Exhibit 21
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CBRE Holding, Inc.
Issuer
16% Senior Notes Due July 20, 2011
___________________
INDENTURE
Dated as of July 20, 2001
___________________
State Street Bank and Trust Company
of California, N.A.
Trustee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
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310(a)(1)......................................................................................... 7.10
(a)(2)......................................................................................... 7.10
(a)(3)......................................................................................... N.A.
(a)(4)......................................................................................... N.A.
(b)............................................................................................ 7.08; 7.10
(c)............................................................................................ N.A.
311(a)............................................................................................ 7.11
(b)............................................................................................ 7.11
(c)............................................................................................ N.A.
312(a)............................................................................................ 2.05
(b)............................................................................................ 10.03
(c)............................................................................................ 10.03
313(a)............................................................................................ 7.06
(b)(1)......................................................................................... N.A.
(b)(2)......................................................................................... 7.06
(c)............................................................................................ 11.02
(d)............................................................................................ 7.06
314(a)............................................................................................ 4.02; 10.02
(b)............................................................................................ N.A.
(c)(1)......................................................................................... 10.04
(c)(2)......................................................................................... 10.04
(c)(3)......................................................................................... N.A.
(d)............................................................................................ N.A.
(e)............................................................................................ 10.05
(f)............................................................................................ N.A.
315(a)............................................................................................ 7.01
(b)............................................................................................ 7.05; 10.02
(c)............................................................................................ 7.01
(d)............................................................................................ 7.01
(e)............................................................................................ 6.11
316(a)(last sentence)............................................................................. 10.06
(a)(1)(A)...................................................................................... 6.05
(a)(1)(B)...................................................................................... 6.04
(a)(2)......................................................................................... N.A.
(b)............................................................................................ 6.07
317(a)(1)......................................................................................... 6.08
(a)(2)......................................................................................... 6.09
(b)............................................................................................ 2.04
318(a)............................................................................................ 10.01
N.A. means Not Applicable
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.................................................................... 1
SECTION 1.02. Other Definitions.............................................................. 29
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.............................. 29
SECTION 1.04. Rules of Construction.......................................................... 30
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating................................................................ 30
SECTION 2.02. Execution and Authentication................................................... 30
SECTION 2.03. Registrar and Paying Agent..................................................... 31
SECTION 2.04. Paying Agent To Hold Money in Trust............................................ 31
SECTION 2.05. Securityholder Lists........................................................... 31
SECTION 2.06. Transfer and Exchange.......................................................... 32
SECTION 2.07. Replacement Securities......................................................... 32
SECTION 2.08. Outstanding Securities......................................................... 32
SECTION 2.09. Temporary Securities........................................................... 33
SECTION 2.10. Cancellation................................................................... 33
SECTION 2.11. Defaulted Interest............................................................. 33
SECTION 2.12. CUSIP Numbers.................................................................. 33
SECTION 2.13. Issuance of Additional Securities.............................................. 33
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee............................................................. 34
SECTION 3.02. Selection of Securities To Be Redeemed......................................... 35
SECTION 3.03. Notice of Redemption........................................................... 35
SECTION 3.04. Effect of Notice of Redemption................................................. 36
SECTION 3.05. Deposit of Redemption Price.................................................... 36
SECTION 3.06. Securities Redeemed in Part.................................................... 36
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Page
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ARTICLE 4
Covenants
SECTION 4.01. Payment of Securities............................................................. 37
SECTION 4.02. SEC Reports....................................................................... 37
SECTION 4.03. Limitation on Indebtedness........................................................ 37
SECTION 4.04. Limitation on Restricted Payments................................................. 41
SECTION 4.05. Limitation on Restrictions on Distributions from Restricted Subsidiaries.......... 44
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock................................ 45
SECTION 4.07. Limitation on Affiliate Transactions.............................................. 48
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of Restricted Subsidiaries.... 49
SECTION 4.09. Change of Control................................................................. 49
SECTION 4.10. Limitation on Liens............................................................... 51
SECTION 4.11. Conduct of Business............................................................... 52
SECTION 4.12. Compliance Certificate............................................................ 52
SECTION 4.13. Payment of Additional Interest.................................................... 52
SECTION 4.14. Further Instruments and Acts...................................................... 52
ARTICLE 5
Merger and Consolidation
SECTION 5.01. When Company May Merge or Transfer Assets......................................... 52
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default................................................................. 53
SECTION 6.02. Acceleration...................................................................... 55
SECTION 6.03. Other Remedies.................................................................... 56
SECTION 6.04. Waiver of Past Defaults........................................................... 56
SECTION 6.05. Control by Majority............................................................... 56
SECTION 6.06. Limitation on Suits............................................................... 56
SECTION 6.07. Rights of Holders to Receive Payment.............................................. 57
SECTION 6.08. Collection Suit by Trustee........................................................ 57
SECTION 6.09. Trustee May File Proofs of Claim.................................................. 57
SECTION 6.10. Priorities........................................................................ 57
SECTION 6.11. Undertaking for Costs............................................................. 58
SECTION 6.12. Waiver of Stay or Extension Laws.................................................. 58
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Page
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ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee............................................................ 58
SECTION 7.02. Rights of Trustee............................................................ 59
SECTION 7.03. Individual Rights of Trustee................................................. 60
SECTION 7.04. Trustee's Disclaimer......................................................... 60
SECTION 7.05. Notice of Defaults........................................................... 60
SECTION 7.06. Reports by Trustee to Holders................................................ 60
SECTION 7.07. Compensation and Indemnity................................................... 61
SECTION 7.08. Replacement of Trustee....................................................... 61
SECTION 7.09. Successor Trustee by Merger.................................................. 62
SECTION 7.10. Eligibility; Disqualification................................................ 62
SECTION 7.11. Preferential Collection of Claims Against Company............................ 63
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance............................. 63
SECTION 8.02. Conditions to Defeasance..................................................... 64
SECTION 8.03. Application of Trust Money................................................... 65
SECTION 8.04. Repayment to Company......................................................... 65
SECTION 8.05. Indemnity for Government Obligations......................................... 65
SECTION 8.06. Reinstatement................................................................ 65
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders................................................... 66
SECTION 9.02. With Consent of Holders...................................................... 66
SECTION 9.03. Compliance with Trust Indenture Act.......................................... 67
SECTION 9.04. Revocation and Effect of Consents and Waivers................................ 67
SECTION 9.05. Notation on or Exchange of Securities........................................ 68
SECTION 9.06. Trustee To Sign Amendments................................................... 68
SECTION 9.07. Payment for Consent.......................................................... 68
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Page
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ARTICLE 10
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls.................................................. 68
SECTION 10.02. Notices....................................................................... 68
SECTION 10.03. Communication by Holders with Other Holders................................... 69
SECTION 10.04. Certificate and Opinion as to Conditions Precedent............................ 69
SECTION 10.05. Statements Required in Certificate or Opinion................................. 70
SECTION 10.06. When Securities Disregarded................................................... 70
SECTION 10.07 Rules by Trustee, Paying Agent and Registrar.................................. 70
SECTION 10.08 Legal Holidays................................................................ 70
SECTION 10.09 Governing Law................................................................. 70
SECTION 10.10. No Recourse Against Others.................................................... 71
SECTION 10.11. Successors.................................................................... 71
SECTION 10.12. Multiple Originals............................................................ 71
SECTION 10.13. Table of Contents; Headings................................................... 71
Rule 144A/IAI Appendix
Exhibit 1 -- Form of Initial Security
Exhibit A -- Form of Exchange Security or Private Exchange Security
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INDENTURE dated as of July 20, 2001, between CBRE Holding, Inc., a
Delaware corporation (the "Company") and STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A. (the "Trustee").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
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SECTION 1.01. Definitions.
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"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (a) existing at the time such Person becomes a Restricted
Subsidiary of the Company or at the time it merges or consolidates with the
Company or any of its Restricted Subsidiaries or (b) assumed in connection with
the acquisition of assets from such Person and, in each case, not incurred by
such Person in connection with, or in anticipation or contemplation of, such
Person becoming a Restricted Subsidiary of the Company or such acquisition,
merger or consolidation.
"Additional Assets" means (1) any property or other assets (other than
Indebtedness and Capital Stock) used in a Related Business; (2) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted
Subsidiary; or (3) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary; provided, however, that any such
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Restricted Subsidiary described in clause (2) or (3) above is primarily engaged
in a Related Business.
"Additional Securities" means 16% Senior Notes Due July 20, 2011
issued from time to time after the Issue Date in accordance with the terms of
this Indenture (including 16% Senior Notes Due July 20, 2011 issued as PIK
Interest) (other than pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this
Indenture and other than Exchange Securities or Private Exchange Securities
issued pursuant to an exchange offer for other Securities outstanding under this
Indenture).
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner of
Capital Stock representing 10% or more of the total voting power of the Voting
Stock (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Capital Stock (whether or not currently exercisable) and any
Person who would be an Affiliate of any such beneficial owner pursuant to the
first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of
(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary),
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary
(other than, in the case of (1), (2) and (3) above, (A) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (B) for purposes of Section 4.06 only, a
disposition that constitutes a Restricted Payment permitted by Section 4.04 or a
Permitted Investment, (C) the sale by Melody of assets purchased and/or funded
pursuant to the Melody Mortgage Warehousing Facility or the Melody Loan
Arbitrage Facility, (D) any sale of Capital Stock in, or Indebtedness or other
securities of, an Unrestricted Subsidiary, (E) a disposition of Temporary Cash
Investments in the ordinary course of business, (F) the disposition of property
or assets that are obsolete, damaged or worn out, (G) the lease or sublease of
office space in the ordinary course of business, (H) sales by Melody of debt
servicing rights not in excess of $5.0 million in the aggregate and (I) a
disposition of assets with a fair market value of less than $750,000 (a "de
minimis disposition"), so long as the sum of such de minimis disposition plus
all other de minimis dispositions previously made in the same calendar year does
not exceed $3.0 million in the aggregate);
provided, however, that a disposition of all or substantially all the assets of
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the Company and its Restricted Subsidiaries taken as a whole will be governed by
Section 4.09 and/or Section 5.01 and not by Section 4.06.
"Attributable Debt" in respect of a Sale/Leaseback Transaction means,
as at the time of determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the total obligations of
the lessee for rental payments during the remaining term of the lease included
in such Sale/Leaseback Transaction (including any period for which such lease
has been extended); provided, however, that if such Sale/Leaseback Transaction
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results in a Capital Lease Obligation, the amount of Indebtedness represented
thereby will be determined in accordance with the definition of "Capital Lease
Obligation".
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"Average Life" means, as of the date of determination, with respect to
any Indebtedness the quotient obtained by dividing (1) the sum of the products
of the number of years from the date of determination to the dates of each
successive scheduled principal payment of or redemption or similar payment with
respect to such Indebtedness multiplied by the amount of such payment by (2) the
sum of all such payments.
"Bank Indebtedness" means all Obligations pursuant to the Credit
Agreement.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day other than a Saturday, Sunday or a day
on which commercial banking institutions are authorized or required by law to
close in New York City.
"Capital Lease Obligation" means an obligation that is required to be
classified and accounted for as a capital lease for financial reporting purposes
in accordance with GAAP, and the amount of Indebtedness represented by such
obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Cash Equity Contributions" shall mean (a) the contribution to the
Company of not less than $98,800,000 in cash in the form of equity (it being
understood that (i) any contribution to the Company by RCBA of shares of common
equity of XX Xxxxxxx in excess of 2,345,900 shares will be considered a cash
contribution by RCBA in an amount equal to $16.00 multiplied by the number of
shares constituting such excess and a contribution of such amount from the
Company to XX Xxxxxxx and (ii) the transfer by designated managers of an
aggregate of up to $2.6 million of deferred compensation plan account balances
(currently reflected as cash surrender value of insurance policies, deferred
compensation plan in the financial statements of XX Xxxxxxx) to stock fund units
shall be deemed to be a cash contribution to the Company of the amount of such
transfer and a contribution of such amount from the Company to XX Xxxxxxx to the
extent (x) accounted for as equity of the Company and (y) such transfer of an
account balance results in a transfer to XX Xxxxxxx of cash from the trust
relating to such deferred compensation plan) and (b) the contribution by the
Company of the amount so received, together with the net proceeds from its sale
of the Notes, to XX Xxxxxxx as equity in exchange for Capital Stock (other than
Disqualified Stock) of XX Xxxxxxx.
"Cash Interest" means cash interest payable on the Securities.
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"XX Xxxxxxx" means CB Xxxxxxx Xxxxx Services, Inc., a Delaware
corporation.
"Change of Control" means the occurrence of any of the following
events:
(1) prior to the first underwritten public offering of common stock
of the Company or, in the case of clause (ii) below only, such earlier time
as DLJ Investment Funding, Inc. and its Affiliates cease to own of record
and beneficially, directly or indirectly, at least 50% of the principal
amount of Notes owned by DLJ Investment Funding, Inc. and its Affiliates on
the Closing Date, (i) the Permitted Holders cease to (A) be the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of at least 35% in the aggregate of the total
voting power of the Voting Stock of the Company, whether as a result of
issuance of securities of the Company, any merger, consolidation,
liquidation or dissolution of the Company, or any direct or indirect
transfer of securities by the Company or otherwise or (B) majority of the
Board of Directors or (ii) RCBA ceases to own of record and beneficially,
directly or indirectly, a number of shares of common stock of the Company
equal to at least 50% of the total number of shares of common stock of the
Company owned of record by RCBA as of the Closing Date, adjusted for stock
splits and stock dividends (for purposes of this clause (1) and clause (2)
below, the Permitted Holders shall be deemed to beneficially own any Voting
Stock of a Person (the "specified person") held by any other Person (the
"parent entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of such parent entity);
(2) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in clause (1) above, except that for
purposes of this clause (2) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage of
time, and except that any Person that is deemed to have beneficial
ownership of shares solely as the result of being part of a group pursuant
to Rule 13d-5(b)(1) shall be deemed not to have beneficial ownership of any
shares held by a Permitted Holder forming a part of such group), directly
or indirectly, of more than 35% of the total voting power of the Voting
Stock of the Company; provided, however, that the Permitted Holders
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beneficially own (as defined in clause (1) above, except that in the event
the Permitted Holders are part of a group pursuant to Rule 13d-5(b)(1), the
Permitted Holders shall be deemed not to have beneficial ownership of any
shares held by persons other than Permitted Holders forming a part of such
group), directly or indirectly, in the aggregate a lesser percentage of the
total voting power of the Voting Stock of the Company than such other
person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors (for the purposes of this clause (2), such other person shall be
deemed to beneficially own any Voting Stock of a specified person held by a
parent entity, if such other person is the beneficial owner (as defined in
this clause (2)), directly or indirectly, of more than 35% of the voting
power of the Voting Stock of such
-4-
parent entity and the Permitted Holders beneficially own (as defined in
clause (1) above), directly or indirectly, in the aggregate a lesser
percentage of the voting power of the Voting Stock of such parent entity
and do not have the right or ability by voting power, contract or otherwise
to elect or designate for election a majority of the board of directors of
such parent entity);
(3) individuals who on the Issue Date constituted the Board of
Directors (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors on the Issue Date or
whose election or nomination for election was previously so approved) cease
for any reason to constitute a majority of the Board of Directors then in
office;
(4) the adoption of a plan relating to the liquidation or dissolution
of the Company or XX Xxxxxxx;
(5) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company (determined on a
consolidated basis) to another Person (other than, in all such cases, a
Person that is controlled by the Permitted Holders), other than a
transaction following which (A) in the case of a merger or consolidation
transaction, holders of securities that represented 100% of the Voting
Stock of the Company immediately prior to such transaction (or other
securities into which such securities are converted as part of such merger
or consolidation transaction) own directly or indirectly at least a
majority of the voting power of the Voting Stock of the surviving Person in
such merger or consolidation transaction immediately after such transaction
and in substantially the same proportion as before the transaction and (B)
in the case of a sale of assets transaction, the transferee Person becomes
the obligor in respect of the Notes and a Subsidiary of the transferor of
such assets; or
(6) the Company ceases to be the beneficial owner, directly, of 100%
of the outstanding Capital Stock of XX Xxxxxxx other than shares of Capital
Stock of XX Xxxxxxx issuable upon exercise of employee stock options
outstanding on the Issue Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
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"Consolidated Coverage Ratio" as of any date of determination means
the ratio of
(x) the aggregate amount of EBITDA for the period of the most recent
four consecutive fiscal quarters for which internal financial statements
are available ending prior to the date of such determination to
(y) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that
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(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or
if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving effect on a pro forma basis to such Indebtedness as if such
Indebtedness had been Incurred on the first day of such period,
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such period or if any Indebtedness is to be repaid,
repurchased, defeased or otherwise discharged (in each case other than
Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been replaced) on the
date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for
such period shall be calculated on a pro forma basis as if such discharge
had occurred on the first day of such period and as if the Company or such
Restricted Subsidiary has not earned the interest income actually earned
during such period in respect of cash or Temporary Cash Investments used to
repay, repurchase, defease or otherwise discharge such Indebtedness,
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, EBITDA for
such period shall be reduced by an amount equal to EBITDA (if positive)
directly attributable to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal to EBITDA (if
negative), directly attributable thereto for such period and Consolidated
Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and
its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale),
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(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction requiring
a calculation to be made hereunder, which constitutes all or substantially
all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition, any Investment or acquisition of
assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto as if such Asset
Disposition, Investment or acquisition occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations shall be determined
in good faith by a responsible financial or accounting Officer of the Company
(and shall include any applicable Pro Forma Cost Savings). If any Indebtedness
bears a floating rate of interest and is being given pro forma effect, the
interest on such Indebtedness shall be calculated as if the rate in effect on
the date of determination had been the applicable rate for the entire period
(taking into account any Interest Rate Agreement applicable to such Indebtedness
if such Interest Rate Agreement has a remaining term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication,
(1) interest expense attributable to Capital Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction,
(2) amortization of debt discount and debt issuance cost,
(3) capitalized interest,
(4) non-cash interest expense,
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(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing,
(6) net payments pursuant to Hedging Obligations in respect of
Indebtedness,
(7) Preferred Stock dividends in respect of all Preferred Stock held
by Persons other than the Company or a Restricted Subsidiary (other than
dividends payable solely in Capital Stock (other than Disqualified Stock)
of the issuer of such Preferred Stock),
(8) interest incurred in connection with Investments in discontinued
operations,
(9) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of) the
Company or any Restricted Subsidiary and
(10) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust,
and less, to the extent included in such total interest expense, (A) the
amortization during such period of capitalized financing costs associated with
the Transactions, (B) the amortization during such period of other capitalized
financing costs; provided, however, that the aggregate amount of amortization
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relating to any such other capitalized financing costs deducted in calculating
Consolidated Interest Expense shall not exceed 3.5% of the aggregate amount of
the financing giving rise to such capitalized financing costs and (C) interest
expense relating to the Notes.
"Consolidated Net Income" means, for any period, the sum of (1) the
net income of the Company and its consolidated Subsidiaries and (2) to the
extent deducted in calculating net income of the Company and its consolidated
Subsidiaries, (A) any non-recurring fees, expenses or charges related to the
Transactions, (B) any non-recurring charges related to one-time severance or
lease termination costs incurred in connection with the Transactions and (C) for
all purposes other than the making of a Restricted Payment by the Company (other
than an Investment), interest expense relating to the Notes; provided, however,
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that there shall not be included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Person for such period
shall be included in such Consolidated Net Income up to the aggregate
amount of
-8-
cash actually distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution paid to a
Restricted Subsidiary, to the limitations contained in clause (3)
below) and
(B) the Company's equity in a net loss of any such Person to the
extent accounted for pursuant to the equity method of accounting for
such period shall be included in determining such Consolidated Net
Income;
(2) any net income (or loss) of any Person acquired by the Company or
a Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(3) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the
payment of dividends or the making of distributions by such Restricted
Subsidiary, directly or indirectly, to the Company other than, for all
purposes except the making of a Restricted Payment (other than an
Investment) by the Company, restrictions imposed by the terms of the Credit
Agreement and the Senior Subordinated Notes, in each case, as in effect on
the Issue Date or pursuant to Refinancing Indebtedness Incurred to
refinance the Credit Agreement or Senior Subordinated Notes; provided,
--------
however, that that the encumbrances and restrictions with respect to such
-------
Restricted Subsidiary contained in any such refinancing agreement or
amendment are no less favorable to the noteholders than encumbrances and
restrictions with respect to the payment of dividends or the making of
distributions to the Company contained in such predecessor agreements; and
except that:
(A) subject to the exclusion contained in clause (4) below, the
Company's equity in the net income of any such Restricted Subsidiary
for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such
Restricted Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution paid to another
Restricted Subsidiary, to the limitation contained in this clause) and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition of
any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and
any gain (or loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
-9-
(5) extraordinary gains or losses;
(6) the cumulative effect of a change in accounting principles;
(7) any income or losses attributable to discontinued operations
(including operations disposed of during such periods whether or not such
operations were classified as discontinued);
(8) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of Consolidated Net
Income accrued at any time following the Issue Date; and
(9) if the Successor Company is not the Company, the aggregate net
income (or loss) of such Successor Company prior to the consolidation,
merger or transfer resulting in such Successor Company.
Notwithstanding the foregoing, for the purpose of Section 4.04 only, there shall
be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such Section pursuant to Section
4.04(a)(3)(D).
"Credit Agreement" means the Credit Agreement to be entered into among
XX Xxxxxxx, the Company, as guarantor, the lenders referred to therein, Credit
Suisse First Boston, as Administrative Agent, Sole Lead Arranger and Sole Book
Manager, and the Syndication Agent and Documentation Agent named therein,
together with the related documents thereto (including the term loans and
revolving loans thereunder, any guarantees and security documents), as amended,
extended, renewed, restated, supplemented or otherwise modified (in whole or in
part, and without limitation as to amount, terms, conditions, covenants and
other provisions, including any amendment or modification that increases the
amount of Indebtedness available to be borrowed thereunder) from time to time,
and any agreement (and related document) governing Indebtedness incurred to
Refinance, in whole or in part, the borrowings and commitments then outstanding
or permitted to be outstanding under such Credit Agreement or a successor Credit
Agreement, whether by the same or any other lender or group of lenders.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement designed to protect
such Person against fluctuations in currency values.
"Default" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
-10-
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part,
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that if such Capital Stock is issued to any
-------- -------
employee or to any plan for the benefit of employees of the Company or its
Subsidiaries or by any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Company in order to satisfy obligations as a result of such
employee's death or disability; and provided further, however, that any Capital
-------- ------- -------
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to purchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if (1) the "asset sale" or
"change of control" provisions applicable to such Capital Stock are not more
favorable to the holders of such Capital Stock than the terms applicable to the
Securities in Sections 4.06 and 4.09 of this Indenture and (2) any such
requirement only becomes operative after compliance with such terms applicable
to the Securities, including the purchase of any Securities tendered pursuant
thereto.
The amount of any Disqualified Stock that does not have a fixed
redemption, repayment or repurchase price will be calculated in accordance with
the terms of such Disqualified Stock as if such Disqualified Stock were
redeemed, repaid or repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this Indenture; provided,
--------
however, that if such Disqualified Stock could not be required to be redeemed,
-------
repaid or repurchased at the time of such determination, the redemption,
repayment or repurchase price will be the book value of such Disqualified Stock
as reflected in the most recent financial statements of such Person.
"DTC" means the Depository Trust Company.
"EBITDA" for any period means the sum of Consolidated Net Income, plus
the following to the extent deducted in calculating such Consolidated Net
Income:
(1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries,
-11-
(2) Consolidated Interest Expense,
(3) any non-recurring fees, expenses or charges related to any Equity
Offering, Permitted Investment, acquisition or Incurrence of Indebtedness
permitted to be Incurred by this Indenture (in each case, whether or not
successful), including any such fees, expenses or charges related to the
Transactions, in each case not exceeding $5.0 million in the aggregate for
all such non-recurring fees, expenses and charges attributable to the same
transaction or event (or group of related transactions or events),
(4) depreciation and amortization expense of the Company and its
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in
a prior period),
(5) all other non-cash losses, expenses and charges of the Company
and its consolidated Restricted Subsidiaries (excluding any such non-cash
loss, expense or charge to the extent that it represents an accrual of or
reserve for cash expenditures in any future period), and
(6) any non-recurring charges that are incurred and associated with
the restructuring of the operations of the Company and its consolidated
Subsidiaries announced prior to the Issue Date and implemented within 90
days after the Issue Date,
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at
the date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders.
"Equity Offering" means any primary offering of Capital Stock of the
Company or XX Xxxxxxx (other than Disqualified Stock)to Persons who are not
Affiliates of the Company other than (1) public offerings with respect to the
Company's Common Stock registered on Form S-8 and (2) issuances upon exercise of
options by employees of the Company or any of its Restricted Subsidiaries.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Securities" means the debt securities of the Company issued
pursuant to this Indenture in exchange for, and in an aggregate principal amount
at maturity equal to, the Initial Securities, in compliance with the terms of
the Registration Rights Agreement.
"Exempt Subsidiary" means any Restricted Subsidiary that shall have
had aggregate EBITDA of less than $250,000 for the period of the most recent
four consecutive fis-
-12-
cal quarters for which internal financial statements are available ending prior
to the date of the issuance or sale of its Capital Stock giving rise to such
determination; provided, however, that such sale or issuance is pursuant to a
-------- -------
plan or program for the sale or issuance of Capital Stock a majority of which is
sold to local management or to local strategic investors.
"Facilities" means the Term Loan Facilities and the Revolving Credit
Facilities.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary not
incorporated or organized under the laws of the United States of America, any
State thereof or the District of Columbia.
"Xxxxxxx Xxxxxx" means collectively, (1) FS Equity Partners III, L.P.,
(2) FS Equity Partners International L.P., (3) any investment fund that is
affiliated with Xxxxxxx Xxxxxx & Co. Incorporated and (4) Xxxxxxx Xxxxxx & Co.
Incorporated and any successor entity thereof controlled by the principals of
Xxxxxxx Xxxxxx & Co. Incorporated or any entity controlled by, or under common
control with, Xxxxxxx Xxxxxx & Co. Incorporated.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants,
(2) statements and pronouncements of the Financial Accounting
Standards Board,
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in periodic
reports required to be filed pursuant to Section 13 of the Exchange Act,
including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC. Except as
otherwise provided herein, all ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such Person (whether arising by virtue
of partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities
-13-
or services, to take-or-pay or to maintain financial statement conditions
or otherwise) or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
-------- -------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement or similar
agreement.
"Holder" or "Securityholder" means the Person in whose name a Security
is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
-------- -------
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Person at the time it becomes a Restricted Subsidiary. The
term "Incurrence" when used as a noun shall have a correlative meaning. Solely
for purposes of determining compliance with Section 4.03, (1) amortization of
debt discount or the accretion of principal with respect to a noninterest
bearing or other discount security and (2) the payment of regularly scheduled
interest in the form of additional Indebtedness of the same instrument or the
payment of regularly scheduled dividends on Capital Stock in the form of
additional Capital Stock of the same class and with the same terms will not be
deemed to be the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all Attributable
Debt in respect of Sale/Leaseback Transactions entered into by such Person;
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business);
-14-
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and
to the extent drawn upon, such drawing is reimbursed no later than the
twentieth Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of such
Person or, with respect to any Preferred Stock of any Subsidiary of such
Person, the principal amount of such Preferred Stock to be determined in
accordance with Section 1.04(7) (but excluding, in each case, any accrued
dividends);
(6) all obligations of the type referred to in clauses (1) through
(5) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through
(6) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
Notwithstanding the foregoing, in connection with the purchase by the Company or
any Restricted Subsidiary of any business, the term "Indebtedness" will exclude
post-closing payment adjustments to which the seller may become entitled to the
extent such payment is determined by a final closing balance sheet or such
payment depends on the performance of such business after the closing; provided,
--------
however, that, at the time of closing, the amount of any such payment is not
-------
determinable and, to the extent such payment thereafter becomes fixed and
determined, the amount is paid within 30 days thereafter. Indebtedness of any
Person shall include all Indebtedness of any partnership or other entity in
which such Person is a general partner or other equity holder with unlimited
liability other than Indebtedness which by its terms is non-recourse to such
Person and its assets.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date provided,
--------
however, that the principal amount of any noninterest bearing or other discount
-------
security at any date will be the principal amount thereof that would be shown on
a balance sheet of such Person dated such date prepared in accordance with GAAP.
-15-
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Qualified Party" means an investment banking firm,
accounting firm or appraisal firm of national standing; provided, however, that
-------- -------
such firm is not an Affiliate of the Company.
"Initial Securities" means (1) $65.0 million aggregate principal
amount of 16% Senior Notes Due July 20, 2011 issued on the Issue Date and (2)
Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person. Except as otherwise provided for
herein, the amount of an Investment shall be its fair market value at the time
the Investment is made and without giving effect to subsequent changes in value.
For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.04,
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
-------- -------
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment" in
an Unrestricted Subsidiary equal to an amount (if positive) equal to (x)
the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Board of Directors.
"Investment Grade Rating" means a rating equal to or higher than Baa3
(or the equivalent) and BBB- (or the equivalent) by Xxxxx'x Investors Service,
Inc. (or any successor
-16-
to the rating agency business thereof) and Standard & Poor's Ratings Group (or
any successor to the rating agency business thereof), respectively.
"Issue Date" means the date on which the Securities are initially
issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Melody" means X.X. Xxxxxx & Company, a Texas corporation.
"Melody Loan Arbitrage Facility" means a credit facility provided to
Melody by any depository bank in which Melody deposits payments relating to
mortgage loans for which Melody is servicer prior to distribution of such
payments to or for the benefit of the holders of such loans, so long as (1)
Melody applies all proceeds of loans made under such credit facility to purchase
Temporary Cash Investments and (2) all such Temporary Cash Investments purchased
by Melody with the proceeds of loans thereunder (and proceeds thereof and
distributions thereon) are pledged to the depository bank providing such credit
facility, and such bank has a first priority perfected security interest
therein, to secure loans made under such credit facility.
"Melody Mortgage Warehousing Facility" means the credit facility
provided by Residential Funding Corporation ("RFC") or any substantially similar
facility extended to any Mortgage Banking Subsidiary in connection with any
Mortgage Banking Activities, pursuant to which RFC or another lender makes loans
to Melody, the proceeds of which loans are applied by Melody (or any Mortgage
Banking Subsidiary) to fund commercial mortgage loans originated and owned by
Melody (or any Mortgage Banking Subsidiary) subject to an unconditional,
irrevocable (subject to customary exceptions) commitment to purchase such
mortgage loans by the Federal Home Loan Mortgage Corporation, the Federal
National Mortgage Association or any other quasi-federal governmental entity so
long as loans made by RFC or such other lender to Melody (or any Mortgage
Banking Subsidiary) thereunder are secured by a pledge of commercial mortgage
loans made by Melody (or any Mortgage Banking Subsidiary) with the proceeds of
such loans and RFC or such other lender has a perfected first priority security
interest therein, to secure loans made under such credit facility.
"Melody Permitted Indebtedness" means Indebtedness of Melody under the
Melody Loan Arbitrage Facility, the Melody Mortgage Warehousing Facility and the
Melody Working Capital Facility and Indebtedness of any Mortgage Banking
Subsidiary under the Melody Mortgage Warehousing Facility that is, in all cases,
non-recourse to the Company or any of its other Subsidiaries.
"Melody Working Capital Facility" means a credit facility provided by
a financial institution to Melody, so long as (1) the proceeds of loans
thereunder are applied only to provide working capital to Melody, (2) loans
under such credit facility are unsecured, and (3)
-17-
the aggregate principal amount of loans outstanding under such credit facility
at no time exceeds $1.0 million.
"Merger" means the merger of Xxxx XX Corp. with and into XX Xxxxxxx
pursuant to the Merger Agreement.
"Merger Agreement" means the amended and restated agreement and plan
of merger dated as of May 31, 2001, between XX Xxxxxxx, the Company and Xxxx XX
Corp., as such agreement may be further amended so long as such amendments are
not adverse to Holders, and all other documents entered into or delivered in
connection with the Merger Agreement.
"Mortgage Banking Activities" means the origination by a Mortgage
Banking Subsidiary of mortgage loans in respect of commercial and multi-family
residential real property, and the sale or assignment of such mortgage loans and
the related mortgages to another person (other than the Company or any of its
Subsidiaries) within sixty days after the origination thereof; provided,
--------
however, that in each case prior to origination of any mortgage loan, the
-------
Company, XX Xxxxxxx or a Mortgage Banking Subsidiary, as the case may be, shall
have entered into a legally binding and enforceable purchase and sale agreement
with respect to such mortgage loan with a person that purchases such loans in
the ordinary course of business.
"Mortgage Banking Subsidiary" means Melody and its subsidiaries that
are engaged in Mortgage Banking Activities.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of:
(1) all legal, accounting, investment banking and brokerage fees,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP, as a consequence of such
Asset Disposition,
(2) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of
the proceeds from such Asset Disposition,
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition, and
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(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Obligations" means with respect to any Indebtedness all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness.
"Offering Circular" means the Confidential Offering Circular dated
June 29, 2001 relating to the Securities.
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the President, the Chairman of the Americas, any Vice President, the
Chief Financial Officer, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Permitted Co-investment" means any Investment by any Restricted
Subsidiary which is formed solely to acquire up to 5% of the Capital Stock of
any Person (a "Co-investment Entity") managed by such Restricted Subsidiary
whose principal purpose is to invest, directly or indirectly, in commercial real
estate; provided, however, that such Restricted Subsidiary is acting in such
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capacity pursuant to an arrangement substantially similar to arrangements
entered into by Restricted Subsidiaries involved in such activities prior to the
Issue Date.
"Permitted Holders" means (1) RCBA and Xxxxxxx Xxxxxx, (2) any member
of senior management of the Company on the Issue Date and (3) DLJ Investment
Funding, Inc. and its affiliates.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in
(1) the Company, a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
--------
however, that (A) the primary business of such Restricted Subsidiary is a
-------
Related Business and
-19-
(B) such Restricted Subsidiary is not restricted from making dividends or
similar distributions by contract, operation of law or otherwise;
(2) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, the Company or a Restricted Subsidiary;
provided, however, that such Person's primary business is a Related
-------- -------
Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
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that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel, moving and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course
of business;
(6) loans or advances to employees or independent contractors made in
the ordinary course of business consistent with past practices of the
Company or such Restricted Subsidiary;
(7) loans or advances to clients and vendors made in the ordinary
course of business consistent with past practices of the Company or such
Restricted Subsidiary in an aggregate amount outstanding at any time not
exceeding $1.5 million;
(8) stock, obligations or securities received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments;
(9) any Person to the extent such Investment represents the non-cash
portion of the consideration received for an Asset Disposition as permitted
pursuant to Section 4.06;
(10) any Person where such Investment was acquired by the Company or
any of its Restricted Subsidiaries (a) in exchange for any other Investment
or accounts receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of a bankruptcy, workout,
reorganization or recapitalization of the issuer of such other Investment
or accounts receivable or (b) as a result of a foreclosure by the Company
or any of its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to any secured
Investment in default;
(11) Hedging Obligations entered into in the ordinary course of the
Company's or any Restricted Subsidiary's business and not for the purpose
of speculation;
-20-
(12) any Person to the extent such Investment replaces or refinances an
Investment in such Person existing on the Issue Date in an amount not exceeding
the amount of the Investment being replaced or refinanced; provided, however,
-------- -------
the new Investment is on terms and conditions no less favorable than the
Investment being renewed or replaced;
(13) Investments in insurance on the life of any participant in any
deferred compensation plan of the Company or XX Xxxxxxx made in the ordinary
course of business consistent with past practices of the Company or XX Xxxxxxx;
(14) Permitted Co-investments in an aggregate amount not exceeding (a) for
the period from the day after the Issue Date to December 31, 2001, the excess of
$20.0 million over the aggregate amount of all such Investments made in the
period from January 1, 2001 to the Issue Date, and (b) $20.0 million in each
calendar year thereafter; provided, however, that such Investments made in Co-
-------- -------
investment Entities investing in countries that are not members of the
Organization for Economic Co-operation and Development shall not exceed $5.0
million in any calendar year; provided further, however, that (x) at the time of
-------- ------- -------
such Investment, no Default shall have occurred and be continuing (or result
therefrom)and (y) immediately after giving pro forma effect to such Investment,
the Company would be able to Incur an additional $1.00 of Indebtedness pursuant
to Section 4.03(a); and
(15) so long as no Default shall have occurred and be continuing (or result
therefrom), any Person in an aggregate amount which, when added together with
the amount of all the Investments made pursuant to this clause (15) which at
such time have not been repaid through repayments of loans or advances or other
transfers of assets, does not exceed $15.0 million (with the fair market value
of each Investment being measured at the time made and without giving effect to
subsequent changes in value).
"Permitted Liens" means the following types of Liens:
(1) any interest or title of a lessor under any Capital Lease Obligation;
provided, however, that such Liens do not extend to any property or assets which
-------- -------
is not leased property subject to such Capital Lease Obligation;
(2) Liens securing Capital Lease Obligations and Purchase Money
Indebtedness which may be incurred under Section 4.03(b)(14); provided, however,
-------- -------
that in the case of Purchase Money Indebtedness (A) the Indebtedness shall not
exceed the cost of such property or assets being acquired or constructed and
shall not be secured by any property or assets of the Company or any Restricted
Subsidiary of the Company other than the property and assets being acquired or
constructed and (B) the Lien securing such Indebtedness shall be created within
180 days of such acquisition or construction;
-21-
(3) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(4) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
relating to such letters of credit and products and proceeds thereof;
(5) Liens securing Hedging Obligations which Hedging Obligations
relate to Indebtedness that is otherwise permitted under this Indenture;
(6) Liens securing Acquired Indebtedness incurred in accordance with
Section 4.03; provided, however, that (A) such Liens secured such Acquired
-------- -------
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and
were not granted in connection with, or in anticipation of, the incurrence
of such Acquired Indebtedness by the Company or a Restricted Subsidiary of
the Company and (B) such Liens do not extend to or cover any property or
assets of the Company or of any of its Restricted Subsidiaries other than
the property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company;
(7) Liens on commercial mortgage loans originated and owned by Melody
or any Mortgage Banking Subsidiary pursuant to the Melody Mortgage
Warehousing Facility;
(8) Liens on investments made by Melody in connection with the Melody
Loan Arbitrage Facility to secure Indebtedness under the Melody Loan
Arbitrage Facility, if such investments were acquired by Melody with the
proceeds of such Indebtedness;
(9) Liens for taxes, fees, assessments or other governmental charges
not yet due or which are being contested in good faith by appropriate
proceedings and as to which the Company or its Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to GAAP; and
(10) statutory Liens of landlords and carriers', warehousemen's,
mechanics', suppliers', materialmen's, repairmen or other like Liens
arising in the ordinary course of business and securing obligations that
are not due and payable or which are being contested in good faith by
appropriate proceedings and as to which the Company or its Subsidiaries
shall have set aside on its books such reserves or other appropriate
provision, if any, as may be required pursuant to GAAP.
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"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"PIK Interest" means pay-in-kind interest payable on all outstanding
Securities for which Cash Interest is not paid, in the form of the issuance of
Additional Securities.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security which is due or overdue or is to become
due at the relevant time.
"Private Exchange Securities" has the meaning given such term in the
Registration Rights Agreement.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs that were
(1) directly attributable to an asset acquisition and calculated on a
basis that is consistent with Regulation S-X under the Securities Act in
effect and applied as of the Issue Date, or
(2) implemented by the business that was the subject of any such
asset acquisition within six months of the date of the asset acquisition
and that are supportable and quantifiable by the underlying accounting
records of such business,
as if, in the case of each of clause (1) and (2), all such reductions in costs
had been effected as of the beginning of such period.
"Purchase Money Indebtedness" means Indebtedness (including Capital
Lease Obligations) (1) consisting of the deferred purchase price of property,
conditional sale obligations, obligations under any title retention agreement,
other purchase money obligations and obligations in respect of industrial
revenue bonds or similar Indebtedness, in each case where the maturity of such
Indebtedness does not exceed the anticipated useful life of the asset being
financed, and (2) Incurred to finance the acquisition by the Company or a
Restricted Subsidiary of such asset, including additions and improvements;
provided, however, that any Lien arising in connection with any such
-------- -------
Indebtedness shall be limited to the specified asset being financed or, in the
case of real property or fixtures, including additions and improvements, the
real property on which such asset is attached; provided further, however, that
-------- ------- -------
such Indebtedness is Incurred within 180 days after such acquisition of such
assets by the Company or any Restricted Subsidiary.
-23-
"Rating Agencies" means Standard and Poor's Ratings Group and Xxxxx'x
Investors Service, Inc. or any successor to the respective rating agency
business thereof.
"RCBA" means (1) RCBA Strategic Partners, L.P., (2) XXXX Capital
Partners, L.P. and its successors and (3) any investment fund that is affiliated
with XXXX Capital Partners, L.P. or its successors.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
-------- -------
(1) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced;
(2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than
the Average Life of the Indebtedness being Refinanced, and
(3) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium and
defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
-------- ------- -------
Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the
Company or (B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Notes Registration Rights
Agreement dated July 20, 2001, among the Company and Credit Suisse First Boston
Corporation.
"Related Business" means any business in which the Company or any of
its Restricted Subsidiaries was engaged on the Issue Date and any business
related, ancillary or complementary to any business of the Company or any of its
Restricted Subsidiaries in which the Company or any of its Restricted
Subsidiaries was engaged on the Issue Date.
-24-
"Restricted Payment" with respect to any Person means
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its Capital
Stock (other than dividends or distributions payable solely in its Capital
Stock (other than Disqualified Stock) and dividends or distributions
payable solely to the Company or a Restricted Subsidiary, and other than
pro rata dividends or other distributions made by a Subsidiary that is not
a Wholly Owned Subsidiary to minority stockholders (or owners of an
equivalent interest in the case of a Subsidiary that is an entity other
than a corporation)),
(2) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of any
option to exchange any Capital Stock (other than into Capital Stock of the
Company that is not Disqualified Stock),
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity, scheduled
repayment or scheduled sinking fund payment of any Subordinated Obligations
of such Person (other than the purchase, repurchase, or other acquisition
of Subordinated Obligations purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each
case due within one year of the date of such purchase, repurchase or other
acquisition) or
(4) the making of any Investment (other than a Permitted Investment)
in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facility
contained in the Credit Agreement and any other facility or financing
arrangement that Refinances, in whole or in part, and such revolving credit
facility.
"Sale/Leaseback Transaction" means an arrangement relating to property
owned by the Company or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Company or a Restricted Subsidiary whereby the Company or a
Restricted Subsidiary transfers such property to a Person and the Company or a
Restricted Subsidiary leases it from such Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
-25-
"Securities" means the Securities issued under this Indenture.
"Senior Subordinated Notes" means the 11 1/4% Senior Subordinated
Notes due June 15, 2011 of Xxxx XX Corp.
"Significant Subsidiary" means XX Xxxxxxx and any Restricted
Subsidiary that would be a "Significant Subsidiary" of the Company within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities
of such Person pursuant to a written agreement to that effect.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by (1) such Person, (2) such Person and one or more
Subsidiaries of such Person or (3) one or more Subsidiaries of such Person.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof,
(2) investments in time deposit accounts, bankers' acceptances,
certificates of deposit and money market deposits maturing within one year
of the date of acquisition thereof issued by a bank or trust company which
is organized under the laws of the United States of America, any State
thereof or any foreign country recognized by the United States of America,
and which bank or trust company has capital, surplus and undivided profits
aggregating in excess of $50,000,000 (or the foreign currency equivalent
thereof) and has outstanding debt that is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act) or any money-market fund sponsored by a registered broker-
dealer or mutual fund distributor,
(3) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (1) above and
clauses (4) and (5) below entered into with a bank meeting the
qualifications described in clause (2) above,
-26-
(4) investments in commercial paper, maturing not more than one year
from the date of creation thereof, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x Investors
Service, Inc. or "A-1" (or higher) according to Standard and Poor's Ratings
Group,
(5) investments in securities with maturities of one year or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by Standard & Poor's Ratings Group or "A" by Xxxxx'x Investors Service,
Inc., and
(6) other short-term investments utilized by Foreign Restricted
Subsidiaries in accordance with normal investment practices for cash
management in investments of a type analogous to the foregoing.
"Term Loan Facility" means the term loan facilities contained in the
Credit Agreement and any other facilities or financing arrangements that
Refinances in whole or in part any such term loan facility.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-
77bbbb) as in effect on the date of this Indenture.
"Transactions" shall mean, collectively, the following transactions to
occur on or prior to the Issue Date: (a) the consummation of the Merger, (b)
the execution and delivery of the Credit Agreement and the initial borrowings
thereunder, (c) the closing of the tender offer for and the receipt of the
requisite consents in connection with the consent solicitation in respect of XX
Xxxxxxx'x existing 8-7/8% Senior Subordinated Notes Due 2006, (d) the Cash
Equity Contribution and (e) the payment of all fees and expenses then due and
owing that are required to be paid on or prior to the Issue Date in connection
with the offering of the Securities.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer of the Trustee assigned by the
Trustee to administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
-27-
"Unrestricted Subsidiary" means:
(1) any Subsidiary of the Company that at the time of determination
shall be designated an Unrestricted Subsidiary by the Board of Directors in
the manner provided below; and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary of the Company) to be an
Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries owns
any Capital Stock or Indebtedness of, or holds any Lien on any property of, the
Company or any other Subsidiary of the Company that is not a Subsidiary of the
Subsidiary to be so designated; provided, however, that either (A) the
-------- -------
Subsidiary to be so designated has total assets of $1,000 or less or (B) if such
Subsidiary has assets greater than $1,000, such designation would be permitted
under Section 4.04. The Board of Directors may designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided, however, that immediately
-------- -------
after giving effect to such designation (A) the Company could Incur $1.00 of
additional Indebtedness under Section 4.03(a) and (B) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary amount in
a currency other than U.S. dollars, at any time for determination thereof, the
amount of U.S. dollars obtained by converting such foreign currency involved in
such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as published in The Wall Street
Journal in the "Exchange Rates" column under the heading "Currency Trading" on
the date two Business Days prior to such determination.
Except as described in Section 4.03, whenever it is necessary to
determine whether the Company has complied with any covenant in this Indenture
or a Default has occurred and an amount is expressed in a currency other than
U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent
determined as of the date such amount is initially determined in such currency.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
-28-
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares and other than
shares of Capital Stock of XX Xxxxxxx issuable upon exercise of employee stock
options outstanding on the Issue Date) is owned by the Company or one or more
Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
-----------------
Defined in
Term Section
---- -------
"Affiliate Transaction"........... 4.07
"Bankruptcy Law".................. 6.01
"Change of Control Offer"......... 4.09(b)
"covenant defeasance option"...... 8.01(b)
"Custodian"....................... 6.01
"Event of Default"................ 6.01
"legal defeasance option"......... 8.01(b)
"Legal Holiday"................... 10.08
"Offer"........................... 4.06(b)
"Offer Amount".................... 4.06(c)(2)
"Offer Period".................... 4.06(c)(2)
"Paying Agent".................... 2.03
"Purchase Date"................... 4.06(c)(1)
"Registrar"....................... 2.03
"Successor Company"............... 5.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
-------------------------------------------------
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
-29-
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) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater; and
(8) all references to the date the Securities were originally issued
shall refer to the Issue Date.
ARTICLE 2
The Securities
--------------
SECTION 2.01. Form and Dating. The Exchange Securities, the Private
---------------
Exchange Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, which is hereby incorporated in and
expressly made a part of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange rule, agreements to
which the Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in the Appendix and Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. One Officer shall sign
----------------------------
the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
-30-
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for service of notices
and demands.
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
---------
Securities may be presented for payment (the "Paying Agent"). The Registrar
------------
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of any such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.07.
The Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
-----------------------------------
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section,
the Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.05. Securityholder Lists. The Trustee shall preserve in as
--------------------
current a form as is reasonably practicable the most recent list available to it
of the names and
-31-
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee, in writing at least five Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. The Securities shall be issued
---------------------
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(a) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met.
SECTION 2.07. Replacement Securities. If a mutilated Security is
----------------------
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge
the Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
----------------------
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
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SECTION 2.09. Temporary Securities. Until definitive Securities are
--------------------
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.
SECTION 2.10. Cancellation. The Company at any time may deliver
------------
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
------------------
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
-------------
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
-------- -------
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 2.13. Issuance of Additional Securities. The Company shall be
---------------------------------
entitled, subject, in the case of Additional Securities other than Additional
Securities issued as PIK Interest, to its compliance with Section 4.03, to issue
Additional Securities under this Indenture which shall have identical terms as
the Initial Securities issued on the Issue Date, other than with respect to the
date of issuance and, in the case of Additional Securities other than Additional
Securities issued as PIK Interest, issue price. The Initial Securities issued
on the Issue Date, any Additional Securities and all Exchange Securities or
Private Exchange Securities issued in exchange therefor shall be treated as a
single class for all purposes under this Indenture.
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With respect to any Additional Securities (other than Additional
Securities issued as PIK Interest), the Company shall set forth in a resolution
of the Board of Directors and an Officers' Certificate, a copy of each which
shall be delivered to the Trustee, the following information:
(1) the aggregate principal amount of such Additional Securities to
be authenticated and delivered pursuant to this Indenture;
(2) the issue price, the issue date and the CUSIP number of such
Additional Securities; provided, however, that no Additional Securities may
-------- -------
be issued at a price that would cause such Additional Securities to have
"original issue discount" within the meaning of Section 1273 of the Code
(unless then applicable regulations under the Code would treat the
outstanding Securities and the Additional Securities as part of the same
issue); and
(3) whether such Additional Securities shall be Transfer Restricted
Securities and issued in the form of Initial Securities as set forth in the
Appendix to this Indenture or shall be issued in the form of Exchange
Securities as set forth in Exhibit A.
With respect to any Additional Securities issued as PIK Interest in
accordance with paragraph 1 of the Securities, the Company shall deliver to the
Trustee:
(1) no later than the record date for the relevant interest payment
date, a written notice setting forth the extent to which such interest
payment will be made in the form of PIK Interest; and
(2) no later than one Business Day prior to the relevant interest
payment date, an order to authenticate and deliver such Additional
Securities.
Any Additional Securities issued as PIK Interest shall, after being executed and
authenticated pursuant to Section 2.02, be (i) delivered by the Trustee to the
Securityholders as of the relevant record date at such Securityholders'
registered address if the Securities are then held in the form of certificated
Securities in accordance with Section 2.4 of the Rule 144A/IAI Appendix hereto
and (ii) be deposited with or on behalf of DTC for the benefit of the beneficial
owners of the Securities as of the relevant record date, as applicable.
ARTICLE 3
Redemption
----------
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
------------------
Securities pursuant to paragraph 5 of the Securities or is required to redeem
Securities pursuant to paragraph 6 of the Securities, it shall notify the
Trustee in writing of the redemption date, the
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principal amount of Securities to be redeemed and the paragraph of the
Securities pursuant to which the redemption will occur.
If the Company is required to redeem Securities pursuant to paragraph
6 of the Securities, it may reduce the accreted value of Securities required to
be redeemed to the extent it is permitted a credit by the terms of the
Securities and it notifies the Trustee of the amount of the credit and the basis
for it. If the reduction is based on a credit for redeemed or canceled
Securities that the Company has not previously delivered to the Trustee for
cancellation, it shall deliver such Securities with the notice.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the redemption date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
--------------------------------------
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than
$1,000. Securities and portions of them the Trustee selects shall be in
principal amounts of $1,000 or a whole multiple of $1,000. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
--------------------
than 60 days before a date for redemption of Securities (except in the case of a
redemption pursuant to paragraph 6 of the Securities, in which case, the notice
shall be mailed within the time period specified in such paragraph), the Company
shall mail a notice of redemption by first-class mail to each Holder of
Securities to be redeemed at such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
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(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to be
redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment pursuant
to the terms of this Indenture, interest on Securities (or portion thereof)
called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the Securities
called for redemption are being redeemed; 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
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
------------------------------
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder. Once notice of a redemption pursuant to
paragraph 6 of the Securities is mailed, the Company shall be entitled to redeem
the Securities pursuant to such paragraph at the redemption price provided for
therein notwithstanding the occurrence of an Event of Default after the mailing
date of such notice.
SECTION 3.05. Deposit of Redemption Price. Prior to the redemption
---------------------------
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all Securities
to be redeemed on that date other than Securities or portions of Securities
called for redemption which have been delivered by the Company to the Trustee
for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
---------------------------
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
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ARTICLE 4
Covenants
---------
Following the first day that (a) the ratings assigned to the
Securities by both of the Rating Agencies are Investment Grade Ratings and (b)
no Default has occurred and is continuing under this Indenture (and
notwithstanding that the Company may later cease to have an Investment Grade
Rating from either or both Rating Agencies or default under this Indenture), the
Company and its Restricted Subsidiaries shall not be subject to Sections 4.03,
4.04, 4.05, 4.06, 4.07 and 4.08.
SECTION 4.01. Payment of Securities. The Company shall promptly pay
---------------------
the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money or PIK Interest
sufficient to pay all principal and interest then due and the Trustee or the
Paying Agent, as the case may be, is not prohibited from paying such money or
PIK Interest to the Securityholders on that date pursuant to the terms of this
Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Notwithstanding that the Company may not
-----------
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall file with the SEC and provide the Trustee and
Securityholders within 15 days after it files them with the SEC with such annual
reports and such information, documents and other reports as are specified in
Sections 13 and 15(d) of the Exchange Act and applicable to a U.S. corporation
subject to such Sections, such information, documents and other reports to be so
filed with the SEC at the times specified for the filings of such information,
documents and reports under such Sections provided, however, that the Company
-------- -------
shall not be so obligated to file such reports with the SEC if the SEC does not
permit such filing, in which event the Company will make available such
information to the Trustee and Securityholders within 15 days after the time the
Company would be required to file such information with the SEC if it were
subject to Section 13 or 15(d) of the Exchange Act.
In addition, the Company shall furnish to the Holder of the Securities
and to prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so
long any Securities are not freely transferable under the Securities Act. The
Company also shall comply with the other provisions of TIA (S) 314(a).
SECTION 4.03. Limitation on Indebtedness. (a) The Company shall not,
--------------------------
and shall not permit any Restricted Subsidiary to, Incur, directly or
indirectly, any Indebted-
-37-
ness; provided, however, that the Company and its Restricted Subsidiaries shall
-------- -------
be entitled to Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto, no Default has occurred and is continuing and the
Consolidated Coverage Ratio exceeds 2.25 to 1 if such Indebtedness is Incurred
prior to June 1, 2003 or 2.5 to 1 if such Indebtedness is Incurred thereafter.
(b) Notwithstanding the foregoing paragraph (a), the Company and the
Restricted Subsidiaries shall be entitled to Incur any or all of the following
Indebtedness:
(1) Indebtedness Incurred pursuant to any Revolving Credit Facility;
provided, however, that, immediately after giving effect to any such
-------- -------
Incurrence, the aggregate principal amount of all Indebtedness Incurred
under this clause (1) and then outstanding does not exceed the greater of
(A) $100.0 million less the sum of all principal payments with respect to
such Indebtedness pursuant to Section 4.06(a)(3)(A) and (B) 80% of the book
value of the accounts receivable of XX Xxxxxxx and its Restricted
Subsidiaries;
(2) Indebtedness Incurred pursuant to any Term Loan Facility;
provided, however, that, after giving effect to any such Incurrence, the
-------- -------
aggregate principal amount of all Indebtedness Incurred under this clause
(2) and then outstanding does not exceed $225.0 million less the aggregate
sum of all principal payments actually made from time to time after the
Issue Date with respect to such Indebtedness (other than principal payments
made from Refinancings thereof);
(3) Indebtedness owed to and held by the Company or a Restricted
Subsidiary; provided, however, that (A) any subsequent issuance or transfer
-------- -------
of any Capital Stock which results in any such Restricted Subsidiary
ceasing to be a Restricted Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Company or a Restricted Subsidiary) shall
be deemed, in each case, to constitute the Incurrence of such Indebtedness
by the obligor thereon and (B) if the Company is the obligor on such
Indebtedness, such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations with respect to the Securities;
(4) the Securities and the Exchange Securities (other than any
Additional Securities (except Additional Securities issued as PIK
Interest));
(5) Indebtedness of the Company and its Restricted Subsidiaries
outstanding on the Issue Date (after giving effect to the Transactions)
(other than Indebtedness described in clause (1), (2), (3) or (4) of this
Section 4.03(b));
(6) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Subsidary was acquired by the Company
or any of its Restricted Subsidiaries (other than Indebtedness Incurred in
connection with, or to provide all or any portion of the funds or credit
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became
-38-
a Subsidiary or was acquired by the Company or any of its Restricted
Subsidiaries); provided, however, that on the date of such acquisition and after
-------- -------
giving effect thereto, the aggregate principal amount of all Indebtedness
Incurred pursuant to this clause(6) and then outstanding does not
exceed $10.0 million;
(7) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to Section 4.03(a) or pursuant to clause (4), (5) or (6) of this
Section 4.03(b) or this clause (7); provided, however, that to the extent
-------- -------
such Refinancing Indebtedness directly or indirectly Refinances
Indebtedness of a Subsidiary Incurred pursuant to clause (6), such
Refinancing Indebtedness shall be Incurred only by such Subsidiary;
(8) Hedging Obligations entered into in the ordinary course of
business and not for the purpose of speculation;
(9) obligations in respect of letters of credit, performance, bid and
surety bonds, completion guarantees, payment obligations in connection with
self-insurance or similar requirements provided by the Company or any
Restricted Subsidiary in the ordinary course of business;
(10) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the ordinary course of business; provided, however,
-------- -------
that such Indebtedness is extinguished within five Business Days of its
Incurrence;
(11) any Guarantee (including the Subsidiary Guaranties) by the
Company or a Restricted Subsidiary of Indebtedness or other obligations of
the Company or any of its Restricted Subsidiaries so long as the Incurrence
of such Indebtedness by the Company or such Restricted Subsidiary is
permitted under the terms of this Indenture (other than Indebtedness
Incurred pursuant to clause (6) above);
(12) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, in
each case, incurred or assumed in connection with the acquisition or
disposition of any business, assets or a Subsidiary; provided, however that
-------- -------
(A) such Indebtedness is not reflected on the balance sheet of the Company
or any Restricted Subsidiary (contingent obligations referred to in a
footnote or footnotes to financial statements and not otherwise reflected
on the balance sheet will not be deemed to be reflected on such balance
sheet for purposes of this clause (A)) and (B) in the case of a
disposition, the maximum liability in respect of such Indebtedness shall at
no time exceed the gross proceeds including non-cash proceeds (the fair
market value of such non-cash proceeds being determined at the time
received and without giving effect to any subsequent changes in value)
actually received by the Company or such Restricted Subsidiary in
connection with such disposition;
(13) Melody Permitted Indebtedness;
-39-
(14) Purchase Money Indebtedness Incurred to finance the acquisition
by the Company or any Restricted Subsidiary of any fixed or capital assets
in the ordinary course of business in an aggregate principal amount which,
when taken together with all other Indebtedness Incurred pursuant to this
clause (14) and then outstanding, does not exceed $10.0 million;
(15) Indebtedness of Foreign Restricted Subsidiaries in an aggregate
principal amount which, when taken together with all other Indebtedness of
Foreign Restricted Subsidiaries Incurred pursuant to this clause (15) and
then outstanding, does not exceed $15.0 million; and
(16) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount which, when taken together with all other
Indebtedness of the Company and the Restricted Subsidiaries outstanding on
the date of such Incurrence (other than Indebtedness permitted by clauses
(1) through (15) of this Section 4.03(b) or Section 4.03(a)), does not
exceed $30.0 million.
(c) Notwithstanding the foregoing, (i) the Company will not Incur any
Indebtedness pursuant to Section 4.03(b) if the proceeds thereof are used,
directly or indirectly, to Refinance any Subordinated Obligations of the Company
unless such Indebtedness shall be subordinated to the Securities to at least the
same extent as such Subordinated Obligations and (ii) no Restricted Subsidiary
will Incur any Indebtedness pursuant to the foregoing paragraph (b) if the
proceeds thereof are used, directly or indirectly, to Refinance Indebtedness of
the Company.
(d) For purposes of determining compliance with this Section 4.03,
(1) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described herein, the Company, in its sole
discretion, shall classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses (provided that any Indebtedness originally classified as
Incurred pursuant to clause (b)(16) above may later be reclassified as having
been Incurred pursuant to paragraph (a) above to the extent that such
reclassified Indebtedness could be Incurred pursuant to paragraph (a) above at
the time of such reclassification) and (2) the Company shall be entitled to
divide and classify an item of Indebtedness in more than one of the types of
Indebtedness described herein.
For purposes of determining compliance with any U.S. dollar
restriction on the Incurrence of Indebtedness where the Indebtedness Incurred is
denominated in a different currency, the amount of such Indebtedness will be the
U.S. Dollar Equivalent determined on the date of the Incurrence of such
Indebtedness, provided, however, that if any such Indebtedness denominated in a
-------- -------
different currency is subject to a Currency Agreement with respect to U.S.
dollars covering all principal, premium, if any, and interest payable on such
Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be
as provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced
will be the U.S. Dollar Equivalent of the Indebt-
-40-
edness Refinanced, except to the extent that (1) such U.S. Dollar
Equivalent was determined based on a Currency Agreement, in which case the
Refinancing Indebtedness will be determined in accordance with the preceding
sentence, and (2) the principal amount of the Refinancing Indebtedness exceeds
the principal amount of the Indebtedness being Refinanced, in which case the
U.S. Dollar Equivalent of such excess will be determined on the date such
Refinancing Indebtedness is Incurred.
SECTION 4.04. Limitation on Restricted Payments. (a) The
---------------------------------
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness under Section 4.03(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the Issue Date to the end of
the most recent fiscal quarter ended for which internal financial
statements are available prior to the date of such Restricted Payment (or,
in case such Consolidated Net Income shall be a deficit, minus 100% of such
deficit); plus
----
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an issuance or
sale to a Subsidiary of the Company and other than an issuance or sale to
an employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees) and 100% of
any cash capital contribution received by the Company from its shareholders
subsequent to the Issue Date; plus
----
(C) the amount by which Indebtedness of the Company is
reduced on the Company's or XX Xxxxxxx'x balance sheet upon the conversion
or exchange (other than by a Subsidiary of the Company) subsequent to the
Issue Date of any Indebtedness of the Company or XX Xxxxxxx convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of the
Company or XX Xxxxxxx (less the amount of any cash, or the fair value of
any other property, distributed by the Company or XX Xxxxxxx upon such
conversion or exchange); plus
----
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(D) an amount equal to the sum of (x) the net reduction in
the Investments (other than Permitted Investments) made by the
Company or any Restricted Subsidiary in any Person resulting from
repurchases, repayments or redemptions of such Investments by
such Person, proceeds realized on the sale of such Investment and
proceeds representing the return of capital (excluding dividends
and distributions), in each case received by the Company or any
Restricted Subsidiary and (y) to the extent such Person is an
Unrestricted Subsidiary, the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market
value of the net assets of such Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum shall not
-------- -------
exceed, in the case of any such Person or Unrestricted
Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted
Payment) by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary.
(b) The provisions of Section 4.04(a) shall not prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of
the substantially concurrent sale of, or made by exchange for, Capital
Stock of the Company (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) or a substantially
concurrent cash capital contribution received by the Company from its
shareholders; provided, however, that (A) such Restricted Payment shall be
-------- -------
excluded in the calculation of the amount of Restricted Payments and (B)
the Net Cash Proceeds from such sale or such cash capital contribution (to
the extent so used for such Restricted Payment) shall be excluded from the
calculation of amounts under Section 4.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations of the
Company or a Restricted Subsidiary made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Indebtedness which is
permitted to be Incurred pursuant to Section 4.03; provided, however, that
-------- -------
such purchase, repurchase, redemption, defeasance or other acquisition or
retirement for value shall be excluded in the calculation of the amount of
Restricted Payments;
(3) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this Section 4.04; provided, however, that such dividend shall be
-------- -------
included in the calculation of the amount of Restricted Payments;
-42-
(4) repurchases of Capital Stock of the Company required under XX
Xxxxxxx'x 401(k) plan as it existed as of the Issue Date; provided,
--------
however, that such repurchases shall be excluded from the calculation of
-------
the amount of Restricted Payments;
(5) so long as, in the case of clause (I) below, no Default has
occurred and is continuing, the repurchase or other acquisition of shares
of Capital Stock of the Company or any of the Company's Subsidiaries from
employees (including substantially full-time independent contractors),
former employees, directors, former directors or consultants of the Company
or any of its Subsidiaries (or permitted transferees of such employees,
former employees, directors, former directors or consultants): (I)
pursuant to the terms of the agreements (including employment agreements)or
plans (or amendments thereto)approved by the Board of Directors under which
such individuals purchase or sell or are granted the option to purchase or
sell, shares of such Capital Stock; provided, however, that the aggregate
-------- -------
amount of such repurchases and other acquisitions shall not exceed the sum
of (A) $5.0 million, (B) the Net Cash Proceeds from the sale of Capital
Stock to members of management, consultants or directors of the Company and
its Subsidiaries that occurs after the Issue Date (to the extent the Net
Cash Proceeds from the sale of such Capital Stock have not otherwise been
applied to the payment of Restricted Payments by virtue of clause (3)(B) of
paragraph (a) above) and (C) the cash proceeds of any "key man" life
insurance policies that are used to make such repurchases or (II) in
connection with the cancellation of Indebtedness owed to the Company or any
of its Restricted Subsidiaries, the proceeds of such Indebtedness was used
to purchase shares of Capital Stock of the Company; provided further,
-------- -------
however, that (x) such repurchases and other acquisitions shall be excluded
-------
in the calculation of the amount of Restricted Payments and (y) the Net
Cash Proceeds from such sale shall be excluded from the calculation of
amounts under clause (3)(B) of paragraph (a) above;
(6) Investments made by Melody in connection with the Melody Loan
Arbitrage Facility or the Melody Mortgage Warehousing Facility; provided,
--------
however, that such Investments shall be excluded in the calculation of the
-------
amount of Restricted Payments;
(7) payments required pursuant to the terms of the Merger
Agreement to consummate the Merger; provided, however, that such payments
-------- -------
shall be excluded in the calculation of the amount of Restricted Payments;
(8) Restricted Payments in an aggregate amount which, when taken
together with all Restricted Payments made pursuant to this clause (8)
which have not been repaid, does not exceed $20.0 million; provided,
--------
however, that (A) at the time of such Restricted Payments, no Default shall
-------
have occurred and be continuing (or result therefrom) and (B) such
Restricted Payments shall be excluded in the calculation of the amount of
Restricted Payments.
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SECTION 4.05. Limitation on Restrictions on Distributions from
------------------------------------------------
Restricted Subsidiaries. The Company shall not, and shall not permit any
-----------------------
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c),
(A) any encumbrance or restriction pursuant to an agreement
of XX Xxxxxxx or any of its Subsidiaries in effect at or entered into
on the Issue Date;
(B) any encumbrance or restriction contained in the terms of
any Indebtedness Incurred pursuant to Section 4.03(b)(15) or any
agreement pursuant to which such Indebtedness was issued if (x) either
(i) the encumbrance or restriction applies only in the event of and
during the continuance of a payment default or a default with respect
to a financial covenant contained in such Indebtedness or agreement or
(ii) the Company determines at the time any such Indebtedness is
Incurred (and at the time of any modification of the terms of any such
encumbrance or restriction) that any such encumbrance or restriction
will not materially affect the Company's ability to make principal or
interest payments on the Securities and (y) the encumbrance or
restriction is not materially more disadvantageous to the Holders than
is customary in comparable financings or agreements (as determined by
the Board of Directors in good faith);
(C) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary on or prior to the date on
which such Restricted Subsidiary was acquired by the Company or any of
its Restricted Subsidiaries (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company or any
of its Restricted Subsidiaries) and outstanding on such date;
(D) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an
agreement referred to in Section 4.05(1) (A), (B) or (C) or this
clause (D) or contained in any amendment to an agreement referred to
in Section 4.05(1)(A), (B) or (C) or this clause (D); provided,
--------
however, that the encumbrances and restrictions with respect to such
-------
Restricted Subsidiary contained in any such refinancing agreement or
amendment are no less favorable to the Securityholders than encum-
-44-
brances and restrictions with respect to such Restricted
Subsidiary contained in such predecessor agreements; and
(E) any encumbrance or restriction pursuant to applicable
law; and
(2) with respect to clause (c) only,
(A) any such encumbrance or restriction consisting of
customary non-assignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of
the lease or the property leased thereunder;
(B) restrictions contained in security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property
subject to such security agreements or mortgages;
(C) restrictions on the transfer of assets subject to any
Lien permitted under this Indenture imposed by the holder of such
Lien; and
(D) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary pending the closing of such
sale or disposition.
SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
--------------------------------------------------
(a) The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless: (1) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Disposition at least equal to the fair market value (including as to the
value of all non-cash consideration), as determined in good faith by the Board
of Directors, of the shares and assets subject to such Asset Disposition; (2) at
least 80% of the consideration thereof received by the Company or such
Restricted Subsidiary is in the form of cash or cash equivalents; and (3) an
amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by the Company (or such Restricted Subsidiary, as the case may be) (A)
first, to the extent the Company elects (or is required by the terms of any
-----
Indebtedness), to prepay, repay, redeem or purchase Indebtedness (other than any
Disqualified Stock) of XX Xxxxxxx or any Wholly Owned Subsidiary (in each case
other than Indebtedness owed to the Company or an Affiliate of the Company)
within fifteen months from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; (B) second, to the extent of the balance
------
of such Net Available Cash after application in accordance with clause (A), to
the extent the Company elects, to acquire Additional Assets within one year from
the later of the date of such Asset Disposition or the receipt of such Net
Available Cash; and (C) third, to the extent of the balance of such Net
-----
Available Cash after application in accordance with clauses (A) and (B), to make
an Offer to the holders of the Securities (and to holders of other
unsubordinated Indebtedness of the Company desig-
-45-
nated by the Company) to purchase Securities (and such other unsubordinated
Indebtedness of the Company) pursuant to and subject to the conditions of
Section 4.06(b); provided, however, that in connection with any prepayment,
-------- -------
repayment or purchase of Indebtedness pursuant to clause (A) or (C) above, the
Company or such Restricted Subsidiary shall permanently retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 4.06, the Company and
the Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section 4.06(a) except to the extent that the
aggregate Net Available Cash from all Asset Dispositions which is not applied in
accordance with this Section 4.06(a) exceeds $10.0 million. Pending application
of Net Available Cash pursuant to this Section 4.06(a), such Net Available Cash
shall be invested in Temporary Cash Investments or applied to temporarily reduce
revolving credit indebtedness.
For the purposes of this Section 4.06(a), the following are deemed to
be cash or cash equivalents: (1) the assumption of Indebtedness of the Company
or any Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability on such Indebtedness in connection with such Asset
Disposition and (2) securities received by the Company or any Restricted
Subsidiary from the transferee that are promptly converted by the Company or
such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase of
Securities (and other unsubordinated Indebtedness of the Company) pursuant to
Section 4.06(a)(3)(C), the Company shall purchase Securities tendered pursuant
to an offer by the Company for the Securities (and such other unsubordinated
Indebtedness of the Company) (the "Offer") at a purchase price of 100% of their
-----
principal amount (or, in the event such other unsubordinated Indebtedness of the
Company was issued with significant original issue discount, 100% of the
accreted value thereof) without premium, plus accrued but unpaid interest (or,
in respect of such other unsubordinated Indebtedness, such lesser price, if any,
as may be provided for by the terms of such unsubordinated Indebtedness of the
Company) in accordance with the procedures (including prorating in the event of
over-subscription) set forth in Section 4.06(c). If the aggregate purchase
price of Securities (and any other unsubordinated Indebtedness of the Company)
tendered pursuant to the Offer exceeds the Net Available Cash allotted to their
purchase, the Company shall select the Securities and other unsubordinated
Indebtedness to be purchased on a pro rata basis but in round denominations.
The Company shall not be required to make an Offer to purchase Securities (and
other unsubordinated Indebtedness of the Company) pursuant to this Section 4.06
if the Net Available Cash available therefor is less than $10.0 million (which
lesser amount shall be carried forward for purposes of determining whether such
an Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in
-46-
Section 4.06(b) in the event the Offer is oversubscribed) in integral multiples
of $1,000 of principal amount, at the applicable purchase price. The notice
shall specify a purchase date not less than 30 days nor more than 60 days after
the date of such notice (the "Purchase Date") and shall contain such information
-------------
concerning the business of the Company which the Company in good faith believes
will enable such Holders to make an informed decision (which at a minimum will
include (A) the most recently filed Annual Report on Form 10-K (including
audited consolidated financial statements) of the Company, the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form
8-K of the Company filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Dispositions otherwise described in the offering
materials (or corresponding successor reports), (B) a description of material
developments in the Company's business subsequent to the date of the latest of
such Reports, and (C) if material, appropriate pro forma financial information)
and all instructions and materials necessary to tender Securities pursuant to
the Offer, together with the information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer
-----
Amount"), including information as to any other unsubordinated Indebtedness
------
included in the Offer, (B) the allocation of the Net Available Cash from the
Asset Dispositions pursuant to which such Offer is being made and (C) the
compliance of such allocation with the provisions of Section 4.06(a) and (b).
On such date, the Company shall also irrevocably deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust) in Temporary Cash Investments, maturing on the last
day prior to the Purchase Date or on the Purchase Date if funds are immediately
available by open of business, an amount equal to the Offer Amount to be held
for payment in accordance with the provisions of this Section. If the Offer
includes other unsubordinated Indebtedness, the deposit described in the
preceding sentence may be made with any other paying agent pursuant to
arrangements satisfactory to the Trustee. Upon the expiration of the period
for which the Offer remains open (the "Offer Period"), the Company shall deliver
------------
to the Trustee for cancellation the Securities or portions thereof which have
been properly tendered to and are to be accepted by the Company. The Trustee
shall, on the Purchase Date, mail or deliver payment (or cause the delivery of
payment) to each tendering Holder in the amount of the purchase price. In the
event that the aggregate purchase price of the Securities delivered by the
Company to the Trustee is less than the Offer Amount applicable to the
Securities, the Trustee shall deliver the excess to the Company immediately
after the expiration of the Offer Period for application in accordance with this
Section 4.06.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Secu-
-47-
rity purchased. Holders whose Securities are purchased only in part shall be
issued new Securities equal in principal amount to the unpurchased portion of
the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the purchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
SECTION 4.07. Limitation on Affiliate Transactions. (a) The
------------------------------------
Company shall not, and shall not permit any Restricted Subsidiary to, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property, employee compensation arrangements or the rendering of
any service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless (1) the terms thereof are no less favorable to
----------------------
the Company or such Restricted Subsidiary than those that could be obtained at
the time of such Affiliate Transaction in arm's-length dealings with a Person
who is not such an Affiliate; (2) if such Affiliate Transaction involves an
amount in excess of $2.5 million, the terms of the Affiliate Transaction are set
forth in writing and a majority of the directors of the Company disinterested
with respect to such Affiliate Transaction have determined in good faith that
the criteria set forth in clause (1) are satisfied and have approved the
relevant Affiliate Transaction as evidenced by a resolution of the Board of
Directors; and (3) if such Affiliate Transaction involves an amount in excess of
$10.0 million, the Board of Directors shall also have received a written opinion
from an Independent Qualified Party to the effect that such Affiliate
Transaction is fair, from a financial standpoint, to the Company and its
Restricted Subsidiaries or is not less favorable to the Company and its
Restricted Subsidiaries than could reasonably be expected to be obtained at the
time in an arm's-length transaction with a Person who was not an Affiliate.
(b) The provisions of Section 4.07(a) shall not prohibit (1) any
Investment (other than a Permitted Investment) or other Restricted Payment, in
each case permitted to be made pursuant to Section 4.04; (2) any issuance of
securities, or other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors; (3) loans or advances to
employees or consultants in the ordinary course of business of the Company or
its Restricted Subsidiaries, but in any event not to exceed $3.0 million in the
aggregate outstanding at any one time; (4) the payment of reasonable fees and
compensation to, or the pro-
-48-
vision of employee benefit arrangements and indemnity for the benefit of,
directors, officers, employees and consultants of the Company and its Restricted
Subsidiaries in the ordinary course of business; (5) any transaction between or
among the Company, any Restricted Subsidiary or joint venture or similar entity
which would constitute an Affiliate Transaction solely because the Company or a
Restricted Subsidiary owns an equity interest in or otherwise controls such
Restricted Subsidiary, joint venture or similar entity; (6) the issuance or sale
of any Capital Stock (other than Disqualified Stock) of the Company; (7) the
existence of, or the performance by the Company or any of its Restricted
Subsidiaries of its obligations under the terms of any stockholders agreement
(including any registration rights agreement or purchase agreement related
thereto) or warrant agreement to which it is a party as of the Issue Date and
any similar agreements which it may enter into thereafter; provided, however,
-------- -------
that the existence of, or the performance by the Company or any of its
Restricted Subsidiaries of obligations under any future amendment to any such
existing agreement or under any similar agreement entered into after the Issue
Date shall only be permitted by this clause (7) to the extent that the terms of
any such amendment or new agreement are not otherwise disadvantageous to the
Holders in any material respect; (8) the payment of fees and other expenses to
be paid by the Company or any of its Subsidiaries in connection with the Merger;
(9) any agreement as in effect on the Issue Date and described in the Offering
Circular or any renewals, extensions or amendments of any such agreement (so
long as such renewals, extensions or amendments are not less favorable to the
Company or the Restricted Subsidiaries)and the transactions evidenced thereby;
and (10) transactions with customers, clients, suppliers or purchasers or
sellers of goods or services in each case in the ordinary course of business and
otherwise in compliance with the terms of the applicable Indenture which are
fair to the Company or its Restricted Subsidiaries, in the reasonable
determination of the Board of Directors of the Company or the senior management
thereof, or are on terms at least as favorable as might reasonably have been
obtained at such time from an unaffiliated party.
SECTION 4.08. Limitation on the Sale or Issuance of Capital Stock of
------------------------------------------------------
Restricted Subsidiaries. The Company (1) shall not, and shall not permit any
-----------------------
Restricted Subsidiary to, sell, lease, transfer or otherwise dispose of any
Capital Stock of any Restricted Subsidiary to any Person (other than to the
Company, XX Xxxxxxx or a Wholly Owned Subsidiary), and (2) shall not permit any
Restricted Subsidiary to issue any of its Capital Stock (other than, if
necessary, shares of its Capital Stock constituting directors' or other legally
required qualifying shares) to any Person (other than the Company, XX Xxxxxxx or
a Wholly Owned Subsidiary) unless (A) immediately after giving effect to such
issuance, sale or other disposition, neither the Company nor any of its
Subsidiaries owns any Capital Stock of such Restricted Subsidiary or (B)
immediately after giving effect to such issuance, sale or other disposition,
such Restricted Subsidiary would no longer constitute a Restricted Subsidiary
and any Investment in such Person (other than in the case of an Exempt
Subsidiary) remaining after giving effect thereto is treated as a new Investment
by the Company and such Investment would have been permitted to be made under
Section 4.04 if made on the date of such issuance, sale or other disposition.
SECTION 4.09. Change of Control. (a) Upon the occurrence of a
-----------------
Change of Control, each Holder shall have the right to require that the Company
purchase such Holder's
-49-
Securities at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), in
accordance with the terms contemplated in Section 4.09(b). In the event that at
the time of such Change of Control the terms of the Credit Agreement prohibit
the Company from making a Change of Control Offer or from purchasing Securities
pursuant thereto, then prior to the mailing of the notice to Holders provided
for in Section 4.09(b) below but in any event within 30 days following any
Change of Control, the Company shall (1) repay in full all indebtedness
outstanding under the Credit Agreement offer to repay in full all such
indebtedness and repay the indebtedness of each lender who has accepted such
offer or (ii) obtain the requisite consent under the Credit Agreement to permit
the repurchase of the Securities as provided for in Section 4.09(b).
(b) Within 30 days following any Change of Control, unless the
Company has exercised its option to redeem all the Securities pursuant to
paragraph 5 of the Securities the Company shall mail a notice to each Holder
with a copy to the Trustee (the "Change of Control Offer") stating:
-----------------------
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof on the
date of purchase plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant record
date to receive interest on the relevant interest payment date);
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical income,
cash flow and capitalization, in each case after giving effect to such
Change of Control);
(3) the purchase date (which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed); and
(4) the instructions, as determined by the Company, consistent with
this Section, that a Holder must follow in order to have its Securities
purchased.
(c) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form duly completed, to the Company
at the address specified in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Security which was delivered
for purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
-50-
(d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer or if the Company has exercised its option to redeem all the
Securities pursuant to paragraph 6 of the Securities.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the purchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue of its compliance
with such securities laws or regulations.
SECTION 4.10. Limitation on Liens. The Company will not create,
-------------------
incur, assume or suffer to exist any Liens of any kind against or upon any
property or assets of the Company or any of its Restricted Subsidiaries whether
owned on the Issue Date or acquired after the Issue Date, or any proceeds
therefrom, in each case, created or acquired to secure Indebtedness of the
Company, unless, except in the case of Liens securing Indebtedness that is
subordinate or junior in right of payment to the Securities which shall not be
permitted, the Securities are equally and ratably secured, except for:
(a) Liens existing as of the Issue Date to the extent and in the
manner such Liens are in effect as of the Issue Date;
(b) Liens securing the Securities and Liens securing Indebtedness
guarantees of Indebtedness under the Credit Agreement;
(c) Liens of the Company or a Restricted Subsidiary of the Company on
assets of any Subsidiary of the Company;
(d) Liens securing Refinancing Indebtedness which is incurred to
Refinance Indebtedness which has been secured by a Lien permitted under
this Indenture and which has been incurred in accordance with the
provisions of this Indenture; provided that such Liens (i) are no less
--------
favorable to the Holders and are no more favorable to the lienholders with
respect to such Liens than the Liens in respect of the Indebtedness being
Refinanced and (ii) do not extend to or cover any property or assets of the
Company or any of its Subsidiaries not securing the Indebtedness so
Refinanced; and
-51-
(e) Permitted Liens.
SECTION 4.11. Conduct of Business. The Company will not, and will
-------------------
not permit its Restricted Subsidiaries to, engage in any business which is not a
Related Business.
SECTION 4.12. Compliance Certificate. The Company shall deliver to
----------------------
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA (S) 314(a)(4).
SECTION 4.13. Payment of Additional Interest. If additional
------------------------------
interest is payable by the Company pursuant to the Registration Rights Agreement
and paragraph 1 of the Securities, the Company shall deliver to the Trustee a
certificate to that effect stating (i) the amount of such additional interest
that is payable, (ii) whether and to what extent such additional interest is to
be in the form of PIK Interest, and (iii) the date on which such interest is
payable. Unless and until the Trustee receives such a certificate, the Trustee
may assume without inquiry that no Registration Default (as defined in the
Registration Rights Agreement) exists and that no additional interest is owed by
the Company. If the Company has paid additional interest directly to the
persons entitled to such interest, the Company shall deliver to the Trustee a
certificate setting forth the particulars of such payment.
SECTION 4.14. Further Instruments and Acts. Upon request of the
----------------------------
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE 5
Merger and Consolidation
------------------------
Following the first day that (a) the ratings assigned to the Notes by
both of the Rating Agencies are Investment Grade Ratings and (b) no Default has
occurred and is continuing under this Indenture (and notwithstanding that the
Company may later cease to have an Investment Grade Rating from either or both
Rating Agencies or default under this Indenture), the Company shall not be
subject to clause (3) of Section 5.01(a).
SECTION 5.01. When Company May Merge or Transfer Assets. The
-----------------------------------------
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, directly or indirectly,
all or substantially all its assets to, any Person, unless:
-52-
(1) the resulting, surviving or transferee Person (the "Successor
---------
Company") shall be a Person organized and existing under the laws of the
-------
United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, all the obligations of the
Company under the Securities and this Indenture;
(2) immediately after giving pro forma effect to such transaction
(and treating any Indebtedness which becomes an obligation of the Successor
Company or any Subsidiary as a result of such transaction as having been
Incurred by the Successor Company or such Subsidiary at the time of such
transaction), no Default shall have occurred and be continuing;
(3) immediately after giving pro forma effect to such transaction,
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.03(a); and
(4) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture;
provided, however, that clause (3) shall not be applicable to (A) a Restricted
-------- -------
Subsidiary consolidating with, merging into or transferring all or part of its
properties and assets to the Company or (B) the Company merging with an
Affiliate of the Company solely for the purpose and with the sole effect of
reincorporating the Company in another jurisdiction.
The Successor Company shall be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, and the predecessor Company, except in the
case of a lease, shall be released from the obligation to pay the principal of
and interest on the Securities.
ARTICLE 6
Defaults and Remedies
---------------------
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
----------------- ----------------
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable and such default continues for a
period of 30 days;
(2) the Company (i) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration of acceleration or otherwise;
-53-
(3) the Company fails to comply with Section 5.01;
(4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10 or 4.11 (other than a failure to purchase
Securities when required under Section 4.06 or 4.09) and such failure
continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in the
Securities or this Indenture (other than those referred to in clause (1),
(2), (3) or (4) above) and such failure continues for 60 days after the
notice specified below;
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $10.0 million, or
its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(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 any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order
or decree remains unstayed and in effect for 60 days; or
-54-
(9) any judgment or decree for the payment of money (other than
judgments which are covered by enforceable insurance policies issued by
solvent carriers) in excess of $10.0 million is entered against the Company
or any Significant Subsidiary, remains outstanding for a period of 60
consecutive days following the entry of such judgment or decree and is not
discharged, waived or the execution thereof stayed within 10 days after the
notice specified below;
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
---------
similar official under any Bankruptcy Law.
A Default under clauses (4), (5) or (9) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount of the
outstanding Securities notify the Company of the Default and the Company does
not cure such Default within the time specified after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
------------
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable; provided, however, that so
-------- -------
long as any Bank Indebtedness remains outstanding, no such acceleration shall be
effective until the earlier of (1) five Business Days after the giving of
written notice to the Company and the administrative agent (or similar agent if
there is no administrative agent) under the Credit Agreement and (2) the day on
which any Bank Indebtedness is accelerated. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs
and is continuing, the principal of and interest on all the Securities shall
ipso facto become and be immediately due and payable without any declaration or
---- -----
other act on the part of the Trustee or any Securityholders. The Holders of a
majority in principal amount of the Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely be-
-55-
cause of acceleration. No such rescission shall affect any subsequent Default or
impair any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority
-----------------------
in principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security (ii) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. Control by Majority. The Holders of a majority in
-------------------
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
-------- -------
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
-------------------
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the Securities
make a written request to the Trustee to pursue the remedy;
-56-
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
------------------------------------
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
--------------------------
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
--------------------------------
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
----------
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of senior indebtedness of the Company as certified
to the Trustee by the Company;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to
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the amounts due and payable on the Securities for principal and interest,
respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
---------------------
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by
Holders of more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to
--------------------------------
the extent it may lawfully do so under applicable law) shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and shall not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
shall suffer and permit the execution of every such power as though no such law
had been enacted.
ARTICLE 7
Trustee
-------
SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
-----------------
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
-58-
(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 shall 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 liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
-----------------
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated
in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it
-59-
takes or omits to take in good faith in reliance on the Officers' Certificate or
Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
-------- -------
misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
----------------------------
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
--------------------
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
------------------
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
-----------------------------
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S)
313(b).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Com-
-60-
pany agrees to notify promptly the Trustee whenever the Securities become listed
on any stock exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to
--------------------------
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at
----------------------
any time by so notifying the Company. The Holders of a majority in principal
amount of the Securities may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly ap-
-61-
point a successor Trustee, or if a vacancy exists in the office of Trustee for
any reason (the Trustee in such event being referred to herein as the retiring
Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets (including the administration of the
trust created by this Indenture) to, another corporation or banking association,
the resulting, surviving or transferee corporation without any further act shall
be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
-----------------------------
all times satisfy the requirements of TIA (S) 310(a). The Trustee (or, in the
case of a subsidiary of a bank holding company, its corporate parent) shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the op-
-------- -------
-62-
eration of TIA (S) 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA (S) 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company.
-------------------------------------------------
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
----------------------------------
SECTION 8.01. Discharge of Liability on Securities; Defeasance.
------------------------------------------------
(a) When (1) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07) for cancellation or
(2) all outstanding Securities have become due and payable, whether at maturity
or on a redemption date as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof and the Company irrevocably deposits with the
Trustee funds sufficient to pay at maturity or upon redemption all outstanding
Securities, including interest thereon to maturity or such redemption date
(other than Securities replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand
of the Company accompanied by an Officers' Certificate and an Opinion of Counsel
and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
-------------------------
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation of Sections
6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(7) and (8), with respect only to Significant Subsidiaries) and the
limitations contained in Section 5.01(a)(3) ("covenant defeasance option"). The
--------------------------
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) or
because of the failure of the Company to comply with Section 5.01(a)(3).
-63-
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. Conditions to Defeasance. The Company may exercise
------------------------
its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations for the payment of principal of and interest
on the Securities to maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel to the
effect that the trust resulting from the deposit does not constitute, or is
qualified as, a regulated investment company under the Investment Company
Act of 1940;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (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 Securityholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders
-64-
will not recognize income, gain or loss for Federal income tax purposes as
a result of such covenant defeasance and will be subject to Federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold
--------------------------
in trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities. Money and securities
so held in trust are not subject to Article 10.
SECTION 8.04. Repayment to Company. The Trustee and the Paying
--------------------
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal or interest that remains unclaimed for two years, and,
thereafter, Securityholders entitled to the money must look to the Company for
payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
------------------------------------
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
-------------
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
-------- -------
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
-65-
ARTICLE 9
Amendments
----------
SECTION 9.01. Without Consent of Holders. The Company and the
--------------------------
Trustee may amend this Indenture, or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
-------- -------
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities or to secure the
Securities;
(5) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company;
(6) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA; or
(7) to make any change that does not adversely affect the rights of
any Securityholder.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company and the Trustee
-----------------------
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount of the Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
-66-
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal amount of or extend the Stated Maturity of
any Security;
(4) reduce the amount payable upon the redemption of any Security or
change the time at which any Security may or shall be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any changes in the ranking or priority of any Security that
would adversely affect the Securityholders; or
(7) make any change in Section 6.04 or 6.07 or the second sentence of
this Section.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
-----------------------------------
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A
---------------------------------------------
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those
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Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
SECTION 9.05. Notation on or Exchange of Securities. If an
-------------------------------------
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign
--------------------------
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. Payment for Consent. Neither the Company nor any
-------------------
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10
Miscellaneous
-------------
SECTION 10.01. Trust Indenture Act Controls. If any provision of
----------------------------
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 10.02. Notices. Any notice or communication shall be in
-------
writing and delivered in person or mailed by first-class mail addressed as
follows:
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if to the Company:
CBRE Holding, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx
Attention: Xxxx Xxxxxx
if to the Trustee:
State Street Bank and Trust Company
of California, N.A.
000 Xxxx 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
(CBRE Holding, Inc.
16% Senior Notes Due July 20, 2011)
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
to the Securityholder at the Securityholder's address as it appears on the
registration books of the Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 10.03. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
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(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
---------------------------------------------
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual 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 individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.06. When Securities Disregarded. In determining whether
---------------------------
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar. The
--------------------------------------------
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
-------------- -------------
Sunday or a day on which commercial banking institutions are authorized or
required by law to close in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 10.09. Governing Law. This Indenture and the Securities
-------------
shall be governed by, and construed in accordance with, the laws of the State of
New York.
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SECTION 10.10. No Recourse Against Others. A director, officer,
--------------------------
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
SECTION 10.11. Successors. All agreements of the Company in this
----------
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any number
------------------
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 10.13. Table of Contents; Headings. The table of contents,
---------------------------
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
-71-
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
CBRE HOLDING, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
By: /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
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RULE 144A/IAI APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
-----------
1.1 Definitions
--- -----------
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means with respect to any transfer or exchange
of interests in a Global Security, the rules and procedures of DTC that apply to
such transfer or exchange.
"Depository" or "DTC" means The Depository Trust Company, its nominees
and their respective successors.
"Exchange Securities" means (1) the 16% Senior Notes Due July 20, 2011
issued pursuant to the Indenture in connection with a Registered Exchange Offer
pursuant to a Registration Rights Agreement and (2) Additional Securities, if
any, issued pursuant to a registration statement filed with the SEC under the
Securities Act.
"Initial Purchaser" means (1) with respect to the Initial Securities
issued on the Issue Date, Credit Suisse First Boston Corporation and (2) with
respect to each issuance of Additional Securities, the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a) (1), (2), (3) or
(7) under the Securities Act.
"Initial Securities" means (1) $65.0 million aggregate principal
amount of 16% Senior Notes Due July 20, 2011 issued on the Issue Date and (2)
Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.
"Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchaser to issue and deliver to
the Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 16% Senior Notes Due July 20,
2011 issued in connection with a Private Exchange.
"Purchase Agreement" means (1) with respect to the Initial Securities
issued on the Issue Date, the Purchase Agreement dated June 29, 2001 between the
Company and the Initial Purchaser, as such agreement has been amended on or
prior to the date hereof, and (2) with respect to each issuance of Additional
Securities (other than Additional Securities issued as PIK Interest), the
purchase agreement or underwriting agreement among the Company and the Persons
purchasing such Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Registration Rights Agreement dated
July 20, 2001 between the Company and the Initial Purchaser, and (2) with
respect to each issuance of Additional Securities (other than Additional
Securities issued as PIK Interest) issued in a transaction exempt from the
registration requirements of the Securities Act, the registration rights
agreement, if any, among the Company and the Persons purchasing such Additional
Securities under the related Purchase Agreement.
"Securities" means the Initial Securities, the Exchange Securities and
the Private Exchange Securities, treated as a single class.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued
by the Company in connection with the offer and sale of Initial Securities or
Private Exchange Securities pursuant to a Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b)hereto.
1.2 Other Definitions
-----------------
Defined
Term in Section
---- ----------
"Agent Members" 2.1(b)
"Global Security" 2.1(a)
"Restricted Global Security" 2.1(a)
"Rule 144A" 2.1(a)
-2-
2. The Securities.
--------------
2.1 (a) Form and Dating. Initial Securities offered and sold to QIBs
---------------
in reliance on Rule 144A under the Securities Act ("Rule 144A") or to
---------
Institutional Accredited Investors, in each case as provided in the Purchase
Agreement, and Private Exchange Securities, as provided in the Registration
Rights Agreement, shall be issued initially in the form of one or more permanent
global Securities in definitive, fully registered form without interest coupons
with the global securities legend and restricted securities legend set forth in
Exhibit 1 hereto (each, a "Restricted Global Security"), which shall be
--------- --------------------------
deposited on behalf of the purchasers of the Initial Securities represented
thereby with the Trustee, at its principal corporate trust office, as custodian
for the Depository (or with such other custodian as the Depository may direct),
and registered in the name of the Depository or a nominee of the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the Global Securities may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee as hereinafter provided. Exchange
Securities shall be issued in global form (with the global securities legend set
forth in Exhibit 1 hereto) or in certificated form at the option of the Holders
---------
thereof from time to time. Exchange Securities issued in global form and
Restricted Global Securities are sometimes referred to in this Appendix as
"Global Securities."
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
---------------------
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members") shall
-------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.
-3-
(c) Certificated Securities. Except as provided in this Section 2.1
-----------------------
or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1)
--------------
on the Issue Date, an aggregate principal amount of $65.0 million 16% Senior
Notes Due July 20, 2011, (2) any Additional Securities (other than Additional
Securities issued as PIK Interest) for an original issue in an aggregate
principal amount specified in the Officers' Certificate of the Company pursuant
to Section 2.13 of the Indenture, (3) Exchange Securities or Private Exchange
Securities for issue only in a Registered Exchange Offer or a Private Exchange,
respectively, pursuant to a Registration Rights Agreement, for a like principal
amount of Initial Securities, and (4) any Additional Securities issued as PIK
Interest in accordance with paragraph 1 of the Security, in each case upon a
written order of the Company signed by one Officer. Such order shall specify the
amount of the Securities to be authenticated and the date on which the original
issue of Securities is to be authenticated and, in the case of any issuance of
Additional Securities (other than Additional Securities issued as PIK Interest)
pursuant to Section 2.13 of the Indenture, shall certify that such issuance is
in compliance with Section 4.03 of the Indenture.
2.3 Transfer and Exchange.
---------------------
(a) Transfer and Exchange of Global Securities. (i) The transfer
------------------------------------------
and exchange of Global Securities or beneficial interests therein shall be
effected through the Depository, in accordance with this Indenture (including
applicable restrictions on transfer set forth herein, if any) and the procedures
of the Depository therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in accordance with
the Depositary's procedures containing information regarding the participant
account of the Depositary to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with such instructions
instruct the Depositary to credit to the account of the Person specified in such
instructions a beneficial interest in the Global Security and to debit the
account of the Person making the transfer the beneficial interest in the Global
Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(iii) In the event that a Restricted Global Security is exchanged for
Securities in certificated registered form pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such Securities,
such Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (in-
-4-
cluding the certification requirements set forth on the reverse of the Initial
Securities intended to ensure that such transfers comply with Rule 144A or are
made to Institutional Accredited Investors, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(iv) In connection with all transfers and exchanges of interests in
Global Securities (other than transfers of interests in a Global Security to
Persons who take delivery thereof in the form of an interest in the same Global
Security), the transferor of such interest must deliver to the DTC (1)
instructions given in accordance with the Applicable Procedures from an Agent
Member or an indirect Agent Member directing DTC to credit or cause to be
credited an interest in the specified transferee Global Security in an amount
equal to the interest to be transferred or exchanged and to debit or cause to be
debited an interest in the specified transferor Global Security also in an
amount equal to the interest to be transferred or exchanged, and (2) a written
order given in accordance with the Applicable Procedures containing information
regarding the Agent Member account to be credited and/or debited with such
increase or decrease. In addition, the principal amount of Securities
represented by such transferor Global Security shall be reduced accordingly and
an endorsement shall be made on such transferor Global Security by the Trustee
or by the Depositary at the direction of the Trustee to reflect such reduction;
and the principal amount of Securities represented by such transferee Global
Security shall be increased accordingly and an endorsement shall be made on such
Global Security by the Trustee or by the Depositary at the direction of the
Trustee to reflect such increase.
(b) Legend.
------
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Restricted Global Securities (and
all Securities issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) THE
-5-
COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(III) TO INVESTORS THAT ARE INSTITUTIONAL "ACCREDITED INVESTORS" (AS
DEFINED IN RULE 501(a) (1), (2), (3) or (7) UNDER THE SECURITIES ACT), (IV)
PURSUANT TO EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Restricted Global
Security) pursuant to Rule 144 under the Securities Act, the Registrar shall
permit the transferee thereof to exchange such Transfer Restricted Security for
a certificated Security that does not bear the legend set forth above and
rescind any restriction on the transfer of such Transfer Restricted Security, if
the transferor thereof certifies in writing to the Registrar that such sale or
transfer was made in reliance on Rule 144 (such certification to be in the form
set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities pursuant to and during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Securities or Private
Exchange Securities, as the case may be, all requirements pertaining to legends
on such Initial Security or such Private Exchange Security will cease to apply,
the requirements requiring any such Initial Security or such Private Exchange
Security issued to certain Holders be issued in global form will cease to apply,
and a certificated Initial Security or Private Exchange Security or an Initial
Security or Private Exchange Security in global form, in each case without
restrictive transfer legends, will be available to the transferee of the Holder
of such Initial Securities or Private Exchange Securities upon exchange of such
transferring Holder's certificated Initial Security or Private Exchange Security
or directions to transfer such Holder's interest in the Global Security, as
applicable.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Securities, all requirements pertaining to such Initial
Securities that Initial Securities issued to certain Holders be issued in global
form will still apply with respect to Holders of such Initial Securities that do
not exchange their Initial Securities, and Exchange Securities in certificated
or global form will be available to Holders that exchange such Initial
Securities in such Registered Exchange Offer.
-6-
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will still
apply with respect to Holders of such Initial Securities that do not exchange
their Initial Securities, and Private Exchange Securities in global form with
the global securities legend and the Restricted Securities Legend set forth in
Exhibit 1 hereto will be available to Holders that exchange such Initial
Securities in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
---------------------------------------------
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
purchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
------------------------------------------------------
Securities.
----------
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any transfer tax, assessments, or similar governmental charge payable in
connection therewith (other than any such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer pursuant to Sections 2.06,
3.06 and 4.09 of the Indenture).
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of any Security for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or redeem
Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of receiving
payment of principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the Company,
the Trustee, the Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
-7-
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be entitled
to the same benefits under this Indenture as the Securities surrendered upon
such transfer or exchange.
(e) No Obligation of the Trustee.
----------------------------
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy of the records of the
Depository or its nominee or of any participant or member thereof, with respect
to any ownership interest in the Securities or with respect to the delivery to
any participant, member, beneficial owner or other Person (other than the
Depository) of any notice (including any notice of redemption) or the payment of
any amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
under the Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depository or its nominee in the case of
a Global Security). The rights of beneficial owners in any Global Security
shall be exercised only through the Depository subject to the applicable rules
and procedures of the Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depository
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
2.4 Certificated Securities.
-----------------------
(a) A Restricted Global Security deposited with the Depository or
with the Trustee as custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Restricted
Global Security or if at any time such Depository ceases to be a "clearing
agency" registered under the Exchange Act and a successor depositary is not
appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Securities under this Indenture.
-8-
(b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount of certificated Initial Securities
of authorized denominations. Any portion of a Restricted Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of $1,000 principal amount and any integral
multiple thereof and registered in such names as the Depository shall direct.
Any certificated Initial Security or Private Exchange Security delivered in
exchange for an interest in the Restricted Global Security shall, except as
otherwise provided by Section 2.3(b), bear the restricted securities legend set
forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Securities.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
-9-
EXHIBIT 1
to
RULE 000X/XXX XXXXXXXX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I)
THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III) TO
INVESTORS THAT ARE INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE
501(a) (1), (2), (3) or (7) UNDER THE SECURITIES ACT), (IV) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF
THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
-2-
CUSIP No. ___________ $
16% Senior Notes Due July 20, 2011
CBRE Holding, Inc., a Delaware corporation, promises to pay to
, or registered assigns, the principal sum of Dollars on July 20,
2011.
Interest Payment Dates: January 20, April 20, July 20 and October 20.
Record Dates: January 5, April 5, July 5 and October 5.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated: July 20, 2001
CBRE HOLDING, INC.
By:______________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
as Trustee, certifies that this is one of the Securities referred to in the
Indenture.
by: __________________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
16% Senior Note Due July 20, 2011
1. Interest
--------
CBRE Holding, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
-------
Security at the rate per annum shown above; provided, however, that if a
-------- -------
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.50% per annum
(increasing by an additional 0.50% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 2.00%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured.
The Company will pay interest quarterly on January 20, April 20, July
20 and October 20 of each year, commencing October 20, 2001; provided, however,
-------- -------
that (i) until the fifth anniversary of the issuance of the Securities, interest
in excess of 12% per annum may, at the option of the Company, be in the form of
PIK Interest and (ii) to the extent XX Xxxxxxx'x ability to pay cash dividends
to the Company is at such time restricted by the terms of the Credit Agreement
in effect on the Issue Date or as thereafter amended, modified or any
replacement facility or Refinancing Indebtedness; provided, however, that the
-------- -------
terms of such Credit Agreement as amended, or modified, or such replacement
facility or Refinancing Indebtedness are no more restrictive with respect to the
payment of cash dividends to the Company than the terms of the Credit Agreement
on the Issue Date, interest on the Securities may, at the option of the Company,
be paid in the form of PIK Interest. Interest on the Securities will accrue
from the most recent date to which interest has been paid or, if no interest has
been paid, from July 20, 2001. 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 Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the January 5, April 5, July 5 and October 5 next preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. Except in the case of interest paid
in the form of PIK Interest, the Company will pay principal and interest in
money of the United States that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company
will make all payments in respect of a certificated Security (including
principal, premium and interest) by mailing a check to the registered address of
each Holder thereof; provided, however, that payments on a certificated Security
-------- -------
will be made by wire transfer to a U.S. dollar account maintained by the payee
with a bank in the United States if such Holder elects payment by wire transfer
by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
--------------------------
Initially, State Street Bank and Trust Company of California, N.A.
(the "Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of July
20, 2001 ("Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
5. Optional Redemption
-------------------
On and after July 20, 2001, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record on
-2-
the relevant record date to receive interest due on the related interest payment
date), if redeemed during the 12-month period commencing on July 20 of the years
set forth below:
Redemption Period Price
-------------------------- -----
2001...................... 116.0%
2002...................... 112.8%
2003...................... 109.6%
2004...................... 106.4%
2005...................... 103.2%
2006 and thereafter....... 100.0%
6. Notice of Redemption
----------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to purchase all or
any part of the Securities of such Holder at a purchase price equal to 101% of
the principal amount thereof on the date of purchase plus accrued and unpaid
interest to the date of repurchase (subject to the right of holders of record on
the relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1.00 principal amount and whole multiples of $1.00 A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
-3-
9. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
10. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities,
including Guaranties, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act or to make any change that does not adversely affect the rights of any
Securityholder.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (iii) failure by the Company to comply
with other agreements in the Indenture or the Securities, in certain cases
subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company or any Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $10.0 million;
-4-
(v) certain events of bankruptcy or insolvency with respect to the Company and
the Significant Subsidiaries; and (vi) certain judgments or decrees for the
payment of money in excess of $10.0 million. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable immediately.
Certain events of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately upon the occurrence
of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
14. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
16. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
17. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
-5-
18. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Holders' Compliance with Registration Rights Agreement.
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
20. Governing Law.
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
CBRE Holding, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
-6-
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
______________________________________________________
(Print or type assignee's name, address and zip code)
______________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature:______________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by
this certificate occurring prior to the expiration of the period referred to in
Rule 144(k) under the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on which such Securities
were owned by the Company or any Affiliate of the Company, the undersigned
confirms that such Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) [_] to the Company; or
(2) [_] pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) [_] to a "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act of 1933) that purchases for its own
account or for the account of a qualified institutional buyer
to whom notice is given that such transfer is being made in
reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933; or
(4) [_] to investors that are institutional "accredited investors" (as
defined in Rule 501(a) (1), (2), (3) or (7) under the
Securities Act of 1933; or
-7-
(5) [_] pursuant to the exemption from registration provided by Rule
144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the name of any
person other than the registered holder thereof; provided, however, that if box
-------- -------
(4) or (5) is checked, the Trustee shall be entitled to require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 under such Act.
________________________
Signature
Signature Guarantee:
________________________
Signature
_____________________________
Signature must be guaranteed
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated: __________________ ______________________________
NOTICE: To be executed by an executive officer
TO BE COMPLETE BY PURCHASER IF (4) ABOVE IS CHECKED
The undersigned represents and warrants that it is an institutional
"accredited investor" (as defined in Rule 501(a) (1), (2), (3) or (7) of
Regulation D under the Securities
-8-
Act) and has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of its investment in the
Securities, and it and any accounts for which it is acting are each able to bear
the economic risk of its or their investment, as the case may be. It is
acquiring the Securities purchased by it for its account or for one or more
accounts (each of which is an institutional "accredited investor") as to each of
which it exercises sole investment discretion.
Dated:__________________ ______________________________
NOTICE: To be executed by an executive officer
-9-
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Principal amount Signature of
Amount of Amount of of this Global authorized
decrease in increase in Security officer of
Principal amount Principal amount following such Trustee or
of this Global of this Global decrease or Securities
Date of Exchange Security Security increase) Custodian
-10-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount: $ .
Date: _______________ Your Signature: _________________________________
(Sign exactly as your name appears on the
other side of this Security.)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
-11-
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
*If the Security is to be issued in global form add the Global
Securities Legend from Exhibit 1 to Appendix A and the attachment from such
Exhibit 1 captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF
INCREASES OR DECREASES IN GLOBAL SECURITY".
**If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from Exhibit 1 to Appendix A and
replace the Assignment Form included in this Exhibit A with the Assignment Form
included in such Exhibit 1.
CUSIP No. _____________ $
16% Senior Notes Due July 20, 2011
CBRE Holding, Inc., a Delaware corporation, promises to pay to ,
or registered assigns, the principal sum of Dollars on July 20, 2011.
Interest Payment Dates: January 20, April 20, July 20 and October 20.
Record Dates: January 5, April 5, July 5 and October 5.
Additional provisions of this Security are set forth on the other side
of this Security.
Dated:
CBRE HOLDING, INC.
By: __________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A. as Trustee, certifies
that this is one of the Securities referred to in the Indenture.
by:_____________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY
OR PRIVATE EXCHANGE SECURITY]
16% Senior Note Due July 20, 2011
1. Interest
--------
CBRE Holding, Inc., a Delaware corporation (such corporation, and its
successors and assigns under the Indenture hereinafter referred to, being herein
called the "Company"), promises to pay interest on the principal amount of this
-------
Security at the rate per annum shown above[; provided, however, that if a
-------- -------
Registration Default (as defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate of 0.50% per annum
(increasing by an additional 0.50% per annum after each consecutive 90-day
period that occurs after the date on which such Registration Default occurs up
to a maximum additional interest rate of 2.00%) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured.]/1/ The Company will pay
interest quarterly on January 20, April 20, July 20 and October 20 of each year,
commencing October 20, 2001; provided, however, that (i) until the fifth
-------- -------
anniversary of the issuance of the Securities, interest in excess of 12% per
annum may, at the option of the Company, be PIK Interest and (ii) to the extent
XX Xxxxxxx'x ability to pay cash dividends to the Company is at such time
restricted by the terms of the Credit Agreement in effect on the Issue Date or
as thereafter amended, modified or any replacement facility or Refinancing
Indebtedness; provided, however, that the terms of such Credit Agreement as
-------- -------
amended, or modified, or such replacement facility or Refinancing Indebtedness
are no more restrictive with respect to the payment of cash dividends to the
Company than the terms of the Credit Agreement on the Issue Date, interest on
the Securities may, at the option of the Company, be paid in the form of PIK
Interest. Interest on the Securities will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from July 20,
2001. 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 Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the January 5, April 5, July 5 and October 5 next preceding the
interest payment date even if Securities are canceled after the record date and
on or before the interest payment date. Holders must surrender Securities to a
Paying Agent to collect principal payments. Except in the case of
________________
/1/ Insert if at the date of issuance of the Exchange Security or Private
Exchange Security (as the case may be) any Registration Default has
occurred with respect to the related Initial Securities during the interest
period in which such date of issuance occurs.
interest paid in the form of PIK Interest, the Company will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. Payments in respect of the
Securities represented by a Global Security (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by The Depository Trust Company. The Company will make all
payments in respect of a certificated Security (including principal, premium and
interest) by mailing a check to the registered address of each Holder thereof;
provided, however, that payments on a certificated Security will be made by wire
-------- -------
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
--------------------------
Initially, State Street Bank and Trust Company of California, N.A.
(the "Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture dated as of July
20, 2001 ("Indenture"), between the Company, and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. (S)(S)
-----
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.
The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the
Company and its subsidiaries to incur additional indebtedness; pay dividends or
distributions on, or redeem or repurchase capital stock; make investments; issue
or sell capital stock of subsidiaries; engage in transactions with affiliates;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of subsidiaries; and consolidate, merge or transfer all or
substantially all of its assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and qualifications.
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5. Optional Redemption
-------------------
On and after July 20, 2006, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
principal amount, on the redemption date) plus accrued interest to the
redemption date (subject to the right of Holders of record on the relevant
record date to receive interest due on the related interest payment date), if
redeemed during the 12-month period commencing on July 20 of the years set forth
below:
Redemption Period Price
----------------- -----
2001...................... 116.0%
2002...................... 112.8%
2003...................... 109.6%
2004...................... 106.4%
2005...................... 103.2%
2006 and thereafter....... 100.0%
6. Notice of Redemption
----------------------
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each Holder of Securities to be redeemed
at his registered address. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole multiples of $1,000.
If money sufficient to pay the redemption price of and accrued interest on all
Securities (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain
other conditions are satisfied, on and after such date interest ceases to accrue
on such Securities (or such portions thereof) called for redemption.
7. Put Provisions
--------------
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to purchase all or
any part of the Securities of such Holder at a purchase price equal to 101% of
the principal amount thereof on the date of purchase plus accrued and unpaid
interest to the date of repurchase (subject to the right of holders of record on
the relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. Denominations; Transfer; Exchange
---------------------------------
The Securities are in registered form without coupons in denominations
of $1.00 principal amount and whole multiples of $1.00. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a
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Security to be redeemed in part, the portion of the Security not to be redeemed)
or any Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
9. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of
it for all purposes.
10. Unclaimed Money
---------------
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
11. Discharge and Defeasance
------------------------
Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.
12. Amendment, Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the Securities. Subject to certain exceptions set forth in the Indenture,
without the consent of any Securityholder, the Company and the Trustee shall be
entitled to amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article 5 of the Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add guarantees with respect to the Securities,
including Guaranties, or to secure the Securities, or to add additional
covenants or surrender rights and powers conferred on the Company, or to comply
with any request of the SEC in connection with qualifying the Indenture under
the Act, or to make any change that does not adversely affect the rights of any
Securityholder.
13. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest on the Securities; (ii) default in payment of principal
on the Securities at maturity, upon redemption pursuant to paragraph 5 of the
Securities, upon acceleration or otherwise, or failure by the Company to redeem
or purchase Securities when required; (iii)
-4-
failure by the Company to comply with other agreements in the Indenture or the
Securities, in certain cases subject to notice and lapse of time; (iv) certain
accelerations (including failure to pay within any grace period after final
maturity) of other Indebtedness of the Company or any Significant Subsidiary if
the amount accelerated (or so unpaid) exceeds $10.0 million; (v) certain events
of bankruptcy or insolvency with respect to the Company and the Significant
Subsidiaries; and (vi) certain judgments or decrees for the payment of money in
excess of $10.0 million. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Securities may
declare all the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being due and payable immediately upon the occurrence of such Events
of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Securities unless it receives indemnity or security satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Securityholders notice of any continuing Default
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
14. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
15. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company
or the Trustee shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
16. Authentication
--------------
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
17. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT
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TEN (=joint tenants with rights of survivorship and not as tenants in common),
CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
18. CUSIP Numbers
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Holders' Compliance with Registration Rights Agreement
------------------------------------------------------
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
20. Governing Law
-------------
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
CBRE Holding, Inc.
000 Xxxxxxxxxx Xxxxxx Xxxxx 000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxx
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________
(Print or type assignee's name, address and zip code)
_____________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
____________________________________________________________
Date: ________________ Your Signature: ____________________
____________________________________________________________
Sign exactly as your name appears on the other side of this Security.
-7-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:
[_]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or of the Indenture, state the amount in
principal amount: $
Date: _______________ Your Signature: _____________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: ______________________________
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
-8-
