subsidiary if that redesignation would not cause a Default.
Section 4.21 Changes in Covenants when Notes Rated Investment Grade.
If on any date following the date of this Indenture:
(1) the Notes are rated Baa3 or better by Xxxxx'x and
BBB- or better by S&P (or, if either such entity ceases to rate the
Notes for reasons outside of the control of the Company, the equivalent
investment grade credit rating from any other "nationally recognized
statistical rating organization" within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a
replacement agency); and
(2) no Default or Event of Default shall have occurred
and be continuing,
then, beginning on that day and continuing at all times thereafter
regardless of any subsequent changes in the rating of the Notes, the
covenants in Sections 4.07, 4.08, 4.09, 4.10, 4.11 and 4.20 and clause
(4) of Section 5.01 of this Indenture will no longer be applicable to
the Notes.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey, lease or otherwise dispose
of all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person, unless:
(1) either:
(A) the Company is the surviving corporation; or
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(B) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, conveyance or other
disposition has been made is a corporation organized or
existing under the laws of the United States, any state of the
United States or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other disposition
shall have been made assumes all the obligations of the Company under
the Notes, this Indenture and the Registration Rights Agreement
pursuant to agreements reasonably satisfactory to the Trustee;
(3) immediately after such transaction, no Default or
Event of Default exists; and
(4) the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which
such sale, assignment, transfer, conveyance or other disposition has
been made will, on the date of such transaction after giving pro forma
effect thereto and any related financing transactions as if the same
had occurred at the beginning of the applicable four-quarter period, be
permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Consolidated Coverage Ratio test set forth in Section 4.09(a)
hereof.
In addition, the Company may not, directly or indirectly, lease all or
substantially all of its properties or assets, in one or more related
transactions, to any other Person.
This Section 5.01 will not apply to (a) a merger of the Company with an
Affiliate solely for the purpose of reincorporating the Company in another
jurisdiction; and (b) any merger, consolidation, sale, transfer, assignment,
conveyance, lease or other disposition of assets between or among the Company
and its Restricted Subsidiaries.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Notes except in the case of a sale of all of
the Company's assets in a transaction that is subject to, and that complies with
the provisions of, Section 5.01 hereof.
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ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Company defaults for 30 days in the payment when
due of interest on, or Special Interest in respect of, the Notes
whether or not prohibited by the subordination provisions of this
Indenture;
(2) the Company defaults in the payment when due (at
maturity, upon redemption or otherwise) of the principal of, or
premium, if any, on the Notes, whether or not prohibited by the
subordination provisions of this Indenture;
(3) the Company or any of its Restricted Subsidiaries
fails to comply with the provisions of Sections 3.09, 4.10, 4.15 or
5.01 hereof;
(4) the Company fails to comply with any of its
obligations under Sections 4.07 or 4.09 hereof for 30 days after notice
to the Company by the Trustee;
(5) the Company fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture
or the Notes for 60 days after notice to the Company from the Trustee;
(6) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries),
whether such Indebtedness or guarantee now exists, or is created after
the date of this Indenture, if that default:
(A) is caused by a failure to pay principal at final
maturity on such Indebtedness following the expiration of the
grace period provided in such Indebtedness on the date of such
default (a "Payment Default"); or
(B) results in the acceleration of such Indebtedness
prior to its express maturity,
and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has
been so accelerated, aggregates in excess of $20.0 million;
(7) 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 Restricted Subsidiaries, which
judgment or judgments are not covered by insurance and not paid,
discharged or stayed for a period of 60 days; provided that the
aggregate of all such undischarged judgments is in excess of $20.0
million;
(8) the Company or any of its Restricted Subsidiaries
that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, when taken together, would constitute
a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
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(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a custodian of it
or for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors,
(E) generally is not paying its debts as they become
due; or
(9) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, when taken
together, would constitute a Significant Subsidiary in an
involuntary case;
(B) appoints a custodian of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or
any group of Restricted Subsidiaries that, when taken
together, would constitute a Significant Subsidiary or for all
or substantially all of the property of the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries that, when taken
together, would constitute a Significant Subsidiary; or
(C) orders the liquidation of the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary
or any group of Restricted Subsidiaries that, when taken
together, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
(10) except as permitted by this Indenture, any Subsidiary
Guarantee by a Guarantor that is a Significant Subsidiary or any group
of Subsidiary Guarantees by a group of Guarantors that, when taken
together, would constitute a Significant Subsidiary is held in any
judicial proceeding to be unenforceable or invalid or shall cease for
any reason to be in full force and effect or any Guarantor, or any
Person acting on behalf of any Guarantor, shall deny or disaffirm its
obligations under its Subsidiary Guarantee.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary that
is a Significant Subsidiary or any group of Restricted Subsidiaries that, when
taken together, would constitute a Significant Subsidiary, all outstanding Notes
will become due and payable immediately without further action or notice. If any
other 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 due and payable immediately.
Upon any such declaration, the Notes shall become due and payable
immediately. Notwithstanding the foregoing, if an Event of Default specified in
clause (8) or (9) of Section 6.01 hereof occurs with respect to the Company, any
Restricted Subsidiary that is a Significant Subsidiary or any group of
Restricted Subsidiaries that, when taken together, would constitute a
Significant Subsidiary, all
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outstanding Notes shall be due and payable immediately without further action or
notice. The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest or premium that has become due solely
because of the acceleration) have been cured or waived.
If an Event of Default occurs on or after August 1, 2008 by reason of
any willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, then, upon acceleration of the Notes, an equivalent premium
shall also become and be immediately due and payable, to the extent permitted by
law, anything in this Indenture or in the Notes to the contrary notwithstanding.
If an Event of Default occurs prior to August 1, 2008 by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding the prohibition on redemption of the Notes prior
to August 1, 2008, then the premium specified in the paragraph above will also
become immediately due and payable, to the extent permitted by law, upon the
acceleration of the Notes.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue
any legally available remedy to collect the payment of principal, premium and
Special Interest, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may, on behalf of the Holders of all
of the Notes, waive an existing Default or Event of Default and its consequences
hereunder, except a continuing Default or Event of Default in the payment of the
principal of, or Special Interest, if any, or interest on, the Notes (including
in connection with an offer to purchase); provided, however, that the Holders of
a majority in aggregate principal amount of the then outstanding Notes may
rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration. Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon. This Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA
and such Section 316(a)(1)(B) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
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Section 6.05 Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes
may direct in writing the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee under this Indenture or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture that the
Trustee determines may be unduly prejudicial to the rights of other Holders of
Notes not taking part in such direction, and the Trustee shall have the right to
decline to follow any such direction, if the Trustee, being advised by counsel,
determines that such action so directed may not be lawfully taken or if the
Trustee, in good faith shall by a Responsible Officer, determine that the
proceedings so directed may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which is
not inconsistent with such direction. In the event the Trustee takes any action
or follows any direction pursuant to this Indenture, the Trustee shall be
entitled to indemnification reasonably satisfactory to it against any loss or
expense caused by taking such action or following such direction. This Section
6.05 shall be in lieu of Section 316(a)(1)(A) of the TIA, and such Section
316(a)(1)(A) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Section 6.06 Limitation on Suits.
Except to enforce the right to receive payment of principal, Special
Interest, if any, premium, if any, or interest when due, a Holder of a Note may
pursue a remedy with respect to this Indenture or the Notes only if:
(1) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(3) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee security or indemnity reasonably
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 and, if requested,
the provision of security or indemnity; and
(5) during such 60-day period the Holders of a majority
in aggregate principal amount of the then outstanding Notes do not give
the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and Special
Interest, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
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Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Special Interest, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
securities or property payable or deliverable on any such claims and any
custodian in any such judicial proceeding is hereby authorized by each Holder to
make such payments to the Trustee, and in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the Trustee
and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium and Special Interest, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Special Interest, if any, and interest, respectively; and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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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 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
will exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely
by the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee will examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) the Trustee will not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee will not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under
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this Indenture at the request of any Holders, unless such Holder has offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money or
assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document (whether in its
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
(other than in connection with the Exchange Offer contemplated by Section
2.06(f) hereof unless required by the TIA) an Officers' Certificate or an
Opinion of Counsel or both. The Trustee will not be liable for any action it
takes or omits to take in good faith in reliance on such Officers' Certificate
or Opinion of Counsel. The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel will be full and complete
authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
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 any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be
responsible for any statement or recital herein or any statement in
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the Notes or any other document in connection with the sale of the Notes or
pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee will mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, or Special
Interest, if any, or interest on, any Note, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA Section 313(b)(2). The Trustee will also transmit by mail
all reports as required by TIA Section 313(c).
(b) A copy of each report at the time of its mailing to the Holders of
Notes will be mailed by the Trustee to the Company and filed by the Trustee with
the SEC and each stock exchange on which the Notes are listed in accordance with
TIA Section 313(d). The Company will promptly notify the Trustee when the Notes
are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation will not be limited by any law on compensation of a
trustee of an express trust. The Company will reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it, in accordance with any provision of this Indenture, in addition to
the compensation for its services. Such expenses will include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee will notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company will not
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor will defend the claim and the Trustee will cooperate
in the defense. The Trustee may have separate counsel and the Company will pay
the reasonable fees and expenses of such counsel except to the extent any such
loss, liability or expense is judicially determined to have been caused by such
counsel's own negligence, willful misconduct or bad faith. Neither the Company
nor any Guarantor need pay for any settlement made without its consent, which
consent will not be unreasonably withheld.
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(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's payment obligations in this Section 7.07,
the Trustee will 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 and
interest on particular Notes. Such Lien will survive the satisfaction and
discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(8) or (9) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time and be discharged
from the trust hereby created 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 in writing. 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.
(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company will 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.
(d) 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.
(e) If the Trustee, after written request by any Holder who has been a
Holder for at least six months, fails to comply with Section 7.10 hereof, such
Holder may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this
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Indenture. The successor Trustee will mail a notice of its succession to
Holders. The retiring Trustee will promptly transfer all property held by it as
Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation without any further act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, and at any time, elect to have
either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Subsidiary Guarantees) on the date the
conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For
this purpose, Legal Defeasance means that the Company and the Guarantors will be
deemed to have paid and discharged the entire Indebtedness represented by the
outstanding Notes (including the Subsidiary Guarantees), which will thereafter
be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and
the other Sections of this Indenture
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referred to in clauses (1) and (2) below, and to have satisfied all of their
other obligations under such Notes, the Subsidiary Guarantees and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following provisions
which will survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest or premium and
Special Interest, if any, on such Notes when such payments are due from
the trust referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors' obligations
in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its
option under this Section 8.02 notwithstanding the prior exercise of its option
under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof
and clause (4) of Section 5.01 hereof with respect to the outstanding Notes on
and after the date the conditions set forth in Section 8.04 hereof are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes will thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes will not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Subsidiary
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby.
In addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(8)
hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
(1) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders, cash in United
States dollars, noncallable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized investment bank, appraisal firm or firm of
independent public accountants, to pay the
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principal of, and premium, Special Interest, if any, and interest on,
the outstanding Notes on the Stated Maturity or on the applicable
redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular
redemption date;
(2) in the case of an election under Section 8.02 hereof,
the Company has delivered to the Trustee an Opinion of Counsel (subject
to customary qualifications and exclusions) reasonably acceptable to
the Trustee confirming that:
(A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling; or
(B) since the date of this Indenture, there has been
a change in the applicable federal income tax law,
in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof,
the Company has delivered to the Trustee an Opinion of Counsel (subject
to customary qualifications and exclusions) reasonably acceptable to
the Trustee confirming that the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Covenant Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(4) no Default or Event of Default shall have occurred
and be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to
such deposit) and the deposit will not result in a breach or violation
of, or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
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Section 8.05 Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and noncallable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Special Interest, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or noncallable Government
Securities deposited pursuant to Section 8.04(1) hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee
will deliver or pay to the Company from time to time upon the request of the
Company any money or noncallable Government Securities held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(1) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money or noncallable Government Securities deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium or Special Interest, if any, or interest on
any Note and remaining unclaimed for two years after such principal, premium or
Special Interest, if any, or interest has become due and payable shall be paid
to the Company on its request or (if then held by the Company) will be
discharged from such trust; and the Holder of such Note will thereafter be
permitted to look only to the Company for payment thereof, and all liability of
the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, will thereupon cease; provided,
however, that the Trustee or such Paying Agent, before being required to make
any such repayment, may at the expense of the Company cause to be published
once, in the New York Times and The Wall Street Journal (national edition),
notice that such money remains unclaimed and that, after a date specified
therein, which will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or noncallable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantor's obligations under this
Indenture and the Notes and the Subsidiary Guarantees will be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.02 or 8.03 hereof, as the case may be;
provided, however, that, if the Company makes any payment of principal of,
premium or Special Interest,
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if any, or interest on any Note following the reinstatement of its obligations,
the Company will be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Notes or
the Subsidiary Guarantees without the consent of any Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company or such Guarantor pursuant to Article 5 or Article 11
hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Notes;
(5) to comply with requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(6) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the
date hereof;
(7) to allow any Guarantor to execute a supplemental
indenture and/or a Subsidiary Guarantee with respect to the Notes; or
(8) to conform the text of this Indenture or the Notes to
any provision of the "Description of Notes" section of the Company's
Offering Circular, dated July 23, 2003, related to the initial offering
of the Notes, to the extent that such provision in that "Description of
Notes" section was intended to be a verbatim recitation of a provision
of this Indenture, the Subsidiary Guarantees or the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
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Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the
Trustee may amend or supplement this Indenture (including, without limitation,
Sections 3.09, 4.10 and 4.15 hereof), the Subsidiary Guarantees and the Notes
with the consent of the Holders of at least a majority in principal amount of
the Notes (including, without limitation, Additional Notes, if any) then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the payment of
principal of, premium or Special Interest, if any, or interest on the Notes,
except a payment default resulting from an acceleration that has been rescinded)
or compliance with any provision of this Indenture, the Subsidiary Guarantees or
the Notes may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes voting as a single class
(including consents obtained in connection with a tender offer or exchange offer
for, or purchase of, Notes).
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture directly affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but will not be obligated to, enter into such
amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(1) reduce the principal amount of Notes the Holders of
which must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity
of any Note or alter or waive any of the provisions with respect to the
redemption of the Notes except as provided above with respect to
Sections 3.09, 4.10 and 4.15 hereof;
(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, or interest or premium or Special Interest, if any, on
the Notes (except a rescission of acceleration of the Notes
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by the Holders of at least a majority in aggregate principal amount of
the then outstanding Notes and a waiver of the payment default that
resulted from such acceleration);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of, or interest or premium or Special
Interest, if any, on the Notes;
(7) make any change in Section 6.04 or 6.07 hereof;
(8) make any change in the foregoing amendment and waiver
provisions; or
(9) release any Guarantor from any of its obligations
under its Subsidiary Guarantee or this Indenture, except in accordance
with the terms of this Indenture.
In addition, any amendment to, or waiver of, the provisions of this
Indenture relating to subordination that adversely affects the rights of the
Holders of the Notes will require the consent of the Holders of at least 75% in
aggregate principal amount of the Notes then outstanding.
Section 9.03 Compliance with TIA.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In executing any amended or supplemental indenture, the Trustee
will be entitled
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to receive and (subject to Section 7.01 hereof) will be fully protected in
relying upon, in addition to the documents required by Section 13.04 hereof, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental Indenture is authorized or permitted by this
Indenture.
ARTICLE 10.
SUBORDINATION
Section 10.01 Agreement to Subordinate.
The Company agrees, and each Holder by accepting a Note agrees, that
the Indebtedness evidenced by the Notes is subordinated in right of payment, to
the extent and in the manner provided in this Article 10, to the prior payment
in full in cash of all Senior Debt (whether outstanding on the date hereof or
hereafter created, incurred, assumed or guaranteed), and that the subordination
is for the benefit of the holders of Senior Debt.
Section 10.02 Liquidation; Dissolution; Bankruptcy.
Upon any distribution to creditors of the Company in a liquidation or
dissolution of the Company or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or its property, in
an assignment by the Company for the benefit of creditors or in any marshaling
of the Company's assets and liabilities:
(1) holders of Senior Debt will be entitled to receive
payment in full in cash of all Obligations due in respect of such
Senior Debt (including interest after the commencement of any
bankruptcy proceeding at the rate specified in the applicable Senior
Debt whether or not such interest constitutes an allowed claim in the
bankruptcy proceeding) before the Holders of Notes will be entitled to
receive any payment with respect to the Notes (except that Holders of
Notes may receive and retain Permitted Junior Securities and payments
made from either of the trusts described in Article 8 or Article 12
hereof); and
(2) until, in each case, all Obligations in respect of
Senior Debt (as provided in clause (1) above) are paid in full in cash,
any distribution to which Holders would be entitled but for this
Article 10 will be made to holders of Senior Debt (except that Holders
of Notes may receive and retain Permitted Junior Securities and
payments and other distributions made from either of the trusts
described in Article 8 or Article 12 hereof), as their interests may
appear.
Section 10.03 Default on Designated Senior Debt.
(a) The Company may not make any payment or distribution to the Trustee
or any Holder in respect of Obligations with respect to the Notes and may not
acquire from the Trustee or any Holder any Notes for cash or property (other
than Permitted Junior Securities and payments made from the trusts described in
Article 8 or Article 12 hereof) until all principal and other Obligations with
respect to the Senior Debt have been paid in full in cash if:
(1) payment default on Designated Senior Debt occurs and
is continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior Debt; or
(2) any other default occurs and is continuing on any
series of Designated Senior Debt that permits holders of that series of
Designated Senior Debt to accelerate its maturity and
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the Trustee receives a notice of such default (a "Payment Blockage
Notice") from the Company of the holders of any Designated Senior Debt.
If the Trustee receives any such Payment Blockage Notice, no subsequent
Payment Blockage Notice will be effective for purposes of this Section
10.03 unless and until (A) at least 360 days have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (B)
all scheduled payments of principal, premium and Special Interest, if
any, and interest on the Notes that have come due have been paid in
full in cash.
No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee may be, or may be made,
the basis for a subsequent Payment Blockage Notice unless such default has been
cured or waived for a period of not less than 180 days.
(b) The Company may and will resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) in the case of a payment default, upon the date upon
which such default is cured or waived, or
(2) in the case of a nonpayment default, upon the earlier
of the date on which such nonpayment default is cured or waived or 179
days after the date on which the applicable Payment Blockage Notice is
received, unless the maturity of any Designated Senior Debt has been
accelerated,
if this Article 10 otherwise permits the payment, distribution or acquisition at
the time of such payment or acquisition.
Section 10.04 Acceleration of Notes.
If payment of the Notes is accelerated because of an Event of Default,
the Company will promptly notify holders of Senior Debt of the acceleration.
Section 10.05 When Distribution Must Be Paid Over.
In the event that the Trustee or any Holder receives any payment of any
Obligations with respect to the Notes (other than Permitted Junior Securities
and payments made from either of the trusts described in Article 8 or Article 12
hereof) at a time when such payment is prohibited by Section 10.03 hereof, and
the Trustee or such Holder, as applicable, has actual knowledge that such
payment is prohibited by Section 10.03 hereof, such payment will be held by the
Trustee or such Holder, in trust for the benefit of, and will be paid forthwith
over and delivered, upon written request, to, the holders of Senior Debt as
their interests may appear or their Representative under the agreement,
indenture or other document (if any) pursuant to which Senior Debt may have been
issued, as their respective interests may appear, for application to the payment
of all Obligations with respect to Senior Debt remaining unpaid to the extent
necessary to pay such Obligations in full in accordance with their terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only those obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt will be read into this Indenture against
the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and will not be liable to any such holders if the
Trustee pays over or distributes to or on behalf of Holders or the Company or
any other Person money or assets to which any holders of Senior Debt are then
entitled
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by virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee.
Section 10.06 Notice by Company.
The Company will promptly notify the Trustee and the Paying Agent of
any facts known to the Company that would cause a payment of any Obligations
with respect to the Notes to violate this Article 10, but failure to give such
notice will not affect the subordination of the Notes to the Senior Debt as
provided in this Article 10.
Section 10.07 Subrogation.
After all Senior Debt is paid in full and until the Notes are paid in
full, Holders of Notes will be subrogated (equally and ratably with all other
Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt
to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Notes.
Section 10.08 Relative Rights.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture will:
(1) impair, as between the Company and Holders of Notes,
the obligation of the Company, which is absolute and unconditional, to
pay principal of, premium and interest and Special Interest, if any, on
the Notes in accordance with their terms;
(2) affect the relative rights of Holders of Notes and
creditors of the Company other than their rights in relation to holders
of Senior Debt; or
(3) prevent the Trustee or any Holder of Notes from
exercising its available remedies upon a Default or Event of Default,
subject to the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of,
premium or interest or Special Interest, if any, on a Note on the due date, the
failure is still a Default or Event of Default.
Section 10.09 Subordination May Not Be Impaired by Company.
No right of any holder of Senior Debt to enforce the subordination of
the Indebtedness evidenced by the Notes may be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Section 10.10 Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Notes will be entitled to
rely upon any order or decree made by any court of
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competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders of Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10.
Section 10.11 Rights of Trustee and Paying Agent.
Notwithstanding the provisions of this Article 10 or any other
provision of this Indenture, the Trustee will not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee has received at its Corporate
Trust Office at least five Business Days prior to the date of such payment
written notice of facts that would cause the payment of any Obligations with
respect to the Notes to violate this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10 will impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.12 Authorization to Effect Subordination.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes
and directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, the Representatives are hereby authorized to file an appropriate
claim for and on behalf of the Holders of the Notes.
Section 10.13 Amendments.
The provisions of this Article 10 may not be amended or modified
without the written consent of the holders of all Senior Debt.
In addition, any amendment to, or waiver of, the provisions of this
Article 10 that adversely affects the rights of the Holders of the Notes will
require the consent of the Holders of at least 75% in aggregate principal amount
of the Notes then outstanding.
ARTICLE 11.
SUBSIDIARY GUARANTEES
Section 11.01 Guarantee.
(a) Subject to this Article 11, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Holder of a Note authenticated
and delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes or
the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Special Interest, if
any, and interest on the Notes will be promptly paid in full when due,
whether at maturity, by acceleration, redemption or
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otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and all other obligations of the Company to
the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and
thereof; and
(2) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that same will
be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance
so guaranteed for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately. Each Guarantor agrees that this is a
guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated
in full force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such obligations as provided in Article 6 hereof, such
obligations (whether or not due and payable) will forthwith become due and
payable by the Guarantors for the purpose of this Subsidiary Guarantee. The
Guarantors will have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantee.
Section 11.02 Subordination of Subsidiary Guarantee.
The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to this Article 11 will be junior and subordinated to the Senior Debt
of such Guarantor on the same basis as the Notes are junior and subordinated to
Senior Debt of the Company. For the purposes of the foregoing sentence, the
Trustee and the Holders will have the right to receive and/or retain payments by
any of the Guarantors only at such times as they may receive and/or retain
payments in respect of the Notes pursuant to this Indenture, including Article
10 hereof.
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Section 11.03 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Subsidiary
Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance
for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the
extent applicable to any Subsidiary Guarantee. To effectuate the foregoing
intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree
that the obligations of such Guarantor will be limited to the maximum amount
that will, after giving effect to such maximum amount and all other contingent
and fixed liabilities of such Guarantor that are relevant under such laws, and
after giving effect to any collections from, rights to receive contribution from
or payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article 11, result in the
obligations of such Guarantor under its Subsidiary Guarantee not constituting a
fraudulent transfer or conveyance.
Section 11.04 Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 11.01 hereof,
each Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form attached as Exhibit E hereto will be endorsed by an
Officer of such Guarantor on each Note authenticated and delivered by the
Trustee and that this Indenture will be executed on behalf of such Guarantor by
one of its Officers.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 11.01 hereof will remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set
forth in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic
Subsidiary after the date of this Indenture, if required by Section 4.19 hereof,
the Company will cause such Domestic Subsidiary to comply with the provisions of
Section 4.19 hereof and this Article 11, to the extent applicable.
Section 11.05 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06 hereof, no Guarantor may
sell or otherwise dispose of all or substantially all of its assets to another
Person, other than the Company or another Guarantor, or consolidate with or
merge with or into another Person (whether or not such Guarantor is the
surviving Person), other than the Company or another Guarantor, unless:
(1) immediately after giving effect to that transaction,
no Default or Event of Default exists; and
(2) either:
(A) subject to Section 11.06 hereof, the Person
acquiring the property in any such sale or disposition or the
Person formed by or surviving any such consolidation or merger
unconditionally assumes all the obligations of that Guarantor
under this Indenture, its
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Subsidiary Guarantee and the Registration Rights Agreement on
the terms set forth herein and therein, pursuant to a
supplemental indenture in form and substance reasonably
satisfactory to the Trustee; and
(B) such sale or other disposition is otherwise in
accordance with the applicable provisions of this Indenture,
including without limitation, Sections 3.09 and 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and upon
the assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Guarantor, such successor Person will succeed to and be
substituted for the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may cause to be signed
any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Subsidiary Guarantees so issued will in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses 2(A) and (B) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 11.06 Releases Following Sale of Assets.
In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor (including by way of merger or consolidation)
or any sale or other disposition of all of the Capital Stock of any Guarantor,
in each case to a Person that is not (either before or after giving effect to
such transaction) the Company or another Guarantor, then such Guarantor (in the
event of a sale or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all or
substantially all of the assets of such Guarantor) will be released and relieved
of any obligations under its Subsidiary Guarantee; provided in each case that
the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Sections 3.09 and 4.10 hereof. Upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such sale or
other disposition was made by the Company in accordance with the provisions of
this Indenture, including without limitation Sections 3.09 and 4.10 hereof, the
Trustee will execute any documents reasonably required in order to evidence the
release of any such Guarantor or other Person from its obligations under its
Subsidiary Guarantee.
In the event the Company designates a Guarantor as an Unrestricted
Subsidiary in accordance with Section 4.20 hereof or upon Legal Defeasance or
satisfaction and discharge of the Notes as provided in Article 8 or Article 12
hereof, then, upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, such Guarantor will be released and relieved of any obligations under
its Subsidiary Guarantee.
Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 11.
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ARTICLE 12.
SATISFACTION AND DISCHARGE
Section 12.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(A) all Notes that have been authenticated, except
lost, stolen or destroyed Notes that have been replaced or
paid and Notes for whose payment money has theretofore been
deposited in trust and thereafter repaid to the Company, have
been delivered to the Trustee for cancellation; or
(B) all Notes that have not been delivered to the
Trustee for cancellation have become due and payable by reason
of the making of a notice of redemption or otherwise or will
become due and payable within one year and the Company or any
Guarantor has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, noncallable
Government Securities, or a combination thereof, in such
amounts as will be sufficient, without consideration of any
reinvestment of interest, to pay and discharge the entire
Indebtedness on the Notes not delivered to the Trustee for
cancellation for principal, premium and Special Interest, if
any, and accrued interest to the date of maturity or
redemption;
(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) and the deposit will not result in a breach or violation of,
or constitute a default under, any other instrument to which the
Company or any Guarantor is a party or by which the Company or any
Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward
the payment of the Notes at maturity or the redemption date, as the
case may be.
In addition, the Company must deliver an Officers' Certificate and an Opinion of
Counsel to the Trustee stating that all conditions precedent to satisfaction and
discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (B) of clause
(1) of this Section 12.01, the provisions of Section 12.02 and Section 8.06 will
survive. In addition, nothing in this Section 12.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
84
Section 12.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited
with the Trustee pursuant to Section 12.01 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 12.01 hereof by reason of any
legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and any Guarantor's obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.01 hereof; provided that if the Company has made any
payment of principal of, premium, if any, or interest on any Notes because of
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 13.
MISCELLANEOUS
Section 13.01 TIA Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any TIA
provision that may be so modified, such TIA provision shall be deemed to apply
to this Indenture as so modified. If any provision of this Indenture excludes
any TIA provision that may be so excluded, such TIA provision shall be excluded
from this Indenture.
The provisions of TIA Sections 310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 13.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
Payless ShoeSource, Inc.
0000 X.X. 0xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
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With a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx
If to the Trustee:
Xxxxx Fargo Bank Minnesota, National Association
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) will
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when answered back, if telexed; when receipt acknowledged,
if telecopied; and the next Business Day after timely delivery to the courier,
if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA Section 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it will
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will mail
a copy to the Trustee and each Agent at the same time.
Section 13.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA Section 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 Section 312(c).
Section 13.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture (other than in connection with an Exchange Offer
contemplated by Section 2.06(f) hereof unless required by the TIA), the Company
shall furnish to the Trustee:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 13.05 hereof) stating that, in the
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opinion of the signers, all conditions precedent and covenants, if any,
provided for in this Indenture relating to the proposed action have
been satisfied; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which must include the
statements set forth in Section 13.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
Section 13.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA Section 314(a)(4)) must comply with the provisions of TIA
Section 314(e) and must 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
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
Section 13.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 13.07 No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Subsidiary Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of Notes by
accepting a Note unconditionally waives and releases all such liability. This
unconditional waiver and release is part of the consideration for issuance of
the Notes. This waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the SEC that such waiver is
against public policy.
Section 13.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING
EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
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Section 13.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 13.10 Successors.
All agreements of the Company in this Indenture and the Notes will bind
its successors. All agreements of the Trustee in this Indenture will bind its
successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 11.05.
Section 13.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 13.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 13.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
INDENTURE
SIGNATURES
Dated as of July 28, 2003
PAYLESS SHOESOURCE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Chief Financial
Officer and Treasurer
PAYLESS SHOESOURCE, INC.
PAYLESS SHOESOURCE WORLDWIDE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Chief Financial
Officer and Treasurer
PAYLESS SHOESOURCE DISTRIBUTION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
PAYLESS SHOESOURCE MERCHANDISING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
SHOE SOURCING, INC.
EASTBOROUGH, INC.
DYELIGHTS, INC.
PSS DELAWARE COMPANY 2, INC.
PSS DELAWARE COMPANY 3, INC.
PSS DELAWARE COMPANY 4, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
INDENTURE
PAYLESS SHOESOURCE FINANCE, INC.
PAYLESS SHOESOURCE GOLD VALUE, INC.
PAYLESS PURCHASING SERVICES, INC.
PSS LABOR LEASING, INC.
PSS INVESTMENT I, INC.
PSS INVESTMENT III, INC.
PSS CANADA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
INDENTURE
SCHEDULE I
SCHEDULE OF GUARANTORS
The following schedule lists each Guarantor under the Indenture as of
the date of the Indenture:
Payless ShoeSource Finance, Inc.
Dyelights Inc.
PSS Delaware Company 2, Inc.
PSS Delaware Company 3, Inc.
PSS Delaware Company 4, Inc..
Payless ShoeSource, Inc.
Payless ShoeSource Gold Value, Inc.
Shoe Sourcing, Inc.
Payless Purchasing Services, Inc.
Eastborough, Inc.
Payless ShoeSource Worldwide, Inc.
PSS Labor Leasing, Inc.
PSS Investment I, Inc.
PSS Investment III, Inc.
Payless ShoeSource Distribution, Inc.
Payless ShoeSource Merchandising, Inc.
PSS Canada, Inc.
I-1
EXHIBIT A
[Face of Note]
CUSIP/CINS ____________
8.25% [Series A] [Series B] Senior Subordinated Notes due 2013
No. ___ $____________
PAYLESS SHOESOURCE, INC.
promises to pay to Cede & Co.
or registered assigns,
the principal sum of ___________________________________________________________
Dollars on August 1, 2013.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
Dated: _______________, _____
PAYLESS SHOESOURCE, INC.
By: ______________________________________________
Name:
Title:
This is one of the Notes referred
to in the within-mentioned Indenture:
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee
By: ______________________________
Authorized Signatory
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[Back of Note]
8.25% [Series A] [Series B] Senior Subordinated Notes due 2013
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
Capitalized terms used herein have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
(1) INTEREST. Payless ShoeSource, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal
amount of this Note at 8.25% per annum from July 28, 2003 until
maturity and shall pay the Special Interest, if any, payable pursuant
to Section 2(c) of the Registration Rights Agreement referred to below.
The Company will pay interest and Special Interest, if any,
semi-annually in arrears on February 1 and August 1 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day
(each, an "Interest Payment Date"). 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 the date of issuance; provided that if
there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be February 1,
2004. The Company will pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at the rate then in
effect; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of
interest and Special Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same rate
to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Special Interest, if any, to
the Persons who are registered Holders of Notes at the close of
business on the January 15 or July 15 immediately preceding the
Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium and
Special Interest, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City and
State of New York, or, at the option of the Company, payment of
interest and Special Interest, if any, may be made by check mailed to
the Holders at their addresses set forth in the register of Holders;
provided that payment by wire transfer of immediately available funds
will be required with respect to principal of and interest and premium,
if any, and Special Interest, if any, on, all Global Notes and all
other Notes the Holders of which will have provided wire transfer
instructions to the Company or the Paying Agent. Such payment will be
in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Xxxxx Fargo
Bank Minnesota, National Association, the Trustee under the Indenture,
will act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company or
any of its Subsidiaries may act in any such capacity.
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(4) INDENTURE. The Company issued the Notes under an
Indenture dated as of July 28, 2003 (the "Indenture") among the
Company, the Guarantors 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, as amended (15 U.S. Code
Sections 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the
express provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling. The Notes are unsecured obligations of
the Company. Under the terms of and as provided in the Indenture, if on
any date following the date of the Indenture (a) the Notes are rated
Baa3 or better by Moody's and BBB- or better by S&P (or, if either such
entity ceases to rate the Notes for reasons outside of the control of
the Company, the equivalent investment grade credit rating from any
other "nationally recognized statistical rating organization" within
the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected
by the Company as a replacement agency); and (b) no Default or Event of
Default shall have occurred and be continuing, then, beginning on that
day and continuing at all times thereafter regardless of any subsequent
changes in the rating of the Notes, certain covenants contained in the
Indenture, including without limitation the covenant described under
Section (7)(b) below, will no longer be applicable to the Notes.
(5) OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this
Paragraph 5, the Company will not have the option to redeem the Notes
prior to August 1, 2008. On or after August 1, 2008, the Company will
have the option to, on any one or more occasions, redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount)
set forth below, plus accrued and unpaid interest and Special Interest,
if any, to the applicable redemption date, if redeemed during the
twelve-month period beginning on August 1 of the years indicated below,
subject to the rights of Holders of such Notes on the relevant record
date to receive interest on the relevant interest payment date:
Year Percentage
---- ----------
2008............................................... 104.125
2009............................................... 102.750
2010............................................... 101.375
2011 and thereafter................................ 100.000
(b) Notwithstanding the provisions of subparagraph
(a) of this Paragraph 5, at any time prior to August 1, 2006, the
Company may, on any one or more occasions, redeem up to 35% of the
aggregate principal amount of Notes with the net proceeds of one or
more Equity Offerings at a redemption price equal to 108.25% of the
aggregate principal amount thereof, plus accrued and unpaid interest
and Special Interest, if any, to the redemption date; provided that at
least 65% in aggregate principal amount of the Notes originally issued
under the Indenture (excluding Notes held by the Company and its
Subsidiaries) remains outstanding immediately after the occurrence of
such redemption and that such redemption occurs within 90 days of the
date of the closing of such Equity Offering.
(6) MANDATORY REDEMPTION. The Company will not be
required to make mandatory redemption or sinking fund payments with
respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
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(a) If there is a Change of Control, the Company will
be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of each Holder's Notes in cash at a purchase price equal to
101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Special Interest thereon, if any, to the date of purchase
(the "Change of Control Payment"), subject to the rights of Holders on
the relevant record date to receive interest due on the relevant
interest payment date. Within 30 days following any Change of Control,
the Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the
Indenture.
(b) If the Company or a Subsidiary consummates any
Asset Sales, within five days of each date on which the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company will
commence an offer to all Holders of Notes and all holders of other
Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in the Indenture with respect to offers to
purchase or redeem with the proceeds of sales of assets (an "Asset Sale
Offer") pursuant to Section 3.09 of the Indenture to purchase the
maximum principal amount of Notes (including any Additional Notes) and
other pari passu Indebtedness that may be purchased out of the Excess
Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Special
Interest thereon, if any, to the date fixed for the closing of such
offer, in accordance with the procedures set forth in the Indenture. To
the extent that the aggregate amount of Notes (including any Additional
Notes) and other pari passu Indebtedness tendered pursuant to an Asset
Sale Offer is less than the Excess Proceeds, the Company (or such
Subsidiary) may use such deficiency for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes
and other pari passu Indebtedness tendered by holders thereof exceeds
the amount of Excess Proceeds, the Trustee will select the Notes and
the other pari passu Indebtedness to be purchased on a pro rata basis.
Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related
purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse
of the Notes.
(8) NOTICE OF REDEMPTION. Notice of redemption will be
mailed at least 30 days but not more than 60 days before the redemption
date to each Holder whose Notes are to be redeemed at its registered
address, except that redemption notices may be mailed more than 60 days
prior to a redemption date if the notice is issued in connection with a
defeasance of the Notes or a satisfaction and discharge of the
Indenture pursuant to Article 8 or Article 12 of the Indenture. Notes
in denominations larger than $1,000 may be redeemed in part but only in
whole multiples of $1,000, unless all of the Notes held by a Holder are
to be redeemed. On and after the redemption date interest ceases to
accrue on Notes or portions thereof called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may
require a Holder to pay any taxes and fees required by law or permitted
by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part.
Also, the Company need not exchange or register the transfer of any
Notes for a period of 15 days before a selection of Notes to be
redeemed or during the period between a record date and the
corresponding Interest Payment Date.
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(10) PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain
exceptions, the Indenture, the Subsidiary Guarantees or the Notes may
be amended or supplemented with the consent of the Holders of at least
a majority in principal amount of the then outstanding Notes and
Additional Notes, if any, voting as a single class, and any existing
default or compliance with any provision of the Indenture, the
Subsidiary Guarantees or the Notes may be waived with the consent of
the Holders of a majority in principal amount of the then outstanding
Notes and Additional Notes, if any, voting as a single class. Without
the consent of any Holder of a Note, the Indenture, the Subsidiary
Guarantees or the Notes may be amended or supplemented to (i) cure any
ambiguity, defect or inconsistency, (ii) provide for uncertificated
Notes in addition to or in place of certificated Notes, (iii) provide
for the assumption of the Company's or a Guarantor's obligations to
Holders of the Notes in case of a merger or consolidation, (iv) make
any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, (v) comply with the
requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act, (vi)
provide for the issuance of Additional Notes in accordance with the
limitations set forth in the Indenture, (vii) allow any Guarantor to
execute a supplemental indenture to the Indenture and/or a Subsidiary
Guarantee with respect to the Notes or (viii) conform the text of the
Indenture to the Notes to any provision of the "Description of Notes"
section of the Company's Offering Circular, dated July 23, 2003,
related to the initial offering of the Notes, to the extent that such
provision in that "Description of Notes" section was intended to be a
verbatim recitation of a provision of the Indenture, the Subsidiary
Guarantees or the Notes.
(12) DEFAULTS AND REMEDIES. Events of Default include: (i)
default for 30 days in the payment when due of interest on, or Special
Interest in respect of, the Notes (whether or not prohibited by the
subordination provisions of the Indenture); (ii) default in payment
when due of principal of or premium, if any, on the Notes when the same
becomes due and payable at maturity, upon redemption (including in
connection with an offer to purchase) or otherwise (whether or not
prohibited by the subordination provisions of the Indenture); (iii)
failure by the Company or any of its Restricted Subsidiaries to comply
with Sections 3.09, 4.10, 4.15 or 5.01 of the Indenture; (iv) failure
by the Company for 30 days after notice to the Company from the Trustee
to comply with any of its obligations under Sections 4.07 and 4.09 of
the Indenture; (v) failure by the Company for 60 days after notice to
the Company from the Trustee to comply with certain other agreements in
the Indenture or the Notes; (vi) default under certain other agreements
relating to Indebtedness of the Company which default results in the
acceleration of such Indebtedness prior to its express maturity; (vii)
certain final judgments not covered by insurance for the payment of
money that remain undischarged for a period of 60 days; (viii) certain
events of bankruptcy or insolvency with respect to the Company or any
of its Restricted Subsidiaries that is a Significant Subsidiary or any
group of Restricted Subsidiaries that, when taken together, would
constitute a Significant Subsidiary; and (ix) except as permitted by
the Indenture, any Subsidiary Guarantee by a Guarantor that is a
Significant Subsidiary or any group of Subsidiary Guarantees by a group
of Guarantors that, when taken together, would constitute a Significant
Subsidiary, shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Guarantor or any Person acting on its behalf
shall deny or disaffirm its obligations under such Guarantor's
Subsidiary Guarantee. If any 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 due and payable
immediately. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all
outstanding Notes will become due and payable
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without further action or notice. Holders may not enforce the Indenture
or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then
outstanding Notes may direct in writing the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of the Notes
notice of any continuing Default or Event of Default (except a Default
or Event of Default relating to the payment of principal, special
Interest or interest) if it determines that withholding notice is in
their interest. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of
the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under the Indenture except a continuing
Default or Event of Default in the payment of interest or Special
Interest on, or the principal of, the Notes. The Company is required to
deliver to the Trustee annually a statement regarding compliance with
the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement
specifying such Default or Event of Default.
(13) SUBORDINATION. Payment of principal, interest and
premium and Special Interest, if any, on the Notes is subordinated to
the prior payment of Senior Debt on the terms provided in the
Indenture.
(14) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not
the Trustee.
(15) NO RECOURSE AGAINST OTHERS. No past, present or
future director, officer, employee, incorporator or stockholder, of the
Company or any of the Guarantors, as such, will have any liability for
any obligations of the Company or such Guarantor under the Notes, the
Subsidiary Guarantees 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 unconditionally waives and releases all such
liability. This unconditional waiver and release are part of the
consideration for the issuance of the Notes. This waiver may not be
effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such waiver is against public policy.
(16) AUTHENTICATION. This Note will not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
(17) 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).
(18) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL
NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights
provided to Holders of Notes under the Indenture, Holders of Restricted
Global Notes and Restricted Definitive Notes will have all the rights
set forth in the Registration Rights Agreement dated as of July 28,
2003, among the Company, the Guarantors and the other parties named on
the signature pages thereof or, in the case of Additional Notes,
Holders of Restricted Global Notes and Restricted Definitive Notes will
have the rights set forth in one or more registration rights
agreements, if any, among the Company, the Guarantors and the other
parties thereto, relating to rights given by the Company and the
Guarantors to the purchasers of any Additional Notes (collectively, the
"Registration Rights Agreement").
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(19) CUSIP NUMBERS. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Company has caused CUSIP numbers to be printed on the
Notes and the Trustee may use CUSIP numbers in notices of redemption as
a convenience to Holders. No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Payless ShoeSource, Inc.
0000 X.X. 0xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Investor Relations
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ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:___________________________________
(Insert assignee's legal name)
________________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: __________________________________
(Sign exactly as your name appears
on the face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box
below:
[ ]Section 4.10 [ ]Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 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*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
Original Principal Amount of Global Security No. , dated [date of
Global Security] $
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:
Principal Amount
Amount of decrease Amount of increase in of this Global Note Signature of
in Principal Amount Principal Amount following such authorized officer
of of decrease of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Payless ShoeSource, Inc.
0000 X.X. 0xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Xxxxx Fargo Bank Minnesota, National Association
Attn: Corporate Trust Services
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Re: 8.25% Senior Subordinated Notes due 2013
Reference is hereby made to the Indenture, dated as of July 28, 2003
(the "Indenture"), among Payless ShoeSource, Inc., a Delaware corporation, as
issuer (the "Company"), the Guarantors named on the signature pages thereto and
Xxxxx Fargo Bank Minnesota, National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to ___________________________ (the "Transferee"), as further specified in Annex
A hereto. In connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believed and believes is purchasing the beneficial interest or Definitive Note
for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of
B-1
the Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or a
subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the
Securities Act;
or
(d) [ ] such Transfer is being effected to an Institutional
Accredited Investor and pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies
that it has not engaged in any general solicitation within the
meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form
of Exhibit D to the Indenture and (2) an Opinion of Counsel provided
by the Transferor or the Transferee (a copy of which the Transferor
has attached to this certification), to the effect that such Transfer
is in compliance with the Securities Act. Upon consummation of the
proposed transfer in accordance with the terms of the Indenture, the
transferred beneficial interest or Definitive Note will be subject to
the restrictions on transfer enumerated in the Private Placement
Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement
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Legend are not required in order to maintain compliance with the Securities Act.
Upon consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will no longer
be subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the Restricted Global Notes, on Restricted Definitive Notes
and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_______________________________________
[Insert Name of Transferor]
By:____________________________________
Name:
Title:
Dated: _______________________
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ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Payless ShoeSource, Inc.
0000 X.X. 0xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Xxxxx Fargo Bank Minnesota, National Association
Attn: Corporate Trust Services
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Re: 8.25% Senior Subordinated Notes due 2013
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of July 28, 2003
(the "Indenture"), among Payless ShoeSource, Inc., a Delaware corporation, as
issuer (the "Company"), the Guarantors named on the signature pages thereto and
Xxxxx Fargo Bank Minnesota, National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
__________________________, (the "Owner") owns and proposes to exchange
the Note[s] or interest in such Note[s] specified herein, in the principal
amount of $____________ in such Note[s] or interests (the "Exchange"). In
connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
C-1
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR
BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global
Note with an equal principal amount, the Owner hereby certifies (i) the
beneficial interest is being acquired for the Owner's own account without
transfer and (ii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
_______________________________________
[Insert Name of Transferor]
C-2
By:____________________________________
Name:
Title:
Dated: ______________________
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Payless ShoeSource, Inc.
0000 X.X. 0xx Xxxxxx
Xxxxxx, Xxxxxx 00000
Xxxxx Fargo Bank Minnesota, National Association
Attn: Corporate Trust Services
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Re: 8.25% Senior Subordinated Notes due 2013
Reference is hereby made to the Indenture, dated as of July 28, 2003
(the "Indenture"), among Payless ShoeSource, Inc., a Delaware corporation, as
issuer (the "Company"), the guarantors named on the signature pages thereto and
Xxxxx Fargo Bank Minnesota, National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not
been registered under the Securities Act, and that the Notes and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Notes or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) in accordance with Rule 144A under the Securities Act to a
"qualified institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company a signed letter substantially in the form of this letter and an Opinion
of Counsel in form reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act, (D) outside the United States
in accordance with Rule 904 of Regulation S under the Securities Act, (E)
pursuant to the provisions of Rule 144(k) under the Securities Act or (F)
pursuant to an effective registration statement under the Securities Act, and we
further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
_______________________________________
[Insert Name of Accredited Investor]
By:____________________________________
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
[FORM OF NOTATION OF GUARANTEE]
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth and subject to the provisions in the
Indenture dated as of July 28, 2003 (the "Indenture") among Payless ShoeSource,
Inc., a Delaware corporation (the "Company"), the Guarantors listed on Schedule
I thereto and Xxxxx Fargo Bank Minnesota, National Association, as trustee (the
"Trustee"), (a) the due and punctual payment of the principal of, premium and
Special Interest, if any, and interest on, the Notes (as defined in the
Indenture), whether at maturity, by acceleration, redemption or otherwise, the
due and punctual payment of interest on overdue principal of and interest on the
Notes, if any, if lawful, and the due and punctual performance of all other
obligations of the Company to the Holders or the Trustee all in accordance with
the terms of the Indenture and (b) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.
PAYLESS SHOESOURCE, INC.
PAYLESS SHOESOURCE WORLDWIDE, INC.
By:_______________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Chief Financial
Officer and Treasurer
PAYLESS SHOESOURCE DISTRIBUTION, INC.
By:_______________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
PAYLESS SHOESOURCE MERCHANDISING, INC.
By:_______________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Treasurer
E-1
EXHIBIT E
SHOE SOURCING, INC.
EASTBOROUGH, INC.
DYELIGHTS, INC.
PSS DELAWARE COMPANY 2, INC.
PSS DELAWARE COMPANY 3, INC.
PSS DELAWARE COMPANY 4, INC.
By:_______________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
PAYLESS SHOESOURCE FINANCE, INC.
PAYLESS SHOESOURCE GOLD VALUE, INC.
PAYLESS PURCHASING SERVICES, INC.
PSS LABOR LEASING, INC.
PSS INVESTMENT I, INC.
PSS INVESTMENT III, INC.
PSS CANADA, INC.
By:_______________________________________________
Name: Xxxxxxx X. Xxxxxx
Title: President
E-2
EXHIBIT F
[FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS]
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of Payless ShoeSource, Inc., a Delaware corporation
(or its permitted successor) (the "Company"), the Company, the other Guarantors
(as defined in the Indenture referred to herein) and Xxxxx Fargo Bank Minnesota,
National Association, as trustee under the indenture referred to below (the
"Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of July 28, 2003 providing for
the issuance of an aggregate principal amount of up to $200,000,000 of 8.25%
Senior Subordinated Notes due 2013 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Subsidiary Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby
agrees as follows:
(a) Along with all Guarantors named in the
Indenture, to jointly and severally unconditionally Guarantee
to each Holder of a Note authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns, the
Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of, and premium and Special
Interest, if any, and interest on the Notes will be promptly
paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal
of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or
performed, all in accordance with the terms hereof and
thereof; and
(ii) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, that
same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise. Failing
payment when due of any amount so
F-1
guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.
(b) The obligations hereunder shall be
unconditional, irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the absence of
any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which
might otherwise constitute a legal or equitable discharge or
defense of a Guarantor.
(c) The following is hereby waived: diligence,
presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(d) This Subsidiary Guarantee shall not be
discharged except by complete performance of the obligations
contained in the Notes and the Indenture, and the Guaranteeing
Subsidiary accepts all obligations of a Guarantor under the
Indenture.
(e) If any Holder or the Trustee is required by
any court or otherwise to return to the Company, the
Guarantors, or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or
such Holder, this Subsidiary Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and
effect.
(f) The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until
payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the
purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby,
and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture,
such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the
purpose of this Subsidiary Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the
Holders under the Subsidiary Guarantee.
(i) Pursuant to Section 11.02 of the Indenture,
after giving effect to any maximum amount and all other
contingent and fixed liabilities that are relevant under any
applicable Bankruptcy or fraudulent conveyance laws, and after
giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other
Guarantor under Article 11 of the Indenture, this new
Subsidiary Guarantee shall be limited to the maximum amount
permissible such that the obligations of such Guarantor under
this Subsidiary Guarantee will not constitute a fraudulent
transfer or conveyance.
F-2
(j) The obligations of each Guaranteeing
Subsidiary under its Subsidiary Guarantee will be junior and
subordinated to the Senior Debt of such Guaranteeing
Subsidiary on the same basis as the Notes are junior and
subordinated to Senior Debt of the Company. For the purposes
of the foregoing sentence, the Trustee and the Holders will
have the right to receive and/or retain payments by any
Guaranteeing Subsidiary only at such times as they may receive
and/or retain payments in respect of the Notes pursuant to the
Indenture, including Article 10 thereof.
3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees
that the Subsidiary Guarantees shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.
4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN
TERMS.
(a) The Guaranteeing Subsidiary may not sell or
otherwise dispose of all or substantially all of its assets to
another Person, other than the Company or another Guarantor,
or consolidate with or merge with or into another Person
(whether or not such Guarantor is the surviving Person), other
than the Company or another Guarantor, unless:
(i) immediately after giving effect to that
transaction, no Default or Event of Default exists; and
(ii) either (A) subject to Sections 11.06 of the
Indenture, the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving any such
consolidation or merger unconditionally assumes all the
obligations of that Guarantor, pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the
Trustee, under the Indenture, its Subsidiary Guarantee and the
Registration Rights Agreement on the terms set forth herein or
therein; or (B) such sale or other disposition is otherwise in
accordance with the applicable provisions of the Indenture,
including without limitation, Sections 3.09 and 4.10 thereof.
(b) In case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the
Subsidiary Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions of
the Indenture to be performed by the Guarantor, such successor
Person shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named therein as a
Guarantor. Such successor Person thereupon may cause to be
signed any or all of the Subsidiary Guarantees to be endorsed
upon all of the Notes issuable under the Indenture which
theretofore shall not have been signed by the Company and
delivered to the Trustee. All the Subsidiary Guarantees so
issued will in all respects have the same legal rank and
benefit under the Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms
of the Indenture as though all of such Subsidiary Guarantees
had been issued at the date of the execution thereof.
(c) Except as set forth in Articles 4 and 5 and
Section 11.05 of Article 11 of the Indenture, and
notwithstanding clauses (a)(ii)(A) and (B) above, nothing
contained in the Indenture or in any of the Notes will prevent
any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or
F-3
conveyance of the property of a Guarantor as an entirety or
substantially as an entirety to the Company or another
Guarantor.
5. RELEASES.
(a) In the event of any sale or other
disposition of all or substantially all of the assets of any
Guarantor (including by way of merger or consolidation) or any
sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before
or after giving effect to such transaction) the Company or
another Guarantor, then such Guarantor (in the event of a sale
or other disposition, by way of merger, consolidation or
otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale
or other disposition of all or substantially all of the assets
of such Guarantor) will be released and relieved of any
obligations under its Subsidiary Guarantee; provided in each
case that the Net Proceeds of such sale or other disposition
are applied in accordance with the applicable provisions of
the Indenture, including without limitation Sections 3.09 and
4.10 of the Indenture. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel
to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of the
Indenture, including without limitation Sections 3.09 and 4.10
of the Indenture, the Trustee shall execute any documents
reasonably required in order to evidence the release of any
such Guarantor or other Person from its obligations under its
Subsidiary Guarantee.
(b) In the event the Company designates a
Guarantor as an Unrestricted Subsidiary in accordance with
Section 4.02 of the Indenture or upon Legal Defeasance or
satisfaction and discharge of the Notes as provided in Article
8 or Article 12 of the Indenture, then, upon delivery by the
Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the
provisions of the Indenture, such Guarantor will be released
and relieved of any obligations under its Subsidiary
Guarantee.
(c) Any Guarantor not released from its
obligations under its Subsidiary Guarantee will remain liable
for the full amount of principal of and interest on the Notes
and for the other obligations of any Guarantor under the
Indenture as provided in Article 11 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, stockholder or agent of the
Guaranteeing Subsidiary, as such, shall have any liability for any obligations
of the Company or the Guarantors under the Notes, any Subsidiary Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note unconditionally waives and releases all such
liability. This unconditional waiver and release is part of the consideration
for issuance of the Notes. Such waiver may not be effective to waive liabilities
under the federal securities laws and it is the view of the SEC that such waiver
is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW
YORK WILL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
F-4
8. COUNTERPARTS. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of this
Supplemental Indenture or for or in respect of the recitals contained herein,
all of which recitals are made solely by the Guaranteeing Subsidiary and the
Company.
F-5
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
PAYLESS SHOESOURCE, INC.
By: _______________________________
Name:
Title:
PAYLESS SHOESOURCE FINANCE, INC.
DYELIGHTS INC.
PSS DELAWARE COMPANY 2, INC.
PSS DELAWARE COMPANY 3, INC.
PSS DELAWARE COMPANY 4, INC.
PAYLESS SHOESOURCE, INC.
PAYLESS SHOESOURCE GOLD VALUE, INC.
SHOE SOURCING, INC.
PAYLESS PURCHASING SERVICES, INC.
EASTBOROUGH, INC.
PAYLESS SHOESOURCE WORLDWIDE, INC.
PSS LABOR LEASING, INC.
PSS INVESTMENT I, INC.
PSS INVESTMENT III, INC.
PAYLESS SHOESOURCE DISTRIBUTION, INC.
PAYLESS SHOESOURCE MERCHANDISING, INC.
PSS CANADA, INC.
By: _______________________________
Name:
Title:
XXXXX FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By: _______________________________
Authorized Signatory
F-6
