Exhibit 4.3
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Jordan Telecommunication Products, Inc.
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SERIES A AND SERIES B
13 1/4% SUBORDINATED PREFERRED STOCK EXCHANGE NOTES DUE 2009
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INDENTURE
DATED AS OF __________, 199_
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FIRST TRUST NATIONAL ASSOCIATION
Trustee
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 DEFINITIONS................................................. 1
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SECTION 1.2 OTHER DEFINITIONS........................................... 22
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SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT........... 22
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SECTION 1.4 RULES OF CONSTRUCTION....................................... 22
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ARTICLE 2
THE SUBORDINATED EXCHANGE NOTES
SECTION 2.1 FORM AND DATING............................................. 23
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SECTION 2.2 EXECUTION AND AUTHENTICATION................................ 24
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SECTION 2.3 REGISTRAR AND PAYING AGENT.................................. 25
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SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST......................... 26
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SECTION 2.5 HOLDER LISTS................................................ 26
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SECTION 2.6 TRANSFER AND EXCHANGE....................................... 27
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SECTION 2.7 REPLACEMENT SUBORDINATED EXCHANGE NOTES..................... 37
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SECTION 2.8 OUTSTANDING SUBORDINATED EXCHANGE NOTES..................... 38
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SECTION 2.9 TREASURY SUBORDINATED EXCHANGE NOTES........................ 38
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SECTION 2.10 TEMPORARY SUBORDINATED EXCHANGE NOTES....................... 39
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SECTION 2.11 CANCELLATION................................................ 39
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SECTION 2.12 DEFAULTED INTEREST.......................................... 40
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SECTION 2.13 RECORD DATE................................................. 40
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SECTION 2.14 CUSIP NUMBER................................................ 40
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ARTICLE 3
OPTIONAL REDEMPTION AND
MANDATORY OFFERS TO PURCHASE
SECTION 3.1 NOTICES TO TRUSTEE.......................................... 41
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SECTION 3.2 SELECTION OF SUBORDINATED EXCHANGE NOTES TO BE REDEEMED
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OR PURCHASED................................................ 42
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SECTION 3.3 NOTICE OF REDEMPTION........................................ 43
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SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.............................. 44
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SECTION 3.5 DEPOSIT OF REDEMPTION PRICE................................. 45
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SECTION 3.6 SUBORDINATED EXCHANGE NOTES REDEEMED IN PART................ 45
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SECTION 3.7 OPTIONAL REDEMPTION PROVISIONS.............................. 46
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SECTION 3.8 MANDATORY PURCHASE PROVISIONS............................... 46
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ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF SUBORDINATED EXCHANGE NOTES...................... 49
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SECTION 4.2 SEC REPORTS................................................. 50
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SECTION 4.3 COMPLIANCE CERTIFICATE...................................... 52
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SECTION 4.4 STAY, EXTENSION AND USURY LAWS.............................. 53
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SECTION 4.5 LIMITATION ON RESTRICTED PAYMENTS........................... 53
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SECTION 4.6 CORPORATE EXISTENCE......................................... 58
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SECTION 4.7 LIMITATION ON TRANSACTIONS WITH AFFILIATES.................. 58
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SECTION 4.8 COMPLIANCE WITH LAWS, TAXES................................. 60
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SECTION 4.9 MAINTENANCE OF OFFICE OR AGENCIES........................... 60
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SECTION 4.10 CHANGE OF CONTROL........................................... 61
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SECTION 4.11 LIMITATION ON ASSET SALES................................... 62
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SECTION 4.12 DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES... 64
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ARTICLE 5
SUCCESSORS
SECTION 5.1 MERGER OR CONSOLIDATION..................................... 66
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SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED........................... 67
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ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT........................................... 67
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SECTION 6.2 ACCELERATION................................................ 70
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SECTION 6.3 OTHER REMEDIES.............................................. 71
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SECTION 6.4 WAIVER OF PAST DEFAULTS..................................... 71
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SECTION 6.5 CONTROL BY MAJORITY......................................... 72
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SECTION 6.6 LIMITATION ON SUITS......................................... 72
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SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT........................ 72
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SECTION 6.8 COLLECTION SUIT BY TRUSTEE.................................. 73
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SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM............................ 73
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SECTION 6.10 PRIORITIES.................................................. 74
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SECTION 6.11 UNDERTAKING FOR COSTS....................................... 74
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ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE........................................... 75
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SECTION 7.2 RIGHTS OF TRUSTEE........................................... 76
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SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE................................ 77
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SECTION 7.4 TRUSTEE'S DISCLAIMER........................................ 77
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SECTION 7.5 NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT......... 78
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SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS............................... 78
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SECTION 7.7 COMPENSATION AND INDEMNITY.................................. 79
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SECTION 7.8 REPLACEMENT OF TRUSTEE...................................... 80
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SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC............................ 81
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SECTION 7.10 ELIGIBILITY; DISQUALIFICATION............................... 81
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SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY....... 82
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ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.1 DISCHARGE OF LIABILITY ON SUBORDINATED EXCHANGE NOTES;
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DEFEASANCE.................................................. 82
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SECTION 8.2 CONDITIONS TO DEFEASANCE.................................... 83
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SECTION 8.3 APPLICATION OF TRUST MONEY.................................. 85
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SECTION 8.4 REPAYMENT TO THE COMPANY.................................... 86
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SECTION 8.5 INDEMNITY FOR GOVERNMENT OBLIGATIONS........................ 86
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SECTION 8.6 REINSTATEMENT............................................... 86
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ARTICLE 9
AMENDMENTS
SECTION 9.1 AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT CONSENT OF
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HOLDERS..................................................... 87
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SECTION 9.2 AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS..... 88
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SECTION 9.3 COMPLIANCE WITH TIA......................................... 89
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SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS........................... 89
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SECTION 9.5 NOTATION ON OR EXCHANGE OF SUBORDINATED EXCHANGE NOTES...... 90
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SECTION 9.6 TRUSTEE PROTECTED........................................... 90
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SECTION 9.7 AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS
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OF SENIOR INDEBTEDNESS...................................... 91
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ARTICLE 10
SUBORDINATION
SECTION 10.1 AGREEMENT TO SUBORDINATE.................................... 91
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SECTION 10.2 LIQUIDATION; DISSOLUTION; BANKRUPTCY........................ 92
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SECTION 10.3 DEFAULT ON SENIOR INDEBTEDNESS.............................. 93
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SECTION 10.4 ACCELERATION OF THE SUBORDINATED EXCHANGE NOTES............. 94
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SECTION 10.5 WHEN DISTRIBUTION MUST BE PAID OVER......................... 94
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SECTION 10.6 NOTICE...................................................... 95
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SECTION 10.7 SUBROGATION................................................. 96
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SECTION 10.8 RELATIVE RIGHTS............................................. 96
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SECTION 10.9 THE COMPANY AND HOLDERS MAY NOT IMPAIR SUBORDINATION........ 97
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SECTION 10.10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.................... 99
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SECTION 10.11 RIGHTS OF TRUSTEE AND PAYING AGENT.......................... 99
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SECTION 10.12 AUTHORIZATION TO EFFECT SUBORDINATION....................... 100
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SECTION 10.13 PAYMENT..................................................... 100
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ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS................................ 101
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SECTION 11.2 NOTICES..................................................... 101
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SECTION 11.3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS................. 102
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SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.......... 102
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SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............... 103
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SECTION 11.6 RULES BY TRUSTEE AND AGENTS................................. 103
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SECTION 11.7 LEGAL HOLIDAYS.............................................. 104
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SECTION 11.8 NO RECOURSE AGAINST OTHERS.................................. 104
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SECTION 11.9 COUNTERPARTS................................................ 104
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SECTION 11.10 VARIABLE PROVISIONS......................................... 104
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SECTION 11.11 GOVERNING LAW............................................... 105
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SECTION 11.12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS............... 105
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SECTION 11.13 SUCCESSORS.................................................. 105
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SECTION 11.14 SEVERABILITY................................................ 105
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SECTION 11.15 TABLE OF CONTENTS, HEADINGS, ETC............................ 105
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SECTION 11.16 THIRD PARTY BENEFICIARIES................................... 105
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EXHIBIT A FORM OF SUBORDINATED EXCHANGE NOTE
EXHIBIT B CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION
OF TRANSFER OF SUBORDINATED EXCHANGE NOTES
EXHIBIT C FORM OF CERTIFICATE TO BE DELIVERED BY INSTITUTIONAL
ACCREDITED INVESTORS
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This Indenture, dated as of ___________, 199_, is between Jordan
Telecommunication Products, Inc., a Delaware corporation (the "Company"), and
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First Trust National Association, as trustee (the "Trustee").
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Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of the Company's 13 1/4% Series A
Subordinated Preferred Stock Exchange Notes due 2009 (the "Series A
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Subordinated Exchange Notes") and the Company's 13 1/4% Series B Subordinated
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Preferred Stock Exchange Notes due 2009 (the "Series B Subordinated Exchange
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Notes" and, together with the Series A Subordinated Exchange Notes, the
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"Subordinated Exchange Notes"):
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1 DEFINITIONS.
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"Affiliate" means any of the following: (i) any Person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with the Company, (ii) any spouse, immediate family member or other
relative who has the same principal residence as any Person described in clause
(i) above, (iii) any trust in which any such Persons described in clause (i) or
(ii) above has a beneficial interest, and (iv) any corporation or other
organization of which any such Persons described above collectively own 50% or
more of the equity of such entity.
"Agent" means any Registrar, Paying Agent or co-registrar.
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"Asset Sale" means the sale, lease, conveyance or other disposition by the
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Company or a Restricted Subsidiary of assets or property whether owned on the
date of original issuance of the Senior Preferred Stock or thereafter acquired,
in a single transaction or in a series of related transactions, that are outside
of the ordinary course of business of the Company or such Restricted Subsidiary;
provided that Asset Sales will not include such sales, leases, conveyances or
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dispositions in connection with (i) the sale or disposition of any Restrict-
ed Investment, (ii) the sale or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business, (iii) Receivables
Financings, (iv) the surrender or waiver of contract rights or the settlement,
release or surrender of contract, tort or other claims of any kind, (v) the
grant of any license of patents, trademarks, registration therefor and other
similar intellectual property, (vi) a transfer of assets by the Company or a
Restricted Subsidiary to any of the Company, a Restricted Subsidiary or a
Non-Restricted Subsidiary, (vii) the designation of a Restricted Subsidiary as
a Non-Restricted Subsidiary pursuant to Section 4.16, other than a Subsidiary
excluded from the definition of Restricted Subsidiary by clause (ii)(B) of such
definition, (viii) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company as permitted under Section 5.1,
or (ix) Restricted Payments permitted by Section 4.5.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state
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law for the relief of debtors.
"Board of Directors" means the Company's board of directors or any
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authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
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"Capital Stock" means any and all shares, interests, participations or
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other equivalents (however designated) of corporate stock, including any
preferred stock.
"Cash Flow" means, for any given period and Person, the sum of, without
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duplication, Consolidated Net Income, plus (a) the portion of Net Income
attributable to the minority interests in its Subsidiaries, to the extent not
included in calculating Consolidated Net Income, plus (b) provision for taxes
based on income or profits to the extent such income or profits were included in
computing Consolidated Net Income, plus (c) Consolidated Interest Expense, to
the extent deducted in computing Consolidated Net Income, plus (d) the
amortization of all intangible assets, to the extent such amortization was
deducted in computing Consolidated Net Income (including, but not limited to,
inventory write-ups, goodwill, debt and
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financing costs, and Incentive Arrangements), plus (e) any non-capitalized
transaction costs incurred in connection with financings, acquisitions or
dispositions (including, but not limited to, financing and refinancing fees,
including those in connection with the Offering and the Company Formation, in
each case, to the extent deducted in computing Consolidated Net Income), plus
(f) all depreciation and all other non-cash charges, to the extent deducted in
computing Consolidated Net Income, plus (g) interest income, to the extent such
income was not included in computing Consolidated Net Income, plus (h) all
dividend payments on preferred stock (whether or not paid in cash) to the extent
deducted in computing Consolidated Net Income, plus (i) any extraordinary or
non-recurring charge or expense arising out of the implementation of SFAS 106 or
SFAS 109 to the extent deducted in computing Consolidated Net Income, plus (j)
to the extent not covered in clause (e) above, fees paid or payable in respect
of the New TJC Management Consulting Agreement to the extent deducted in
computing Consolidated Net Income, plus (k) the net loss of any Person, other
than those of a Restricted Subsidiary, to the extent deducted in computing
Consolidated Net Income, plus (1) net losses in respect of any discontinued
operations as determined in accordance with GAAP, to the extent deducted in
computing Consolidated Net Income; provided, however, that if any such
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calculation includes any period during which an acquisition or sale of a Person
or the incurrence or repayment of Indebtedness occurred, then such calculation
for such period shall be made on a Pro Forma Basis.
"Cash Flow Coverage Ratio" means, for any given period and Person, the
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ratio of: (i) Cash Flow, divided by (ii) the sum of Consolidated Interest
Expense and the amount of all dividend payments on any series of preferred
stock of such Person (except for dividends paid or payable in additional shares
of Capital Stock (other than Disqualified Stock)), in each case, without
duplication; provided, however, that if any such calculation includes any period
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during which an acquisition or sale of a Person or the incurrence or repayment
of Indebtedness occurred, then such calculation for such period shall be made on
a Pro Forma Basis.
"Change of Control" means the occurrence of any of the following: (i) any
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"person" or "group" (as such terms
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are used in Sections 13(d) and 14(d) of the Exchange Act), excluding the Jordan
Stockholders, is or becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Stock of
the Company; or (ii) the Company consolidates with, or merges with or into,
another Person or sells, assigns, conveys, transfers, leases or otherwise
disposes of all or substantially all of its assets to any Person, or any Person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock of the Company
is converted into or exchanged for cash, securities or other property, other
than any such transaction where (A) the outstanding Voting Stock of the Company
is converted into or exchanged for (1) Voting Stock (other than Disqualified
Stock) of the surviving or transferee corporation or (2) cash, securities and
other property in an amount which could be paid by the Company as a Restricted
Payment under the Indenture and (B) immediately after such transaction no
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act), excluding the Jordan Stockholders, is the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all securities that such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the total Voting Stock of the surviving or transferee corporation; or (iii)
during any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company was approved by a vote of a majority
of the directors then still in office who are entitled to vote to elect such new
director and were either directors at the beginning of such period or Persons
whose election as directors or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then in office.
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"Claim" means any and all rights to payment under or in respect of any
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Subordinated Exchange Note or this Indenture or any related agreements or
arrangements, all rights, remedies, demands, causes of action and claims of
every type and description at any time held or asserted by, or arising in favor
of, any Holder against the Company or any of its Subsidiaries or any Affiliate,
or any of their assets, on account of any breach of any promise, obligation,
agreement, indemnity, representation, warranty or covenant in a Subordinated
Exchange Note or this Indenture or any related agreements or arrangements or in
any manner arising out of, or relating to, the offer, sale or purchase of a
Subordinated Exchange Note or the transactions contemplated by this Indenture or
by related agreements or the performance or nonperformance or the payment or
nonpayment thereof, whether based on contract, tort, duty imposed by law or any
other theory, legal or equitable and whether for rescission, indemnification,
contribution or damages (including without limitation, (a) any claim substituted
for, or equivalent to, any of the foregoing, and (b) any judgment with respect
to any of the foregoing).
"Commission" means the Securities and Exchange Commission.
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"Company" means Jordan Telecommunication Products, Inc., a Delaware
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corporation.
"Company Formation" means the formation of the Company by the Company's
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management and stockholders of Jordan Industries, Inc. and certain of their
affiliates in connection with an overall recapitalization and refinancing of
Jordan Industries, Inc.
"Consolidated Interest Expense" means, for any given period and Person, the
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aggregate of the interest expense in respect of all Indebtedness of such Person
and its Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP (including amortization of original issue discount on any
such Indebtedness, all non-cash interest payments, the interest portion of any
deferred payment obligation and the interest component of capital lease
obligations, but excluding amortization of deferred financing fees if such
amortization would otherwise be included in interest expense); provided,
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however, that for the purpose of the Cash Flow Cover-
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age Ratio, Consolidated Interest Expense shall be calculated on a Pro Forma
Basis; provided further, that any premiums, fees and expenses (including the
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amortization thereof) payable in connection with the Offering and the Company
Formation and the application of the net proceeds therefrom or any other
refinancing of Indebtedness will be excluded.
"Consolidated Net Income" means, for any given period and Person, the
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aggregate of the Net Income of such Person and its Subsidiaries for such period,
on a consolidated basis, determined in accordance with GAAP; provided, however,
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that: (i) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded, and (ii) Consolidated Net Income of any Person will not include,
without duplication, any deduction for: (A) any increased amortization or
depreciation resulting from the write-up of assets pursuant to Accounting
Principles Board Opinion Mos. 16 and 17, as amended or supplemented from time to
time, (B) the amortization of all intangible assets (including amortization
attributable to inventory write-ups, goodwill, debt and financing costs, and
Incentive Arrangements), (C) any non-capitalized transaction costs incurred in
connection with financings, acquisitions or divestitures (including, but not
limited to, financing and refinancing fees), (D) any extraordinary or
nonrecurring charges relating to any premium or penalty paid, write-off of
deferred financing costs, or other financial recapitalization charges in
connection with redeeming or retiring any Indebtedness prior to its stated
maturity, and (E) any Restructuring Charges; provided, however, that for
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purposes of determining the Cash Flow Coverage Ratio, Consolidated Net Income
shall be calculated on a Pro Forma Basis.
"Consolidated Net Worth" with respect to any Person means, as of any date,
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the consolidated equity of the common stockholders of such Person (excluding the
accumulated foreign currency translation adjustment), all determined on a
consolidated basis in accordance with GAAP, but without any reduction in respect
of the payment of dividends on any series of such Person's preferred stock if
such dividends are paid in additional shares of Capital Stock (other than
Disqualified Stock); provided, however, that Consolidated Net Worth shall also
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include, without duplication: (a) the amortization of all write-
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ups of inventory, (b) the amortization of all intangible assets (including
amortization of goodwill, debt and financing costs, and Incentive Arrangements),
(c) any non-capitalized transaction costs incurred in connection with
financings, acquisitions or divestitures (including, but not limited to,
financing and refinancing fees), (d) any increased amortization or depreciation
resulting from the write-up of assets pursuant to Accounting Principles Board
Opinion Nos. 16 and 17, as amended and supplemented from time to time, (e) any
extraordinary or nonrecurring charges or expenses relating to any premium or
penalty paid, write-off of deferred financing costs, or other financial
recapitalization charges incurred in connection with redeeming or retiring any
Indebtedness prior to its stated maturity, (f) any Restructuring Charges, and
(g) any extraordinary or non-recurring charge arising out of the implementation
of SFAS 106 or SFAS 109; provided, however, that in determining Consolidated
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Net Worth for purposes of Section 5.1, Consolidated Net Worth shall be
calculated on a Pro Forma Basis.
"Credit Agent" means the agent under the New Credit Agreement, as the case
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may be, or such other Person as may be designated as such by the Company from
time to time by notifying the Trustee.
"Default" means any event that is, or after notice or passage of time or
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both would be, an Event of Default.
"Definitive Subordinated Exchange Notes" means Subordinated Exchange Notes
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that are in the form of Exhibit A attached hereto (but without including the
text referred to in footnotes 1 and 2 thereto).
"Depositary" means, with respect to the Subordinated Exchange Notes
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issuable or issued in whole or in part in global form, the Person specified in
Section 2.3 hereof as the Depositary with respect to the Subordinated Exchange
Notes, until a successor shall have been appointed and become such pursuant to
Section 2.6 of this Indenture, and, thereafter, "Depositary" shall mean or
include such successor.
"Designated Senior Indebtedness" means (i) Indebtedness evidenced by (A)
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the Senior Notes and the Discount Notes and (B) the New Credit Agreement if such
Indebtedness constitutes Senior Indebtedness, irrespective of
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amount, and (ii) any other Senior Indebtedness issued under a credit agreement
or other credit facility (x) in an aggregate outstanding principal amount of at
least $50,000,000 (or, in the case of any revolving credit agreement or other
committed credit facility, having an aggregate commitment of at least
$50,000,000) and (y) that is specifically designated by the Company in the
instrument creating or evidencing such Senior Indebtedness as "Designated Senior
Indebtedness."
"Discount Notes" means the 11 3/4% Senior Discount Notes due 2007 of the
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Company.
"Discount Notes Indenture" means the indenture, dated July 25, 1997,
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between the Company and First Trust National Association, as trustee, relating
to the Discount Notes, as such indenture may be amended or supplemented from
time to time.
"Disqualified Stock" means any Capital Stock that by its terms (or by the
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terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part on, or prior to, the
maturity date of the Subordinated Exchange Notes.
"Dura-Line Agreement" means the Preferred Stock Agreement among Dura-Line
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Corporation and certain other persons, as in effect on the date of the original
issuance of the Senior Notes and the Discount Notes.
"Dura-Line Preferred Stock" means the 187.5 shares outstanding of Dura-Line
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Corporation's 7% cumulative preferred stock with an aggregate liquidation
preference of $1.9 million issued to former common stockholders of Dura-Line
Corporation.
"Equity Interests" means Capital Stock or partnership interests or
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warrants, options or other rights to acquire Capital Stock or partnership
interests (but excluding (i) any debt security that is convertible into or
exchangeable for, Capital Stock or partnership interests, and (ii) any other
Indebtedness or Obligation) provided, however, that Equity Interests will not
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include
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any Incentive Arrangements or obligations or payments thereunder.
"Equity Offering" means a public or private offering by the Company and/or
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its Subsidiaries for cash of Capital Stock or other Equity Interests and all
warrants, options or other rights to acquire Capital Stock, other than (i) an
offering of Disqualified Stock or (ii) Incentive Arrangements or obligations or
payments thereunder.
"Exchange Notes" means the Series A Subordinated Exchange Notes and the
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Series B Subordinated Exchange Notes.
"Exchange Offer" means the offer by the Company to Holders to exchange
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Series B Subordinated Exchange Notes for Series A Subordinated Exchange Notes.
"GAAP" means generally accepted accounting principles, consistently
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applied, as of the date of original issuance of the Subordinated Exchange Notes.
All financial and accounting determinations and calculations under the
Indenture will be made in accordance with GAAP.
"Global Subordinated Exchange Note" means a Subordinated Exchange Note that
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contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 2 to the form of the Subordinated Exchange Note attached
hereto as Exhibit A.
"Hedging Obligations" means, with respect to any Person, the Obligations of
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such Persons under (i) inter est rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (ii) foreign exchange contracts,
currency swap agreements or similar agreements, and (iii) other agreements or
arrangements designed to protect such Person against fluctuations, or otherwise
to establish financial xxxxxx in respect of exchange rates, currency rates or
interest rates.
"Holder" means a Person in whose name a Subordinated Exchange Note is
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registered.
"Incentive Arrangements" means any earn-out agreements, stock appreciation
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rights, "phantom" stock plans, employment agreements, non-competition
agreements, subscription and stockholders agreements and other incentive
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and bonus plans and similar arrangements made in connection with acquisitions
of Persons or businesses by the Company or any Restricted Subsidiary or the
retention of executives, officers or employees by the Company or any Restricted
Subsidiary.
"Indebtedness" means, with respect to any Person, any indebtedness, whether
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or not contingent, in respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or representing the balance deferred and unpaid
of the purchase price of any property (including pursuant to capital leases),
except any such balance that constitutes an accrued expense or a trade payable,
and any Hedging Obligations, if and to the extent such indebtedness (other than
a Hedging Obligation) would appear as a liability upon a balance sheet of such
Person prepared on a consolidated basis in accordance with GAAP, and also
includes, to the extent not otherwise included, the guarantee of items which
would be included within this definition; provided, however, that "Indebtedness"
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will not include any Incentive Arrangements or obligations or payments
thereunder.
"Indenture" means this Indenture, as amended or supplemented from time to
---------
time.
"Insolvency or Liquidation Proceeding" means (i) any insolvency or
------------------------------------
bankruptcy or similar case or proceeding, or any reorganization, receivership,
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, or (ii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company.
"Investment" means any capital contribution to, or other debt or equity
----------
investment in, any Person.
"issue" means create, issue, assume, guarantee, incur or otherwise become
-----
directly or indirectly liable for any Indebtedness or Capital Stock, as
applicable; 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 issued
by such Restricted Subsidiary at the time it becomes a
10
Restricted Subsidiary. For this definition, the terms "issuing," "issuer,"
"issuance" and "issued" have meanings correlative to the foregoing.
"Jordan Stockholders" means Xxxx X. Xxxxxx, XX, and/or his heirs, executors
-------------------
and administrators, The Xxxx X. Xxxxxx, XX Revocable Trust, The Jordan Family
Trust and/or any other trust established by Xxxx X. Xxxxxx, XX whose
beneficiaries are Xxxx X. Xxxxxx, XX and/or his lineal descendants or other
relatives, Jordan Industries, Inc., The Jordan Company and Jordan/Zalaznick
Capital Corporation and their respective affiliates, principals, partners and
employees, family members of any of the foregoing and trusts for the benefit of
any of the fore going, including, without limitation, MCIT PLC and Leucadia
National Corporation and their respective Subsidiaries.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
-------------
institutions in the City of New York, the city in which the principal corporate
trust office of the Trustee is located or at a place of payment are authorized
by law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
----
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell and any filing of or
agreement to give any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing pursuant to
------------------
Section 4 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income (loss) of
----------
such Person, determined in accordance with GAAP, excluding, however, any gain
or loss, together with any related provision for taxes, realized
11
in connection with any Asset Sale (including, without limitation, dispositions
pursuant to sale and leaseback transactions).
"Net Proceeds" means, with respect to any Asset Sale, the aggregate amount
------------
of cash proceeds (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received as disbursements or withdrawals from any escrow or similar
account established in connection with any such Asset Sale, but, in either such
case, only as and when so received) received by the Company or any of its
Restrict ed Subsidiaries in respect of such Asset Sale, net of: (i) the cash
expenses of such Asset Sale (including, without limitation, the payment of
principal, premium, if any, and interest on, Indebtedness required to be paid as
a result of such Asset Sale (other than the Subordinated Exchange Notes),
accounting, management, advisory and in vestment banking fees and sales
commissions), (ii) taxes paid or payable as a result thereof, (iii) any portion
of cash proceeds that the Company determines in good faith should be reserved
for post-closing adjustments, it being understood and agreed that on the day
that all such post-closing adjustments have been determined, the amount (if any)
by which the reserved amount in respect of such Asset Sale exceeds the actual
postclosing adjustments payable by the Company or any of its Restricted Subsid-
iaries shall constitute Net Proceeds on such date, (iv) any relocation expenses
and pension, severance and shut down costs incurred as a result thereof, and (v)
any deduction or appropriate amounts to be provided by the Company or any of its
Restricted Subsidiaries as a re serve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by the Company or such Restricted Subsidiary after such sale or other
disposition thereof, including, without limitation, pension and other post-
employment benefit liabilities and liabilities related to environ mental matters
or against any indemnification obligations associated with such transaction.
"New Credit Agreement" means the credit agreement, dated the date hereof,
--------------------
entered into by certain of the Company's Restricted Subsidiaries and certain
other subsidiaries and the lenders party thereto in their capaci-
12
ties as lenders thereunder and BankBoston N.A., as agent, together with all loan
documents and instruments thereunder (including, without limitation, any
guarantee agreements, including the guarantee by the Company, and security
documents), in each case as such agreements may be amended (including any
amendment and restatement there of), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including, without limitation, increasing
the amount of available borrowings thereunder, and all Obligations with respect
thereto, in each case, to the extent permitted by Section 4.7 of each of the
Senior Notes Indenture and the Discount Notes Indenture, or adding Subsidiaries
of the Company as additional borrowers or guarantors thereunder) all or any
portion of the Indebtedness under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"New Subsidiary Advisory Agreement" means the advisory agreement, dated
---------------------------------
July 25, 1997, between the Company and each of its Subsidiaries and Jordan
Industries, as in effect on the date of the original issuance of the Senior
Notes and Discount Notes.
"New Subsidiary Consulting Agreement" means the management consulting
-----------------------------------
agreement, dated July 25, 1997, between the Company and each of its
Subsidiaries and Jordan Industries, as in effect on the date of the original
issuance of the Senior Notes and Discount Notes.
"New TJC Management Consulting Agreement" means the Management Consulting
---------------------------------------
Agreement, dated as of July 25, 1997, between the Company and TJC Management
Corporation, as in effect on the date of original issuance of the Senior Notes
and Discount Notes.
"Non-Restricted Subsidiary" means any Subsidiary of the Company, other than
-------------------------
a Restricted Subsidiary.
"Obligations" means, with respect to any Indebtedness, all principal,
-----------
interest, premium, penalties, fees, indemnities, expenses (including legal fees
and expenses), reimbursement obligations and other liabilities payable to the
holder of such Indebtedness under the documentation governing such Indebtedness,
and any other
13
claims of such holder arising in respect of such Indebtedness.
"Offering" means the offer and sale of, among other securities, the Senior
--------
Notes and Discount Notes as contemplated by the Offering Circular.
"Offering Circular" means the Offering Circular, dated July 21, 1997,
-----------------
relating to the Company's offering and placement of, among other securities, the
Senior Notes and Discount Notes.
"Officer" means, with respect to any Person, the Chairman of the Board, the
-------
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
---------------------
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 10.4
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
------------------
acceptable to the Trustee, that meets the requirements of Section 10.5 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Person" means any individual, corporation, partnership, joint venture,
------
limited liability company, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivi-
sion thereof.
"Post-Petition Interest" means, with respect to any Senior Indebtedness,
----------------------
all interest accrued or accruing on such Senior Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding in accordance with and
at the contract rate (including, without limitation, any rate applicable upon
default) specified in the agreement or instrument creating, evidencing or
governing such Senior Indebtedness, whether or not, pursuant to applicable law
or otherwise, the claim for such interest is
14
allowed as a claim in such Insolvency or Liquidation Proceeding.
"Pro Forma Basis" means, for purposes of determining Consolidated Net
---------------
Income, Cash Flow and Consolidated Interest Expense in connection with the Cash
Flow Cover age Ratio (including in connection with Section 4.5, the incurrence
of Indebtedness pursuant to Section 4.7(a) of each of the Senior Notes Indenture
and the Discount Notes Indenture and Consolidated Net Worth for purposes of
Section 5.1), giving pro forma effect to (x) any acquisition or sale of a
Person, business or asset, related incurrence, repayment or refinancing of
Indebtedness or other related transactions, including any related re structuring
charges in respect of restructurings, consolidations, compensation or headcount
reductions or other cost savings which would otherwise be accounted for as an
adjustment permitted by Regulation S-X under the Securities Act or on a pro
forma basis under GAAP, or (y) any incurrence, repayment or refinancing of any
Indebtedness and the application of the proceeds therefrom, in each case, as if
such acquisition or sale and related transactions, restructurings,
consolidations, cost savings, reductions, incurrence, repayment or refinancing
were realized on the first day of the relevant period permit xxx by Regulation
S-X under, the Securities Act or on a pro forma basis under GAAP. Furthermore,
in calculating the Cash Flow Coverage Ratio, (1) interest on outstanding
Indebtedness determined on a fluctuating basis as of the determination date and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness in effect on the determination date; (2) if interest on any
Indebtedness actually incurred on the determination date may optionally be
determined at an interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate in
effect on the determination date will be deemed to have been in effect during
the relevant period; and (3) notwithstanding clause (1) above, interest on
Indebtedness determined on a fluctuating basis, to the extent such interest is
covered by agreements relating to interest rate swaps or similar interest rate
protection Hedging Obligations, shall be deemed to accrue at the rate per annum
resulting after giving effect to the operation of such agreements.
15
"Properties Services Agreement" means the services agreement, dated July
-----------------------------
25, 1997, between the Company and Jordan Industries, Inc., as in effect on the
date of original issuance of the Senior Notes and the Discount Notes.
"Purchaser" means Xxxxxxxxx & Company, Inc.
---------
"Receivables" means, with respect to any Person, all of the following
-----------
property and interests in property of such Person, whether now existing or
existing in the future or hereafter acquired or arising: (i) accounts, (ii)
accounts receivable (including, without limitation, all rights to payment
created by or arising from sales of goods, leases of goods or leased or the
rendition of services rendered no matter how evidenced, whether or not earned by
performance), (iii) all unpaid seller's or lessor's rights (including, without
limitation, recession, replevin, reclamation and stoppage in transit, relating
to any of the foregoing or arising therefrom), (iv) all rights to any goods or
merchandise represented by any of the foregoing (including, without limitation,
returned or repossessed goods), (v) all reserves and credit balances with
respect to any such accounts receivable or account debtors, (vi) all letters of
credit, security or guarantees for any of the foregoing, (vii) all insurance
policies or reports relating to any of the foregoing, (viii) all collection or
deposit accounts relating to any of the foregoing, (ix) all proceeds of any of
the foregoing, and (x) all books and records relating to any of the foregoing.
"Receivables Financing" means (i) the sale or other disposition of
---------------------
Receivables arising in the ordinary course of business, or (ii) the sale or
other disposition of Receivables arising in the ordinary course of business to a
Receivables Subsidiary followed by a financing transaction in connection with
such sale or disposition of such Receivables.
"Receivables Subsidiary" means a Subsidiary of the Company that is
----------------------
exclusively engaged in Receivables Financings and activities reasonably related
thereto.
"Refinancing Indebtedness" means (i) Indebtedness of the Company and its
------------------------
Restricted Subsidiaries issued or given in exchange for, or the proceeds of
which are used
16
to, extend, refinance, renew, replace, substitute or refund any Indebtedness
permitted under this Indenture or any Indebtedness issued to so extend,
refinance, renew, replace, substitute or refund such Indebtedness, (ii) any
refinancings of Indebtedness issued under the New Credit Agreement, and (iii)
any additional Indebtedness issued to pay premiums and fees in connection with
clauses (i) and (ii).
"Registration Rights Agreement" means the Registration Rights Agreement,
-----------------------------
dated as of July 25, 1997, by and among the Company and the Purchaser, with
respect to the 13 1/4% Senior Exchangeable Preferred Stock, with respect to
which agreement the Holders are third party beneficiaries.
"Representative" means with respect to any Senior Indebtedness, the
--------------
indenture trustee or other trustee, agent or other representative(s), if any, of
holders of such Senior Indebtedness.
"Restricted Investment" means any Investment in any Person, provided that
--------------------- --------
Restricted Investments will not include: (i) Investments in marketable
securities and other negotiable instruments to the extent permitted by Section
4.5(b)(ii) of this Indenture; (ii) any Incentive Arrangements; (iii) Investments
by any Restricted Subsidiary in the Company; or (iv) Investments by the Company
or any Restricted Subsidiary in any Restricted Subsidiary (provided that any
--------
Investment in a Restricted Subsidiary was made for fair market value (as
determined by the Board of Directors in good faith). The amount of any
Restricted Investment shall be the amount of cash and the fair market value at
the time of transfer of all other property (as determined by the Board of
Directors in good faith) initially invested or paid for such Restricted
Investment, plus all additions thereto, without any adjustments for increases or
decreases in value of, or write-ups, write-downs or write-offs with respect to,
such Restricted Investment.
"Restricted Subsidiary" means: (i) any Subsidiary of the Company existing
---------------------
on the date of original issuance of the Senior Notes, and (ii) any other
Subsidiary of the Company formed, acquired or existing after the date of
original issuance of the Senior Notes and the Discount Notes that is designated
as a "Restricted Subsidiary" by
17
the Company pursuant to a resolution approved by a majority of the Board of
Directors, provided, however, that the term "Restricted Subsidiary" shall not
-------- -------
include (A) any Restricted Subsidiary of the Company that has been redesignated
by the Company pursuant to a resolution approved by a majority of the Board of
Directors as a Non-Restricted Subsidiary in accordance with Section 4.12 unless
such Subsidiary shall have subsequently been redesignated a Restricted
Subsidiary or (B) any Restricted Subsidiary of the Company that is organized
under the laws of a foreign jurisdiction and whose stock or owner ship interests
are sold or transferred to a Non-Restricted Subsidiary of the Company pursuant
to one or more transactions that comply with Sections 4.7 and 4.11 which is, at
or after the time of such sale or transfer, by a resolution approved by a
majority of the Board of Directors, designated a Non-Restricted Subsidiary.
"Restructuring Charges" means any charges or expenses in respect of
---------------------
restructuring or consolidating any business, operations or facilities, any
compensation or headcount reduction, or any other cost savings, of any Persons
or businesses either alone or together with the Company or any Restricted
Subsidiary, as permitted by GAAP or Regulation S-X under the Securities Act.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended.
--------------
"Senior Indebtedness" means: (i) all Obligations (including any interest
-------------------
accruing subsequent to the filing of a petition of bankruptcy at the rate
provided for in the documentation with respect thereto, whether or not such
interest is an allowed claim under applicable law) on any Indebtedness of the
Company, whether outstanding on the date of issuance of the Senior Notes and the
Discount Notes or thereafter created, incurred or assumed, of the following
types: (A) all Indebtedness of the Company (including without limitation the
Senior Notes and the Discount Notes) for money borrowed, and (B) all
Indebtedness evidenced by notes, debentures, bonds or other similar instruments
for the payment of which the Company is responsible or liable; (ii) all
capitalized lease obligations of the Company; (iii) all Obligations of the
Company: (A) for the reimbursement of any obligor
18
on any letter of credit, banker's acceptance or similar credit transaction, (B)
constituting Hedging Obligations, or (C) issued as the deferred purchase price
of property and all conditional sale Obligations of the Company and all
Obligations of the Company under any title retention agreement; (iv) all
guarantees of the Company with respect to Obligations of other Persons of the
type referred to in clauses (ii) and (iii) and with respect to the payment of
dividends of other Persons; and (v) all Obligations of the Company consisting of
modifications, renewals, extensions, replacements and refundings of any
Obligations described in clauses (i), (ii), (iii) or (iv) unless, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is expressly provided that such Obligations are subordinated or
junior in right of payment to the Senior Notes and the Discount Notes; provided,
however, that Senior Indebtedness shall not be deemed to include: (1) any
Obligation of the Company to any Subsidiary, (2) any liability for federal,
state, local or other taxes owed or owing by the Company, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness, guarantee or Obligation of the Company that
is contractually subordinated or junior in any respect to any other In-
debtedness, guarantee or Obligation of the Company, or (5) any Indebtedness to
the extent the same is incurred in violation of the Indenture. Senior
Indebtedness shall include all Obligations in respect of the Senior Notes and
the Discount Notes and the Senior Notes Indenture and the Discount Notes
Indenture.
"Senior Notes" means the 9% Senior Notes due 2007 of the Company.
------------
"Senior Notes Indenture" means the indenture, dated July 25, 1997, between
----------------------
the Company and First Trust National Association, as trustee, relating to the
Senior Notes, as such indenture may be amended or supplemented from time to
time.
"Senior Preferred Stock" means the 13 1/4% Series A and Series B Senior
----------------------
Exchangeable Preferred Stock due 2009 of the Company.
19
"Series A Notes" means the Company's 13 1/4% Series A Subordinated
--------------
Preferred Stock Exchange Notes due 2009.
"Series B Notes" means the Company's 13 1/4% Series B Subordinated
--------------
Preferred Stock Exchange Notes due 2009.
"SFAS 106" means Statement of Financial Accounting Standards No. 106.
--------
"SFAS 109" means Statement of Financial Accounting Standards No. 109.
--------
"Significant Subsidiary" means (i) any Restricted Subsidiary of the Company
----------------------
that would be a "significant subsidiary" as defined in clause (2) of the
definition of such term in Rule 1-02 of Regulation S-X under the Securities Act
and the Exchange Act, and (ii) any other Restricted Subsidiary of the Company
that is material to the business, earnings, prospects, assets or condition,
financial or otherwise, of the Company and its Restricted Subsidiaries, taken as
a whole.
"Subordinated Indebtedness" means all Obligations of the type referred to
-------------------------
in clauses (i) through (v) of the definition of Senior Indebtedness, if the
instrument creating or evidencing the same, or pursuant to which the same is
outstanding, designates such Obligations as subordinated or junior in right of
payment to Senior Indebtedness.
"Stated Maturity" means with respect to any installment of interest or
---------------
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" of any Person means any entity of which the Equity Interests
----------
entitled to cast at least a majority of the votes that may be cast by all Equity
Interests having ordinary voting power for the election of directors or other
governing body of such entity are owned by such Person (regardless of whether
such Equity Interests are owned directly by such Person or through one or more
Subsidiaries).
20
"Tax Sharing Agreement" means the tax sharing agreement between the Company
---------------------
and each of its Subsidiaries and Jordan Industries, Inc. and each of the other
direct and indirect Subsidiaries of Jordan Industries, Inc. that are
consolidated with Jordan Industries, Inc. for Federal income tax purposes, as in
effect on the date of original issuance of the Senior Notes and the Discount
Notes.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-
---
77bbbb), as amended, as in effect on the date of original issuance of the Senior
Notes and the Discount Notes.
"Transition Agreement" means the transition agreement, dated as of July 25,
--------------------
1997, between the Company and Jordan Industries, as in effect on the date of
original issuance of the Senior Notes and the Discount Notes.
"Transfer Restricted Subordinated Exchange Notes" means securities that
-----------------------------------------------
bear or are required to bear the legend set forth in Section 2.6.
"Trustee" means First Trust National Association until a successor replaces
-------
it in accordance with the applicable provisions of this Indenture, and
thereafter means the successor.
"Trust Officer" means the chairman of the board, the president or any other
-------------
officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"U.S. Government Obligations" means direct obligations of the United States
---------------------------
of America for the payment of which the full faith and credit of the United
States of America is pledged, provided that no U.S. Government Obligation shall
--------
be callable at the issuer's option.
"Voting Stock" means any class or classes of Capital Stock pursuant to
------------
which the holders thereof have the general voting power under ordinary
circumstances to elect the board of directors.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
---------------------------------
at any date, the number of years obtained by dividing (i) the then outstanding
principal amount of such Indebtedness into (ii) the sum
21
of the product(s) obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) which will elapse
between such date and the making of such payment.
SECTION 2 OTHER DEFINITIONS.
------------------
Defined in
Term Section
"Affiliate Transaction............................................. 4.8
"Asset Sale Disposition Date"...................................... 4.11
"Asset Sale Trigger Date".......................................... 4.11
"covenant defeasance option"....................................... 8.1
"Disposition"...................................................... 5.1
"DTC".............................................................. 2.3
"Event of Default"................................................. 6.1
"Excess Proceeds".................................................. 4.11
"legal defeasance option".......................................... 8.1
"Notice of Default"................................................ 6.1
"Offer"............................................................ 3.8
"Paying Agent"..................................................... 2.3
"Purchase Date".................................................... 3.8
"Registrar"........................................................ 2.3
"Restricted Payments".............................................. 4.5
"Successor Corporation"............................................ 5.1
"Trustee Expenses"................................................. 6.8
SECTION 3 INCORPORATION BY REFERENCE OF TRUST
-----------------------------------
INDENTURE ACT.
-------------
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in, and made a part of, this Indenture. Any terms
incorporated by reference in this Indenture that are defined by the TIA, defined
by TIA reference to another statute or defined by SEC rule under the TIA have
the meanings so assigned to them therein.
SECTION 4 RULES OF CONSTRUCTION.
---------------------
Unless the context otherwise requires:
22
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has the
meaning assigned to it under GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE SUBORDINATED EXCHANGE NOTES
SECTION 1 FORM AND DATING.
---------------
The Subordinated Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is part of
this Indenture. The Subordinated Exchange Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Subordinated
Exchange Note shall be dated the date of its authentication. The Subordinated
Exchange Notes shall be in denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the Subordinated Exchange Notes
shall constitute, and are hereby expressly made, a part of this Indenture and,
to the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Each Global Subordinated Exchange Note shall represent such of the
outstanding Subordinated Exchange Notes as shall be specified therein and each
shall provide that it shall represent the aggregate amount of outstanding
Subordinated Exchange Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Subordinated Exchange Notes represented thereby
may from time to time be reduced or increased, as appropriate, to
23
reflect exchanges and redemptions. Any endorsement of a Global Subordinated
Exchange Note to reflect the amount of any increase or decrease in the amount of
outstanding Subordinated Exchange Notes represented thereby shall be made by the
Trustee or the Subordinated Exchange Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.6.
SECTION 2 EXECUTION AND AUTHENTICATION.
----------------------------
One Officer shall sign the Subordinated Exchange Notes for the Company by
manual or facsimile signature. The Company's seal shall be reproduced on the
Subordinated Exchange Notes and may be in facsimile form.
If an Officer whose signature is on an Subordinated Exchange Note no longer
holds that office at the time an Subordinated Exchange Note is authenticated,
the Subordinated Exchange Note shall nevertheless be valid.
A Subordinated Exchange Note shall not be valid until authenticated by the
manual signature of an authorized signatory of the Trustee, and the Trustee's
signature shall be conclusive evidence that the Subordinated Exchange Note has
been authenticated under this Indenture. The form of Trustee's certificate of
authentication to be borne by the Subordinated Exchange Notes shall be
substantially as set forth in Exhibit A.
---------
The Trustee shall, upon a written order of the Company signed by two
Officers directing the Trustee to authenticate the Subordinated Exchange Notes
and certifying that all conditions precedent to the issuance of the
Subordinated Exchange Notes contained herein have been complied with,
authenticate Subordinated Exchange Notes for original issuance up to an
aggregate principal amount stated in paragraph 4 of the Subordinated Exchange
Notes (the aggregate principal amount of outstanding Subordinated Exchange
Notes may not exceed that amount at any time, except as provided in Section
2.7).
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Subordinated Exchange Notes. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Subordinated Exchange
Notes whenever the Trustee may do
24
so. Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate of the Company.
SECTION 3 REGISTRAR AND PAYING AGENT.
--------------------------
The Company shall maintain an office or agency (the "Registrar") where
---------
Subordinated Exchange Notes may be presented for registration of transfer or for
exchange and an office or agency (the "Paying Agent") where Subordinated
------------
Exchange Notes may be presented for payment. The Registrar shall keep a register
of the Subordinated Exchange Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional paying
agents. The term "Registrar" includes any co-registrar, and the term "Paying
--------- ------
Agent" includes any additional paying agent. The Company may change any Paying
-----
Agent or Registrar without prior notice to any Holder. The Company shall notify
in writing the Trustee and the Trustee shall notify the Holders in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, and such agreement shall
incorporate the TIA's provisions and implement the provisions of this Indenture
that relate to such Agent.
The Company initially appoints The Depository Trust Company ("DTC") to act
---
as Depositary with respect to the Global Subordinated Exchange Notes.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of notices and demands in connection with the Subordinated
Exchange Notes and as Subordinated Exchange Note Custodian with respect to the
Global Subordinated Exchange Notes. The Company or any of its Subsidiaries may
act as Paying Agent, Registrar or co-registrar. If the Company fails to appoint
or maintain a Registrar and Paying Agent, the Trustee shall act as such, and
shall be entitled to appropriate compensation in accordance with Section 7.7.
25
SECTION 4 PAYING AGENT TO HOLD MONEY IN TRUST.
-----------------------------------
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the Holders' benefit or
the Trustee all money the Paying Agent holds for redemption or purchase of the
Subordinated Exchange Notes or for the payment of principal of, or premium, if
any, or interest on, or Liquidated Damages, if any, with respect to the
Subordinated Exchange Notes, and will promptly notify the Trustee of any Default
by the Company in providing the Paying Agent with sufficient funds to (i)
purchase Subordinated Exchange Notes tendered pursuant to an Offer arising
under Section 4.10, (ii) redeem Subordinated Exchange Notes called for
redemption, or (iii) make any payment of principal, premium, interest or
Liquidated Damages due on the Subordinated Exchange Notes. While any such
Default continues, the Trustee may require the Paying Agent to pay all money it
holds to the Trustee and to account for any funds disbursed. The Company at any
time may require the Paying Agent to pay all money it holds to the Trustee and
to account for any funds disbursed. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or any of its Subsidiaries) shall have
no further liability for the money it delivered to the Trustee. If the Company
or any of its Subsidiaries acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the Holders' benefit or the Trustee all money it holds
as Paying Agent.
SECTION 5 HOLDER LISTS.
------------
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA section 312(a). If the Trustee
is not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require that sets forth the names and addresses of, and
the aggregate principal amount of Subordinated Exchange Notes held by, each
Holder, and the Company shall otherwise comply with section 312(a) of the TIA.
26
SECTION 6 TRANSFER AND EXCHANGE.
---------------------
(a) Transfer and Exchange of Definitive Subordinated Exchange
---------------------------------------------------------
Notes. When Definitive Subordinated Exchange Notes are presented by a Holder
-----
to the Registrar with a request:
(x) to register the transfer of the Definitive Subordinated
Exchange Notes; or
(y) to exchange such Definitive Subordinated Exchange Notes for an
equal principal amount of Definitive Subordinated Exchange
Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
-------- -------
Definitive Subordinated Exchange Notes presented or surrendered for register of
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing;
and
(ii) in the case of a Definitive Subordinated Exchange Note
that is a Transfer Restricted Subordinated Exchange Note, such request
shall be accompanied by the following additional information and documents,
as applicable:
(A) if such Transfer Restricted Subordinated Exchange Note is
being delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification to that effect from such Hold-
er (in substantially the form of Exhibit B hereto); or
---------
(B) if such Transfer Restricted Subordinated Exchange Note is
being transferred (1) to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act)
in
27
accordance with Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in accordance
with Rule 144 under the Securities Act (and based on an
opinion of counsel if the Company so requests) or (3)
pursuant to an effective registration statement under
the Securities Act, a certification to that effect from
such Holder (in substantially the form of Exhibit B
hereto); or ---------
(C) if such Transfer Restricted Subordinated Exchange Note is
being transferred to an institutional "accredited
investor," within the meaning of Rule 501(a)(1), (2), (3)
or (7) under the Securities Act pursuant to a private
placement exemption from the registration requirements of
the Securities Act (and based on an opinion of counsel
if the Company so requests), a certification to that
effect from such Holder (in substantially the form of
Exhibit B hereto) and a certification from the applicable
---------
transferee (in substantially the form of Exhibit C
---------
hereto); or
(D) if such Transfer Restricted Subordinated Exchange Note is
being transferred in reliance on another exemption from
the registration requirements of the Securities Act (and
based on an opinion of counsel if the Company so
requests), a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto).
---------
(b) Transfer of a Definitive Subordinated Exchange Note for a
---------------------------------------------------------
Beneficial Interest in a Global Subordinated Exchange Note. A Definitive
----------------------------------------------------------
Subordinated Exchange Note may not be exchanged for a beneficial interest in a
Global Subordinated Exchange Note except upon satisfaction of the requirements
set forth below.
28
Upon receipt by the Trustee of a Definitive Subordinated Exchange Note, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(i) if such Definitive Subordinated Exchange Note is a Transfer
Restricted Subordinated Exchange Note, a certification from the Holder
thereof (in substantially the form of Exhibit B hereto) to the effect that
such Definitive Subordinated Exchange Note is being transferred by such
Holder to a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in accordance with Rule 144A under the Securities Act;
and
(ii) whether or not such Definitive Subordinated Exchange Note is a
Transfer Restricted Subordinated Exchange Note, written instructions from
the Holder thereof directing the Trustee to make, or to direct the
Subordinated Exchange Note Custodian to make, an endorsement on the Global
Subordinated Exchange Note to reflect an increase in the aggregate
principal amount of the Subordinated Exchange Notes represented by the
Global Subordinated Exchange Note,
the Trustee shall cancel such Definitive Subordinated Exchange Note in
accordance with Section 2.11 and cause, or direct the Subordinated Exchange Note
Custodian to cause, in accordance with the standing instructions and procedures
existing between the Depositary and the Subordinated Exchange Note Custodian,
the aggregate principal amount of Subordinated Exchange Notes represented by
the Global Subordinated Exchange Note to be increased accordingly. If no Global
Subordinated Exchange Notes are then outstanding, the Company shall issue and,
upon receipt of an authentication order in accordance with Section 2.2, the
Trustee shall authenticate a new Global Subordinated Exchange Note in the
appropriate principal amount.
(c) Transfer and Exchange of Global Subordinated Exchange Notes. The
-----------------------------------------------------------
transfer and exchange of Global Subordinated Exchange Notes or beneficial inter-
ests therein shall be effected through the Depositary, in accordance with this
Indenture and the procedures of the
29
Depositary therefor, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Subordinated
----------------------------------------------------------
Exchange Note for a Definitive Subordinated Exchange Note.
----------------------------------------------------------
(i) Any Person having a beneficial interest in a Global
Subordinated Exchange Note may upon request exchange such beneficial interest
for a Definitive Subordinated Exchange Note. Upon receipt by the Trustee of
written instructions or such other form of instructions as is customary for the
Depositary, from the Depositary or its nominee on behalf of any Person having a
beneficial interest in a Global Subordinated Exchange Note, and, in the case of
a Transfer Restricted Subordinated Exchange Note, the following additional
information and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depositary as being the bene-
ficial owner, a certification to that effect from such
Person (in substantially the form of Exhibit B hereto);
---------
or
(B) if such beneficial interest is being transferred (1) to a
"qualified institutional buyer" (as defined in Rule 144A
under the Securities Act) in accordance with Rule 144A
under the Securities Act or (2) pursuant to an exemption
from registration in accordance with Rule 144 under the
Securities Act (and based on an opinion of counsel if
the Company so re quests) or (3) pursuant to an effec-
tive registration statement under the Securities Act, a
certification to that effect from the transferor (in
substantially the form of
Exhibit B hereto); or
---------
30
(C) if such beneficial interest is being transferred to an
institutional "accredited investor," within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act pursuant to a
private placement exemption from the registration requirements of
the Securities Act (and based on an opinion of counsel if the
Company so requests), a certification to that effect from such
Holder (in substantially the form of Exhibit B hereto) and a
---------
certification from the applicable transferee (in substantially
the form of Exhibit C hereto); or
---------
(D) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company
so requests), a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto).
---------
The Trustee or the Subordinated Exchange Note Custodian, at the
direction of the Trustee, shall, in accordance with the standing
instructions and procedures existing between the Depositary and the
Subordinated Exchange Note Custodian, cause the aggregate principal
amount of Global Subordinated Exchange Notes to be reduced accordingly
and, following such reduction, the Company shall execute and, upon
receipt of an authentication order in accordance with Section 2.2
hereof, the Trustee shall authenticate and deliver to the transferee a
Definitive Subordinated Exchange Note in the appropriate principal
amount.
(ii) Definitive Subordinated Exchange Notes issued in exchange for a
beneficial interest in a Global Subordinated Exchange Note pursuant to this
Section 2.6(d) shall be registered in such
31
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver in accordance with the
standard procedures of the Depositary such Definitive Subordinated Exchange
Notes to the Persons in whose names such Subordinated Exchange Notes are
so registered.
(e) Restrictions on Transfer and Exchange of Global Subordinated
------------------------------------------------------------
Exchange Notes. Notwithstanding any other provision of this Indenture (other
--------------
than the provisions set forth in subsection (f) of this Section 2.6), a Global
Subordinated Exchange Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
(f) Authentication of Definitive Subordinated Exchange Notes in
-----------------------------------------------------------
Absence of Depositary. If at any time:
---------------------
(i) the Depositary for the Subordinated Exchange Notes notifies
the Company that the Depositary is unwilling or unable to continue as
Depositary for the Global Subordinated Exchange Notes and a successor
Depositary for the Global Subordinated Exchange Notes is not appointed by
the Company within 90 days after delivery of such notice; or
(ii) The Company, at its sole discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Subordinated
Exchange Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2, authenticate and deliver,
Definitive Subordinated Exchange Notes in an aggregate principal amount equal to
the principal amount of the Global Subordinated Exchange Notes in exchange for
such Global Subordinated Exchange Notes and registered in such names as the
Depositary shall instruct the Trustee or the Company in writing.
32
(g) Legends.
-------
(i) Except for any Transfer Restricted Subordinated Exchange Note
sold or transferred (including any Transfer Restricted Subordinated Exchange
Note represented by a Global Subordinated Exchange Note) as described in (ii)
below, each Subordinated Exchange Note certificate evidencing Global
Subordinated Exchange Notes and Definitive Subordinated Exchange Notes (and all
Subordinated Exchange Notes issued in exchange therefor or substitution
thereof) shall bear legends in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX
XXXXXX SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
--------------
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a)
INSIDE THE UNITED STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER
33
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted Subordinated
Exchange Note (including any Transfer Restricted Subordinated Exchange Note
represented by a Global Subordinated Exchange Note) pursuant to an effective
registration statement under the Securities Act, pursuant to Rule 144 under the
Securities Act or pursuant to an opinion of counsel reasonably satisfactory to
the Company and the Registrar that no legend is required:
(A) in the case of any Transfer Restricted Subordinated Exchange Note
that is a Definitive Subordinated Exchange Note, the Registrar
shall permit the Holder thereof to exchange such Transfer
Restricted Subordinated Exchange Note for a Definitive
Subordinated Exchange Note that does not bear the legend set forth
in (i) above and rescind any restriction on the transfer of such
Transfer Restricted Subordinated Exchange Note; and
(B) in the case of any Transfer Restricted Subordinated Exchange Note
represented by a Global Subordinated Exchange Note, such Transfer
Restricted Subordinated Exchange Note shall not be required to
bear the legend set forth in (i) above if all other interests in
such Global Subordinated Exchange Note have been or are
concurrently being sold or transferred pursuant to Rule 144 under
the Securities Act or pursuant to an effective registration
statement under the Securities Act, but such Transfer Restricted
Subordinated Exchange Note shall continue to be subject to the
provisions of Section 2.6(c); provided, however, that with respect
-------- -------
to any request for an exchange of a Transfer
34
Restricted Subordinated Exchange Note that is represented by a
Global Subordinated Exchange Note for a Definitive Subordinated
Exchange Note that does not bear the legend set forth in (i)
above, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such
request is being made pursuant to Rule 144 (such certification to
be substantially in the form of Exhibit B hereto).
---------
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2, the Trustee shall
authenticate, Series B Subordinated Exchange Notes in exchange for Series A
Subordinated Exchange Notes accepted for exchange in the Exchange Offer,
which Series B Subordinated Exchange Notes shall not bear the legend set
forth in (i) above, and the Registrar shall rescind any restriction on the
transfer of such Subordinated Exchange Notes, in each case unless the
Holder of such Series A Subordinated Exchange Notes is either (A) a broker-
dealer, (B) a Person participating in the distribution of the Series A
Subordinated Exchange Notes or (C) a Person who is an affiliate (as defined
in Rule 144A) of the Company. The Company shall identify to the Trustee
such Holders of the Subordinated Exchange Notes in a written certification
signed by an Officer of the Company and, absent certification from the
Company to such effect, the Trustee shall assume that there are no such
Holders.
(h) Cancellation and/or Adjustment of Global Subordinated Exchange
--------------------------------------------------------------
Notes. At such time as all beneficial interests in Global Subordinated Exchange
-----
Notes have been exchanged for Definitive Subordinated Exchange Notes, redeemed,
repurchased or cancelled, all Global Subordinated Exchange Notes shall be
returned to or retained and cancelled by the Trustee in accordance with Section
2.11. At any time prior to such cancellation, if any beneficial interest in a
Global Subordinated Exchange Note is exchanged for Definitive Subordinated
Exchange Notes, redeemed, repurchased or cancelled, the principal
35
amount of Subordinated Exchange Notes represented by such Global Subordinated
Exchange Note shall be reduced accordingly and an endorsement shall be made on
such Global Subordinated Exchange Note, by the Trustee or the Subordinated
Exchange Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges.
------------------------------------------------------
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Definitive
Subordinated Exchange Notes and Global Subordinated Exchange Notes at the
Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or "exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.7, 4.10, 4.11 and 9.5).
(iii) Neither the Company nor the Registrar shall be required
to register the transfer of or exchange any Subordinated Exchange Note
selected for redemption in whole or in part, except the unredeemed portion
of any Subordinated Exchange Note being redeemed in part.
(iv) All Definitive Subordinated Exchange Notes and Global
Subordinated Exchange Notes issued upon any registration of transfer or
exchange of Definitive Subordinated Exchange Notes or Global Subordinated
Exchange Notes in accordance with this Indenture (including any increase in
the aggregate principal amount of the Subordinated Exchange Notes
represented by the Global Subordinated Exchange Note pursuant to subsection
(b) above) shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Definitive Subordinated Exchange Notes or Global Subordinated Exchange
Notes surrendered upon such registration of transfer or exchange.
36
(v) The Company shall not be required to issue Subordinated
Exchange Notes and the Registrar shall not be required to register the
transfer of or to exchange Subordinated Exchange Notes during a period
beginning at the opening of business 15 days before the day of any
selection of Subordinated Exchange Notes for redemption under Section 3.2
and ending at the close of business on the day of selection, or to
register the transfer of or to exchange a Subordinated Exchange Note
between a record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a
transfer of any Subordinated Exchange Note, the Trustee, any Agent and the
Company may deem and treat the Person in whose name any Subordinated
Exchange Note is registered as the absolute owner of such Subordinated
Exchange Note for the purpose of receiving payment of principal of,
premium, if any, accrued and unpaid interest, and Liquidated Damages, if
any, on such Subordinated Exchange Notes, and neither the Trustee, any
Agent nor the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Subordinated
Exchange Notes and Global Subordinated Exchange Notes in accordance with
the provisions of Section 2.2.
SECTION 7 REPLACEMENT SUBORDINATED EXCHANGE NOTES.
---------------------------------------
If any mutilated Subordinated Exchange Note is surrendered to the Trustee,
or the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Subordinated Exchange Note, the Company shall
issue and the Trustee, upon the Company's written order signed by two Officers,
shall authenticate a replacement Subordinated Exchange Note if the Trustee's
requirements are met. If the Trustee or the Company requires it, the Holder
must supply an indemnity bond that is sufficient in the judgment of the Trustee
and the Company to protect the Company, the Trustee, any Agent or any
authenticating agent from any loss that any of them may suffer if a Subordinated
Exchange Note is replaced. The Company and the Trustee may charge for their
expenses in replacing a Subordinated
37
Exchange Note. Every replacement Subordinated Exchange Note is an additional
Obligation of the Company.
SECTION 8 OUTSTANDING SUBORDINATED EXCHANGE NOTES.
---------------------------------------
The Subordinated Exchange Notes outstanding at any time are all the
Subordinated Exchange Notes the Trustee has authenticated except for those it
has cancelled, those delivered to it for cancellation, those representing
reductions in the interest in a Global Subordinated Exchange Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding.
If a Subordinated Exchange Note is replaced pursuant to Section 2.7, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that a bona fide purchaser holds the replaced Subordinated Exchange Note.
If the entire principal of, and premium, if any, and accrued interest on
any Subordinated Exchange Note is considered paid under Section 4.1, it ceases
to be outstanding and interest and Liquidated Damages on it cease to accrue.
Subject to Section 2.9, a Subordinated Exchange Note does not cease to be
outstanding because the Company or an Affiliate holds the Subordinated Exchange
Note.
SECTION 9 TREASURY SUBORDINATED EXCHANGE NOTES.
------------------------------------
In determining whether the Holders of the required principal amount of
Subordinated Exchange Notes have concurred in any direction, waiver or consent,
Subordinated Exchange Notes owned by the Company or an Affiliate shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Subordinated Exchange Notes that a Trust
Officer of the Trustee knows are so owned shall be so disregarded.
Notwithstanding the foregoing, Subordinated Exchange Notes that the Company or
an Affiliate offers to purchase or acquires pursuant to an Offer, exchange
offer, tender offer or otherwise shall not be deemed to be owned by the Company
or an Affiliate until
38
legal title to such Subordinated Exchange Notes passes to the Company or such
Affiliate, as the case may be.
SECTION 10 TEMPORARY SUBORDINATED EXCHANGE NOTES.
-------------------------------------
Until Definitive Subordinated Exchange Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Subordinated
Exchange Notes. Temporary Subordinated Exchange Notes shall be substantially in
the form of Definitive Subordinated Exchange Notes but may have variations that
the Company considers appropriate for temporary Subordinated Exchange Notes.
Without unreasonable delay, the Company shall prepare and the Trustee, upon
receipt of the Company's written order signed by two Officers which shall
specify the amount of temporary Subordinated Exchange Notes to be authenticated
and the date on which the temporary Subordinated Exchange Notes are to be
authenticated, shall authenticate Definitive Subordinated Exchange Notes and
deliver them in exchange for temporary Subordinated Exchange Notes. Until such
exchange, Holders of temporary Subordinated Exchange Notes shall be entitled to
the same rights, benefits and privileges as Definitive Subordinated Exchange
Notes.
SECTION 11 CANCELLATION.
------------
The Company at any time may deliver Subordinated Exchange Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Subordinated Exchange Notes surrendered to them for registration
of transfer, exchange, replacement, payment (including all Subordinated Exchange
Notes called for redemption and all Subordinated Exchange Notes accepted for
payment pursuant to an Offer) or cancellation, and the Trustee shall cancel all
such Subordinated Exchange Notes and shall destroy all cancelled Subordinated
Exchange Notes (subject to the Exchange Act's record retention requirements) and
deliver a certificate of their destruction to the Company unless by written
order, signed by two Officers of the Company, the Company shall direct that
cancelled Subordinated Exchange Notes be returned to it. The Company may not
issue new Subordinated Exchange Notes to replace any Subordinated Exchange
Notes that have been cancelled by the Trustee or that have been delivered to the
Trustee for cancellation. If the Company or an Affiliate acquires any
Subordinated
39
Exchange Notes (other than by redemption or pursuant to an Offer), such
acquisition shall not operate as a redemption or satisfaction of the
Indebtedness represented by such Subordinated Exchange Notes unless and until
such Subordinated Exchange Notes are delivered to the Trustee for cancellation.
SECTION 12 DEFAULTED INTEREST.
------------------
If the Company defaults in a payment of interest on the Subordinated
Exchange Notes, it shall pay the defaulted interest in any lawful manner plus,
to the extent lawful, interest payable on the defaulted interest, to Holders on
a subsequent special record date, in each case at the rate provided in the
Subordinated Exchange Notes. The Company shall fix or cause to be fixed each
such special record date and payment date. As early as practicable prior to
the special record date, the Company (or the Trustee, in the name of and at the
expense of the Company) shall mail a notice that states the special record date,
the related payment date and the amount of interest to be paid.
SECTION 13 RECORD DATE.
-----------
The record date for purposes of determining the identity of Holders of
Subordinated Exchange Notes entitled to vote or consent to any action by vote
or consent authorized or permitted under this Indenture shall be determined as
provided for in section 316(c) of the TIA.
SECTION 14 CUSIP NUMBER.
------------
A "CUSIP" number shall be printed on the Subordinated Exchange Notes, and
the Trustee shall use the CUSIP number in notices of redemption, purchase or
exchange as a convenience to Holders, provided that any such notice may state
--------
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Subordinated Exchange Notes and that
reliance may be placed only on the other identification numbers printed on the
Subordinated Exchange Notes. The Company shall promptly notify the Trustee of
any change in the CUSIP number.
40
ARTICLE 3
OPTIONAL REDEMPTION AND
MANDATORY OFFERS TO PURCHASE
SECTION 1 NOTICES TO TRUSTEE.
------------------
If the Company elects to redeem Subordinated Exchange Notes pursuant
to Section 3.7, it shall furnish to the Trustee, at least 40 days prior to the
redemption date and at least 10 days prior to the date that notice of the
redemption is to be mailed by the Company to Holders, an Officers' Certificate
stating that the Company has elected to redeem Subordinated Exchange Notes
pursuant to Section 3.7(a) or 3.7(b), as the case may be, the date notice of
redemption is to be mailed to Holders, the redemption date, the aggregate
principal amount of Subordinated Exchange Notes to be redeemed, the redemption
price for such Subordinated Exchange Notes and the amount of accrued and unpaid
interest on and Liquidated Damages, if any, with respect to such Subordinated
Exchange Notes as of the redemption date. If the Trustee is not the Registrar,
the Company shall, concurrently with delivery of its notice to the Trustee of a
redemption, cause the Registrar to deliver to the Trustee a certificate (upon
which the Trustee may rely) setting forth the name of, and the aggregate
principal amount of Subordinated Exchange Notes held by, each Holder.
If the Company is required to offer to purchase Subordinated Exchange
Notes pursuant to Section 4.10 or 4.11, it shall furnish to the Trustee, at
least 2 Business Days before notice of the Offer is to be mailed to Holders, an
Officers' Certificate setting forth that the Offer is being made pursuant to
Section 4.10 or 4.11, as the case may be, the Purchase Date, the maximum
principal amount of Subordinated Exchange Notes the Company is offering to
purchase pursuant to the Offer, the purchase price for such Subordinated
Exchange Notes, and the amount of accrued and unpaid interest on and Liquidated
Damages, if any, with respect to such Subordinated Exchange Notes as of the
Purchase Date.
The Company will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
41
SECTION 2 SELECTION OF SUBORDINATED EXCHANGE NOTES TO BE REDEEMED OR
----------------------------------------------------------
PURCHASED.
---------
If less than all outstanding Subordinated Exchange Notes are to be
redeemed or if less than all Subordinated Exchange Notes tendered pursuant to an
Offer are to be accepted for payment, the Trustee shall select the outstanding
Subordinated Exchange Notes to be redeemed or accepted for payment pro rata, by
lot or by a method that complies with the requirements of any stock exchange on
which the Subordinated Exchange Notes are listed and that the Trustee considers
fair and appropriate. If the Company elects to mail notice of a redemption to
Holders, the Trustee shall at least 5 business days prior to the date notice of
redemption is to be mailed, (i) select the Subordinated Exchange Notes to be
redeemed from Subordinated Exchange Notes outstanding not previously called for
redemption and (ii) notify the Company of the names of each Holder of
Subordinated Exchange Notes selected for redemption, the principal amount of
Subordinated Exchange Notes held by each such Holder and the principal amount of
such Holder's Subordinated Exchange Notes that are to be redeemed. If less than
all Subordinated Exchange Notes tendered pursuant to an Offer on the Purchase
Date are to be accepted for payment, the Trustee shall select on or promptly
after the Purchase Date the Subordinated Exchange Notes to be accepted for
payment. The Trustee shall select for redemption or purchase Subordinated
Exchange Notes or portions of Subordinated Exchange Notes in principal amounts
of $1,000 or integral multiples of $1,000; except that if all of the
Subordinated Exchange Notes of a Holder are selected for redemption or purchase,
the aggregate principal amount of the Subordinated Exchange Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Subordinated Exchange Notes called for redemption or tendered pursuant to an
offer also apply to portions of Subordinated Exchange Notes called for
redemption or tendered pursuant to an Offer. The Trustee shall notify the
Company promptly of the Subordinated Exchange Notes or portions of Subordinated
Exchange Notes to be called for redemption or selected for purchase.
42
SECTION 3 NOTICE OF REDEMPTION.
--------------------
At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption to each Holder of Subordinated
Exchange Notes or portions thereof that are to be redeemed.
The notice shall identify the Subordinated Exchange Notes or portions
thereof to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price for the Exchange Notes and separately
stating the amount of unpaid and accrued interest on, and
Liquidated Damages, if any, with respect to, such
Subordinated Exchange Notes as of the date of redemption;
(3) if any Subordinated Exchange Note is being redeemed in part,
the portion of the principal amount of such Subordinated
Exchange Notes to be redeemed and that, after the redemption
date, upon surrender of such Subordinated Exchange Note, a new
Subordinated Exchange Note or Subordinated Exchange Notes in
principal amount equal to the unredeemed portion will be
issued;
(4) the name and address of the Paying Agent;
(5) that Subordinated Exchange Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption
price for, and any accrued and unpaid interest on, and
Liquidated Damages, if any, with respect to, such Subordinated
Exchange Notes;
(6) that, unless the Company defaults in making such redemption
payment, interest on Subordinated Exchange Notes called for
redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Subordinated Exchange Notes pursuant to
which the Subordinated
43
Exchange Notes called for redemption are being redeemed; and
(8) the CUSIP number; provided that no representation is made as
--------
to the correctness or accuracy of the CUSIP number listed in
such notice and printed on the Subordinated Exchange Notes.
At the Company's request, the Trustee shall (at the Company's expense)
give the notice of redemption in the Company's name at least 30 but not more
than 60 days before a redemption; provided, however, that the Company shall
-------- -------
deliver to the Trustee, at least 45 days prior to the redemption date and at
least 10 days prior to the date that notice of the redemption is to be mailed to
Holders, an Officers' Certificate that (i) requests the Trustee to give notice
of the redemption to Holders, (ii) sets forth the information to be provided to
Holders in the notice of redemption, as set forth in the preceding paragraph,
(iii) states that the Company has elected to redeem Subordinated Exchange Notes
pursuant to Section 3.7(a) or 3.7(b), as the case may be, and (iv) sets forth
the aggregate principal amount of Subordinated Exchange Notes to be redeemed and
the amount of accrued and unpaid interest and Liquidated Damages, if any,
thereon as of the redemption date. If the Trustee is not the Registrar, the
Company shall, concurrently with any such request, cause the Registrar to
deliver to the Trustee a certificate (upon which the Trustee may rely) setting
forth the name of, the address of, and the aggregate principal amount of
Subordinated Exchange Notes held by, each Holder.
SECTION 4 EFFECT OF NOTICE OF REDEMPTION.
------------------------------
Once notice of redemption is mailed, Subordinated Exchange Notes
called for redemption become due and payable on the redemption date at the price
set forth in the Subordinated Exchange Note. Upon surrender to the Trustee or
Paying Agent, such Subordinated Exchange Notes called for redemption shall be
paid at the redemption price (which shall include accrued interest thereon to
the redemption date) but installments of interest, the maturity of which is on
or prior to the redemption date, shall be payable to Holders of record at the
close of business on the relevant record dates.
44
SECTION 5 DEPOSIT OF REDEMPTION PRICE.
---------------------------
On or prior to any redemption date, the Company shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the redemption price
of, and accrued interest on, and Liquidated Damages, if any, with respect to,
all Subordinated Exchange Notes to be redeemed on that date. The Trustee or
the Paying Agent shall return to the Company any money that the Company
deposited with the Trustee or the Paying Agent in excess of the amounts
necessary to pay the redemption price of, and accrued interest on, and
Liquidated Damages, if any, with respect to, all Subordinated Exchange Notes to
be redeemed.
If the Company complies with the preceding paragraph, interest on the
Subordinated Exchange Notes to be redeemed will cease to accrue on such
Subordinated Exchange Notes on the applicable redemption date, whether or not
such Subordinated Exchange Notes are presented for payment. If a Subordinated
Exchange Note is redeemed on or after an interest record date but on or prior to
the related interest payment date, then any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name such
Subordinated Exchange Note was registered at the close of business on such
record date. If any Subordinated Exchange Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of the Company
to comply with the preceding paragraph, interest will be paid on the unpaid
principal, premium, if any, interest and Liquidated Damages, if any, from the
redemption date until such principal, premium and interest and Liquidated
Damages, if any, is paid, at the rate of interest provided in the Subordinated
Exchange Notes and Section 4.1.
SECTION 6 SUBORDINATED EXCHANGE NOTES REDEEMED IN PART.
--------------------------------------------
Upon surrender of a Subordinated Exchange Note that is redeemed in
part, the Company shall issue and the Trustee shall authenticate for the Holder
at the Company's expense a new Subordinated Exchange Note equal in principal
amount to the unredeemed portion of the Subordinated Exchange Note surrendered.
45
SECTION 7 OPTIONAL REDEMPTION PROVISIONS.
------------------------------
(a) Except as provided in Section 3.7(b), the Subordinated Exchange
Notes may not be redeemed at the option of the Company prior to August 1, 2002,
other than out of the net proceeds of one or more Equity Offerings, as and to
the extent described in this Indenture. During the twelve (12) month period
beginning on August 1 of the years indicated below, the Subordinated Exchange
Notes will be redeemable at the option of the Company, in whole or in part, on
at least 30 but not more than 60 days' notice to each Holder of Subordinated
Exchange Notes to be redeemed, at the redemption prices (expressed as
percentages of the principal amount) set forth below, plus any accrued and
unpaid interest and Liquidated Damages, if any, to the redemption date:
Year Percentage
---- ----------
2002 ....................... 106.6250%
2003 ....................... 104.4167%
2004 ....................... 102.2083%
2005 and thereafter ........ 100.0000%
(b) Notwithstanding the foregoing, at any time the Company may
redeem the Subordinated Exchange Notes in whole, but not in part, at a
redemption price of 113.25% of the principal amount thereof, plus any accrued
and unpaid interest and Liquidated Damages, if any, to the applicable date of
redemption with the proceeds of an Equity Offering; provided, that such
--------
redemption shall occur within 60 days of the date of the closing of such Equity
Offering.
SECTION 8 MANDATORY PURCHASE PROVISIONS.
-----------------------------
(a) Within 30 days following any Change of Control or Asset Sale
Trigger Date, the Company shall mail a notice to each Holder at such Holder's
registered address stating (i) that an offer ("Offer") is being made pursuant to
-----
Section 4.10 or Section 4.11, as the case may be, the length of time the Offer
shall remain open, the amount of the Offer and the maximum aggregate principal
amount of Subordinated Exchange Notes that will be accepted for payment
pursuant to such Offer; (ii) the
46
purchase price for the Subordinated Exchange Notes (as set forth in Section 4.10
or Section 4.11, as the case may be), the amount of accrued and unpaid interest
on, and Liquidated Damages, if any, with respect to, such Subordinated Exchange
Notes as of the purchase date, and the purchase date (which shall be no earlier
than 30 days or later than 40 days from the date such notice is mailed (the
"Purchase Date")); (iii) that any Subordinated Exchange Note not accepted for
-------------
payment will continue to accrue interest and Liquidated Damages, if any; (iv)
that, unless the Company fails to deposit with the Paying Agent on the Purchase
Date an amount sufficient to purchase all Subordinated Exchange Notes accepted
for payment, interest shall cease to accrue on such Subordinated Exchange Notes
after the Purchase Date; (v) that Holders electing to tender any Subordinated
Exchange Note or portion thereof will be required to surrender their
Subordinated Exchange Note, with a form entitled "Option of Holder to Elect
Purchase" completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the Business Day preceding the Purchase Date,
provided that Holders electing to tender only a portion of any Subordinated
--------
Exchange Note must tender a principal amount of $1,000 or integral multiples
thereof, (vi) that Holders will be entitled to withdraw their election to tender
Subordinated Exchange Notes, if the Paying Agent receives, not later than the
close of business on the third Business Day preceding the Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Subordinated Exchange Notes delivered for
purchase, and a statement that such Holder is withdrawing his election to have
such Subordinated Exchange Note purchased; and (vii) that Holders whose
Subordinated Exchange Notes are accepted for payment in part will be issued new
Subordinated Exchange Notes equal in principal amount to the unpurchased portion
of Subordinated Exchange Notes surrendered; provided that only Subordinated
--------
Exchange Notes in a principal amount of $1,000 or integral multiples thereof
will be accepted for payment in part.
(b) On any Purchase Date, the Company shall, to the extent lawful
and required by this Indenture and such Offer, (i) in the case of an Offer
resulting from a Change of Control, accept for payment all Subordinated Exchange
Notes or portions thereof tendered pursuant to
47
such Offer and, in the case of an Offer resulting from an Asset Sale Trigger
Date, accept for payment the maximum aggregate principal amount of Subordinated
Exchange Notes or portions thereof tendered pursuant to such Offer that can be
purchased out of Excess Proceeds from such Asset Sale Trigger Date, (ii) deposit
with the Paying Agent the aggregate purchase price of all Subordinated Exchange
Notes or portions thereof accepted for payment and any accrued and unpaid
interest and Liquidated Damages, if any, on such Subordinated Exchange Notes as
of the Purchase Date, and (iii) deliver or cause to be delivered to the Trustee
all Subordinated Exchange Notes so accepted together with an Officers'
Certificate stating the Subordinated Exchange Notes or portions thereof tendered
to the Company.
(c) With respect to any Offer, if less than all of the Subordinated
Exchange Notes tendered pursuant to an Offer are to be purchased by the Company,
the Trustee shall select on the Purchase Date the Subordinated Exchange Notes
or portions thereof to be accepted for payment pursuant to Section 3.2.
(d) Promptly after consummation of an Offer, (i) the Paying Agent
shall mail (or cause to be transferred by book entry) to each Holder of
Subordinated Exchange Notes or portions thereof accepted for payment an amount
equal to the purchase price for, plus any accrued and unpaid interest on, and
Liquidated Damages, if any, with respect to, such Subordinated Exchange Notes as
of the Purchase Date, (ii) with respect to any tendered Subordinated Exchange
Note not accepted for payment in whole or in part, the Trustee shall return such
Subordinated Exchange Note to the Holder thereof, and (iii) with respect to any
Subordinated Exchange Note accepted for payment in part, the Trustee shall
authenticate and mail to each such Holder a new Subordinated Exchange Note equal
in principal amount to the unpurchased portion of the tendered Subordinated
Exchange Note, provided that each such new Subordinated Exchange Note shall be
--------
in a principal amount of $1,000 or integral multiples thereof.
(e) The Company will publicly announce the results of the Offer on
or as soon as practicable after the Purchase Date.
48
(f) The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations to the extent such laws and
regulations are applicable to any Offer. To the extent that the provisions of
any of the securities laws or regulations conflict with provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Indenture by virtue thereof.
(g) With respect to any Offer, if the Company deposits prior to
10:00 a.m. New York City time with the Paying Agent on the Purchase Date an
amount in available funds sufficient to purchase all Subordinated Exchange Notes
accepted for payment, interest shall cease to accrue on such Subordinated
Exchange Notes after the Purchase Date; provided, however, that if the Company
-------- -------
fails to deposit such amount on the Purchase Date, interest shall continue to
accrue on such Subordinated Exchange Notes until such deposit is made.
ARTICLE 4
COVENANTS
SECTION 1 PAYMENT OF SUBORDINATED EXCHANGE NOTES.
--------------------------------------
The Company shall pay the principal of, and premium, if any, and accrued
and unpaid interest on the Subordinated Exchange Notes on the dates and in the
manner provided in the Subordinated Exchange Notes. Holders of Subordinated
Exchange Notes must surrender their Subordinated Exchange Notes to the Paying
Agent to collect principal payments. Principal of, premium, if any, and accrued
and unpaid interest, and Liquidated Damages, if any, shall be considered paid on
the date due if the Paying Agent (other than the Company or any of its
Subsidiaries), the Global Subordinated Exchange Note Holder or each Holder that
has specified an account, holds, as of 10:00 a.m. New York City time, money the
Company deposited in immediately available funds designated for and sufficient
to pay in cash all principal, premium, if any, and accrued and unpaid interest
on, and Liquidated Damages, if any, then due; provided that, to the extent that
--------
the Holders have not specified accounts, such amounts shall be considered paid
on the date due if the Company mails a check for such amounts on such date. The
49
Paying Agent shall return to the Company, no later than five days following the
date of payment, any money (including accrued interest) that exceeds the amount
of principal, premium, if any, accrued and unpaid interest, and Liquidated
Damages, if any, paid on the Subordinated Exchange Notes. The Company shall pay
all Liquidated Damages, if any, in the same manner on the dates and in the
amounts set forth in the Registration Rights Agreement. If any Liquidated
Damages become payable, the Company shall not later than three Business Days
prior to the date that any payment of Liquidated Damages is due (i) deliver an
Officers' Certificate to the Trustee setting forth the amount of Liquidated
Damages payable to Holders and (ii) instruct the Paying Agent to pay such amount
of Liquidated Damages to Holders entitled to receive such Liquidated Damages.
To the extent lawful, the Company shall pay interest (including Post-
Petition Interest) on (i) overdue principal and premium at the then applicable
interest rate on the Subordinated Exchange Notes, compounded semiannually and
(ii) overdue installments of interest (without regard to any applicable grace
period) at the same rate as set forth in clause (i), compounded semiannually.
To the extent any payment on the Subordinated Exchange Notes, whether by
or on behalf of the Company, as proceeds of security or enforcement of any right
of setoff or otherwise, is declared to be fraudulent or preferential, set aside
or required to be paid to a trustee, receiver or other similar party under any
bankruptcy, insolvency, receivership or similar law, then if such payment is
recovered by, or paid over to, such trustee, receiver or other similar party,
the Subordinated Exchange Notes or part thereof originally intended to be
satisfied by such payment shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
SECTION 2 SEC REPORTS.
-----------
(a) The Company shall file with the Trustee, within 15 days after it
files them with the SEC, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) that the Company is required
to file with the
50
SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is not
subject to the requirements of Section 13 or 15(d) of the Exchange Act, the
Company shall file with the Trustee, within 15 days after it would have been
required to file with the SEC, financial statements, including any notes thereto
(and with respect to annual reports, an auditor's report by a firm of
established national reputation), and a "Management's Discussion and Analysis of
Financial Condition and Results of Operations," both comparable to that which
the Company would have been required to include in such annual reports,
information, documents or other reports if the Company were subject to the
requirements of Section 13 or 15(d) of the Exchange Act. Subsequent to the
qualification of this Indenture under the TIA, the Company also shall comply
with the provisions of section 314(a) of the TIA.
(b) If the Company is required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause any annual report furnished to its stockholders generally and any
quarterly or other financial reports it furnishes to its stockholders generally
to be filed with the Trustee and the Company shall mail to the Holders at their
addresses appearing in the register of Subordinated Exchange Notes maintained by
the Registrar. If the Company is not required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the Company shall
cause its financial statements referred to in Section 4.2(a), including any
notes thereto (and with respect to annual reports, an auditors' report by a firm
of established national reputation), and a "Management's Discussion and Analysis
of Financial Condition and Results of Operations," to be so mailed to the
Holders within 120 days after the end of each of the Company's fiscal years and
within 60 days after the end of each of the first three fiscal quarters of each
year. The Company shall cause to be disclosed in a statement accompanying any
annual report or comparable information as of the date of the most recent
financial statements in each such report or comparable information the amount
available for payments pursuant to Section 4.5. As of the date hereof, the
Company's fiscal year ends on December 31.
(c) If the Company is not subject to the requirements of Section 13
or 15(d) of the Exchange Act,
51
for so long as any Subordinated Exchange Notes remain outstanding, the Company
shall furnish to the Holders, securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
(d) Notwithstanding anything herein to the contrary, the Trustee
shall have no duty to review such documents for purposes of determining their
compliance with any provision of this Indenture.
SECTION 3 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 a review
of the activities of the Company and its Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determine whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that, to the best of his or her
knowledge, the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company has taken or proposes to take with respect thereto) and that,
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of, premium,
if any, and accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to the Subordinated Exchange Notes are prohibited or if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto.
So long as not contrary to the then current recommendations of the American
Institute of Certified Public Accountants, the financial statements delivered
pursuant to Section 4.2 shall be accompanied by a written statement of the
Company's independent public accountants (who shall be a firm of established
national reputation reasonably satisfactory to the Trustee) that in making the
52
examination necessary for certification of such financial statements nothing has
come to their attention that would lead them to believe that the Company has
violated any provisions of Section 4.1, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11 or
4.12 or of Sections 4.7, 4.9, 4.11 or 4.15 of each of the Senior Notes Indenture
and the Discount Notes Indenture, or of Article 5 or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
The Company shall, so long as any of the Subordinated Exchange Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
XXXXXXX 0 XXXX, XXXXXXXXX AND USURY LAWS.
------------------------------
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that might affect the covenants
or the performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law has been
enacted.
SECTION 5 LIMITATION ON RESTRICTED PAYMENTS.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, (i) declare or pay any dividend or make
any distribution on account of the Company's or such Restricted Subsidiary's
Capital Stock or other Equity Interests (other than dividends or distributions
payable in Capital Stock or other Equity Interests (other than Disqualified
Stock) of the Company or a Restricted Subsidiary and other than dividends or
distributions payable
53
by a Restricted Subsidiary to another Restricted Subsidiary or to the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any Equity
Interests of the Company or any of its Restricted Subsidiaries (other than any
such Equity Interest purchased from the Company or any Restricted Subsidiary for
fair market value (as determined by the Board of Directors in good faith));
(iii) voluntarily prepay Subordinated Indebtedness, whether any such
Subordinated Indebtedness is outstanding on, or issued after, the date of
original issuance of the Senior Notes and Discount Notes, except as specifically
permitted by the covenants of this Indenture; or (iv) make any Restricted
Investment (all such dividends, distributions, purchases, redemptions,
acquisitions, retirements, prepayments and Restricted Investments being
collectively referred to as "Restricted Payments"), if, at the time of such
-------------------
Restricted Payment:
(A) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof; or
(B) immediately after such Restricted Payment and after giving
effect thereto on a Pro Forma Basis, the Company shall not be
able to issue $1.00 of additional Indebtedness pursuant to
Section 4.7(a) of each of the Senior Notes Indenture and the
Discount Notes Indenture; or
(C) such Restricted Payment, together with the aggregate of all
other Restricted Payments made after the date of original
issuance of the Senior Notes and Discount Notes, without
duplication, exceeds the sum of: (1) 50% of the aggregate
Consolidated Net Income (including, for this purpose, gains from
Asset Sales and, to the extent not included in Consolidated Net
Income, any gain from a sale or disposition of a Restricted
Investment) of the Company (or, in case such aggregate is a
loss, 100% of such loss) for the period (taken as one accounting
period) from the beginning of the first fiscal quarter
commencing immediately after the date of original issuance of
the Senior Notes and Discount
54
Notes and ended as of the Company's most recently ended fiscal
quarter at the time of such Restricted Payment, plus (2) 100% of
the aggregate net cash proceeds and the fair market value of any
property or securities (as determined by the Board of Directors
in good faith) received by the Company from the issue or sale of
Capital Stock or other Equity Interests of the Company subsequent
to the date of original issuance of the Senior Notes and Discount
Notes (other than (x) Capital Stock or other Equity Interests
issued or sold to a Restricted Subsidiary and (y) the issuance or
sale of Disqualified Stock), plus (3) $5,000,000, plus (4) the
amount by which the principal amount of and any accrued interest
on either (A) Senior Indebtedness of the Company, or (B) any
Indebtedness of the Restricted Subsidiaries is reduced on the
Company's consolidated balance sheet upon the conversion or
exchange subsequent to the date of original issuance of the
Senior Notes and Discount Notes of any such Indebtedness of the
Company or any Restricted Subsidiary (not held by the Company or
any Restricted Subsidiary) for Capital Stock or other Equity
Interests (other than Disqualified Stock) of the Company or any
Restricted Subsidiaries (less the amount of any cash, or the fair
market value of any other property or securities (as determined
by the Board of Directors in good faith), distributed by the
Company or any Restricted Subsidiary (to Persons other than the
Company or any other Restricted Subsidiary) upon such conversion
or exchange), plus (5) if any Non-Restricted Subsidiary is
redesignated as a Restricted Subsidiary, the value of the deemed
Restricted Payment resulting therefrom and determined in
accordance with the second sentence of Section 4.12; provided,
--------
however, that for purposes of this clause (5), the value of any
-------
redesignated Non-Restricted Subsidiary shall be reduced by the
amount that any such redes-
55
ignation replenishes or increases the amount of Restricted
Investments permitted to be made pursuant to Section 4.5(b)(ii).
(b) Notwithstanding Section 4.5(a), the following Restricted
Payments may be made: (i) the payment of any dividend within 60 days after the
date of declaration thereof, if at said date of declaration such payment would
comply with all the provisions hereof (including, but not limited to, this
Section 4.5); (ii) making Restricted Investments at any time, and from time to
time, in an aggregate outstanding amount of $40,000,000 after the date of
original issuance of the Senior Notes and Discount Notes (it being understood
that if any Restricted Investment made after the date of original issuance of
the Senior Notes and Discount Notes pursuant to this Section 4.5(b)(ii) is sold,
transferred or otherwise conveyed to any Person other than the Company or a
Restricted Subsidiary, the portion of the net cash proceeds or fair market value
of securities or properties paid or transferred to the Company and its
Restricted Subsidiaries in connection with such sale, transfer or conveyance
that relates or corresponds to the repayment or return of the original cost of
such a Restricted Investment will replenish or increase the amount of Restricted
Investments permitted to be made pursuant to this clause (ii), so that up to
$40,000,000 of Restricted Investments may be outstanding under this Section
4.5(b)(ii) at any given time; provided that without otherwise limiting this
--------
clause (ii) any Restricted Investment in a Restricted Subsidiary made pursuant
to this Section 4.5(b)(ii) is made for fair market value (as determined by the
Board of Directors in good faith); (iii) the repurchase, redemption or
acquisition of the Company's stock from the executives, management and employees
or consultants of the Company or its Subsidiaries pursuant to the terms of any
subscription, stockholder or other agreement or plan, up to an aggregate amount
not to exceed $5,000,000; (iv) any loans, advances, distributions or payments
from the Company to its Restricted Subsidiaries, or any loans, advances,
distributions or payments by a Restricted Subsidiary to the Company or to
another Restricted Subsidiary, pursuant to intercompany Indebtedness,
intercompany management agreements, intercompany tax sharing agreements and
other intercompany agreements and obligations; (v) the purchase, redemption,
retirement or other acquisition of (A) any Senior Indebtedness of the Company
56
and any Indebtedness of a Restricted Subsidiary required by its terms to be
purchased, redeemed, retired or acquired with the net proceeds from asset sales
(as defined in the instrument evidencing such Indebtedness) or upon a change of
control (as defined in the instrument evidencing such Indebtedness) and (B) the
Subordinated Exchange Notes pursuant to Sections 3.7, 4.10 and 4.11; (vi)
dividends and redemptions in respect of the Dura-Line Preferred Stock pursuant
to the Dura-Line Agreement; (vii) to the extent constituting Restricted
Payments, payments under the Tax Sharing Agreement, New Subsidiary Consulting
Agreement, Transition Agreement and the Properties Services Agreement; (viii) to
the extent constituting Restricted Payments, (A) payments under the New
Subsidiary Advisory Agreement, provided that such payments will not be made and
--------
shall be accrued so long as any Default or Event of Default shall have occurred
and be continuing or shall occur as a consequence thereof, and the Company's
Obligations to pay such fees under the New Subsidiary Advisory Agreement shall
be subordinated expressly to the Company's Obligations in respect of the
Subordinated Exchange Notes, and (B) indemnities, expenses and other amounts
under the New Subsidiary Advisory Agreement; (ix) the redemption, repurchase,
retirement or the acquisition of any Capital Stock or other Equity Interests of
the Company or any Restricted Subsidiary in exchange for, or out of the proceeds
of, the substantially concurrent sale (other than to a Subsidiary of the
Company) of other Capital Stock or other Equity Interests of the Company or any
Restricted Subsidiary (other than any Disqualified Stock); provided that any net
--------
cash proceeds that are utilized for any such redemption, repurchase, retirement
or other acquisition, and any Net Income resulting therefrom, shall be excluded
from this Section 4.5(a)(iv)(c) (1) and (c)(2); (x) the defeasance, redemption
or repurchase of Indebtedness with the net cash proceeds from an issuance of
permitted Refinancing Indebtedness or the substantially concurrent sale (other
than to a Subsidiary of the Company) of Capital Stock or other Equity Interests
of the Company or any Restricted Subsidiary (other than Disqualified Stock);
provided that any net cash proceeds that are utilized for any such defeasance,
--------
redemption or repurchase, and any Net Income resulting therefrom, shall be
excluded from this Section 4.5(a)(iv)(c)(1) and (c)(2); (xi) payments of fees,
expenses and indemnities in respect of the Company's and its Subsidiaries'
directors and such payments to Jordan
57
Industries, Inc., an Illinois corporation and corporate parent of the Company,
in respect of their directors, provided that the aggregate amount of such fees
--------
payable to all such directors does not exceed $250,000 in any fiscal year; (xii)
Restricted Investments received in consideration for the sale, transfer or
disposition by the Company or any Restricted Subsidiary of any business,
properties or assets belonging thereto, provided that the Company complies with
--------
Section 4.11; (xiii) any Restricted Investment constituting securities or
instruments of a Person issued in exchange for trade or other claims against
such Person in connection with a financial reorganization or restructuring of
such Person; (xiv) to the extent constituting Restricted Payments, payments and
transactions in connection with the Offering or the Company Formation; or (xv)
any Restricted Investment constituting an equity investment in a Receivables
Subsidiary, provided that the aggregate amount of such equity investments does
--------
not exceed $1,000,000.
SECTION 6 CORPORATE EXISTENCE.
-------------------
Subject to Section 4.11 and Article 5, the Company shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each of
its Restricted Subsidiaries in accordance with the respective organizational
documents of each of its Restricted Subsidiaries and the rights (charter and
statutory), licenses and franchises of the Company and each of its Restricted
Subsidiaries; provided, however, that the Company shall not be required to
-------- -------
preserve any such right, license or franchise, or the corporate, partnership or
other existence of any Restricted Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Restricted Subsidiaries taken as a whole,
and that the loss thereof is not adverse in any material respect to the Holders.
58
SECTION 7 LIMITATION ON TRANSACTIONS WITH
-------------------------------
AFFILIATES.
----------
(a) Except as otherwise set forth herein, neither the Company nor
any of its Restricted Subsidiaries shall make any loan, advance, guarantee or
capital contribution to, or for the benefit of, or sell, lease, transfer or
dispose of any properties or assets to, or for the benefit of, or purchase or
lease any property or assets from, or enter into or amend any contract,
agreement or understanding with, or for the benefit of, an Affiliate (each such
transaction or series of related transactions that are part of a common plan, an
"Affiliate Transaction"), except in good faith and on terms that are no less
---------------------
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction on an arm's length basis
from an unrelated Person.
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Affiliate Transactions involving aggregate
payments or other transfers by the Company and its Restricted Subsidiaries in
excess of $5,000,000 (including cash and non-cash payments and benefits valued
at their fair market value by the Board of Directors in good faith), unless the
Company delivers to the Trustee: (i) a resolution of the Board of Directors
stating that the Board of Directors (including a majority of the disinterested
directors, if any) has, in good faith, determined that such Affiliate
Transaction complies with the provisions of this Indenture; and (ii)(A) with
respect to any Affiliate Transaction involving the incurrence of Indebtedness,
a written opinion of a nationally recognized investment banking or accounting
firm experienced in the review of similar types of transactions, (B) with
respect to any Affiliate Transaction involving the transfer of real property,
fixed assets or equipment, either directly or by a transfer of 50% or more of
the Capital Stock of a Restricted Subsidiary which holds any such real property,
fixed assets or equipment, a written appraisal from a nationally recognized
appraiser experienced in the review of similar types of transactions or (C) with
respect to any Affiliate Transaction not otherwise described in (A) or (B)
above, or in lieu of the opinions and appraisals referred to in (A) and (B)
above, a written certification from a nationally recognized professional or firm
experienced in
59
evaluating similar types of transactions, in each case, stating that the terms
of such transaction are fair to the Company or such Restricted Subsidiary, as
the case may be, and the Holders of the Subordinated Exchange Notes from a
financial point of view.
(c) Notwithstanding Sections 4.7(a) and (b), this Section 4.7 shall
not apply to: (i) transactions between the Company and any Restricted Subsidiary
or between Restricted Subsidiaries; (ii) payments expressly due under the New
Subsidiary Advisory Agreement, the New Subsidiary Consulting Agreement, the
Transition Agreement, the Properties Services Agreement and the Tax Sharing
Agreement; provided that any amendments, supplements, modifications,
--------
substitutions, renewals or replacements of the foregoing agreements are
approved by a majority of the Board of Directors (including a majority of
disinterested directors, if any) as fair to the Company and the Holders of the
Subordinated Exchange Notes; (iii) any Restricted Payments permitted pursuant to
Section 4.5; (iv) reasonable compensation paid to officers, employees or
consultants of the Company or any Subsidiary as determined in good faith by the
Company's Board of Directors or executives; (v) transactions in connection with
a Receivables Financing; or (vi) payments and transactions in connection with
the Offering and the Company Formation.
SECTION 8 COMPLIANCE WITH LAWS, TAXES.
---------------------------
The Company shall, and shall cause each of its Restricted Subsidiaries to,
comply with all statutes, laws, ordinances, or government rules and regulations
to which it is subject, the non-compliance with which would materially adversely
affect the business, prospects, earnings, properties, assets or condition,
financial or otherwise, of the Company and its Restricted Subsidiaries taken as
a whole.
The Company shall, and shall cause each of its Restricted Subsidiaries to,
pay prior to delinquency all taxes, assessments and governmental levies, except
those contested in good faith by appropriate proceedings.
60
SECTION 9 MAINTENANCE OF OFFICE OR AGENCIES.
---------------------------------
The Company shall maintain in the Borough of Manhattan, the City of
New York an office or an agency (which may be an office of any Agent) where
Subordinated Exchange Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company in respect of the
Subordinated Exchange Notes and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of any change in the location of such
office or agency. If at any time the Company shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office.
The Company may also from time to time designate one or more other
offices or agencies where the Subordinated Exchange Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
-------- -------
any manner relieve the Company of its obligation to maintain an office or agency
in the Borough of Manhattan, the City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee located at First Trust National Association, 000 Xxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as one such office or agency of the Company in
accordance with Section 2.3.
SECTION 10 CHANGE OF CONTROL.
-----------------
(a) Upon the occurrence of a Change of Control, each Holder of
Subordinated Exchange Notes shall have the right to require the Company to
purchase all or any part (equal to $1,000 or an integral multiple there-of) of
such Holder's Subordinated Exchange Notes pursuant to an Offer at a purchase
price in cash equal to 101% of the aggregate principal amount thereof, plus any
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase.
61
(b) Prior to the mailing of the notice referred to in Section
3.8(a), but in any event within 30 days following any Change of Control, the
Company shall (i) repay in full and terminate all commitments under Indebtedness
under the New Credit Agreement and all other Senior Indebtedness the terms of
which require repayment upon a Change of Control or offer to repay in full and
terminate all commitments under all Indebtedness under the New Credit Agreement
and all such other Senior Indebtedness and to repay the Indebtedness owed to
each lender which has accepted such offer or (ii) obtain the requisite consents
under the New Credit Agreement and all such other Senior Indebtedness to permit
the repurchase of the Subordinated Exchange Notes as provided in Section 3.8(b).
The Company shall first comply with Section 4.13(b)(ii) before it shall be
required to repurchase Subordinated Exchange Notes pursuant to the provisions in
Section 3.8. The Company's failure to comply with this Section 4.10(b) shall
constitute an Event of Default described in clause (iii) and not in clause (ii)
under Section 6.1(a).
(c) In the event of a Change of Control, the Company shall not offer
to purchase or redeem any Subordinated Indebtedness required or entitled by its
terms to be redeemed or purchased until the Change of Control Offer for the
Subordinated Exchange Notes has been consummated and all Subordinated Exchange
Notes tendered pursuant to such Offer have been accepted for payment.
SECTION 11 LIMITATION ON ASSET SALES.
-------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale (including the
sale of any of the Capital Stock of any Restricted Subsidiary) providing for Net
Proceeds in excess of $2,500,000 unless at least 75% of the Net Proceeds from
such Asset Sale are applied (in any manner otherwise permitted by this
Indenture)to one or more of the following purposes in such combination as the
Company shall elect: (i) an investment in another asset or business in the same
line of business as, or a line of business similar to that of, the line of
business of the Company and its Restricted Subsidiaries at the time of the Asset
Sale; provided that such investment occurs on or prior to the 365th day
--------
following the date of such Asset Sale (the "Asset Sale Disposition
----------------------
62
Date"), (ii) to reimburse the Company or its Subsidiaries for expenditures made,
----
and costs incurred, to repair, rebuild, replace or restore property subject to
loss, damage or taking, to the extent that the Net Proceeds consist of insurance
proceeds received on account of such loss, damage or taking, (iii) the purchase,
redemption or other prepayment or repayment of outstanding Senior Indebtedness
of the Company or Indebtedness of the Company's Restricted Subsidiaries on or
prior to the 365th day following the Asset Sale Disposition Date or (iv) an
Offer expiring on or prior to the Purchase Date.
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate an Asset Sale unless at least
75% of the consideration thereof received by the Company or such Restricted
Subsidiary is in the form of cash, cash equivalents or marketable securities;
provided that, solely for purposes of calculating such 75% of the consideration,
--------
the amount of (i) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto, excluding
contingent liabilities and trade payables), of the Company or any Restricted
Subsidiary (other than liabilities that are by their terms subordinated to the
Subordinated Exchange Notes) that are assumed by the transferee of any such
assets and (ii) any notes or other obligations received by the Company or any
such Restricted Subsidiary from such transferee that are promptly, but in no
event more than 30 days after receipt, converted by the Company or such
Restricted Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash and cash equivalents for purposes of this provision. Any Net
Proceeds from any Asset Sale that are not applied or invested as provided in
Section 4.11(a) shall constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $10,000,000
(such date being an "Asset Sale Trigger Date"), subject to Section 10 hereof,
-----------------------
the Company shall make an Offer to all Holders of Subordinated Exchange Notes
to purchase the maximum principal amount of the Subordinated Exchange Notes then
outstanding that may be purchased out of Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount thereof plus any accrued
and unpaid interest and Liqui-
63
dated Damages, if any, to the Purchase Date in accordance with the procedures
set forth in this Indenture.
(d) To the extent that any Excess Proceeds remain after completion of
an Offer for Subordinated Exchange Notes, the Company may use such remaining
amount for general corporate purposes.
(e) If the aggregate principal amount of Subordinated Exchange Notes
surrendered by Holders there-of exceeds the amount of Excess Proceeds, the
Trustee shall select the Subordinated Exchange Notes to be purchased on a pro
rata basis, by lot or by a method that complies with the requirements of any
stock exchange on which the Subordinated Exchange Notes are listed and that the
Trustee considers fair and appropriate.
(f) Upon completion of an Offer related to an Asset Sale, the amount
of Excess Proceeds shall be reset at zero.
(g) Notwithstanding the foregoing, to the extent that any or all of
the Net Proceeds of an Asset Sale is prohibited or delayed by applicable local
law from being repatriated to the United States, the portion of such Net
Proceeds so affected will not be required to be applied pursuant to Section
4.11, but may be retained for so long, but only for so long, as the applicable
local law prohibits repatriation to the United States. The Company will promptly
take all reasonable actions required by the applicable local law to permit such
repatriation, and once such repatriation of any affected Net Proceeds is not
prohibited under applicable local law, such repatriation will be immediately
effected and such repatriated Net Proceeds will be applied in the manner set
forth above as if such Asset Sale had occurred on the date of repatriation.
SECTION 12 DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES.
---------------------------------------------------------
(a) From and after the date of original issuance of the Senior Notes
and the Discount Notes, the Company may designate any existing or newly formed
or acquired Subsidiary as a Non-Restricted Subsidiary, provided that (i) either
--------
(A) the Subsidiary to be so designated has total assets of $1,000,000 or less or
(B)
64
immediately before and after giving effect to such designation on a Pro Forma
Basis, (1) the Company could incur $1.00 of additional Indebtedness pursuant to
Section 4.7(a) of each of the Senior Notes Indenture and the Discount Notes
Indenture determined on a Pro Forma Basis; and (2) no Default or Event of
Default shall have occurred and be continuing, or shall occur as a consequence
thereof, and (ii) all transactions between the Subsidiary to be so designated
and its Affiliates remaining in effect are permitted pursuant to Section 4.8.
Any Investment made by the Company or any Restricted Subsidiary in a Subsidiary
which is redesignated from a Restricted Subsidiary to a Non-Restricted
Subsidiary shall be considered as having been a Restricted Payment (to the
extent not previously included as a Restricted Payment) made on the day such
Subsidiary is designated as a Non-Restricted Subsidiary in the amount of the
greater of (i) the fair market value (as determined by the Board of Directors of
the Company in good faith) of the Equity Interests of such Subsidiary held by
the Company and its Restricted Subsidiaries on such date, and (ii) the amount of
the Investments determined in accordance with GAAP made by the Company and any
of its Restricted Subsidiaries in such Subsidiary.
(b) A Non-Restricted Subsidiary may be redesignated as a Restricted
Subsidiary. The Company shall not, and shall not permit any Restricted
Subsidiary to, take any action or enter into any transaction or series of
transactions that would result in a Person becoming a Restricted Subsidiary
(whether through an acquisition, the redesignation of a Non-Restricted
Subsidiary or otherwise, but not including through the creation of a new
Restricted Subsidiary) unless, immediately before and after giving effect to
such action, transaction or series of transactions on a Pro Forma Basis, (i) the
Company could incur at least $1.00 of additional Indebtedness pursuant to
Section 4.7(a) of each of the Senior Notes Indenture and the Discount Notes
Indenture and (ii) no Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof.
(c) The designation of a Subsidiary as a Restricted Subsidiary or the
removal of such designation is required to be made by a resolution adopted by a
majority of the Board of Directors of the Company stating that the Board of
Directors has made such designation in
65
accordance with this Indenture, and the Company is required to deliver to the
Trustee such resolution together with an Officers' Certificate certifying that
the designation complies with this Indenture. Such designation shall be
effective as of the date specified in the applicable resolution, which may not
be before the date the applicable Officers' Certificate is delivered to the
Trustee.
(d) The sale and transfer of all of the Equity Interests in a foreign
Restricted Subsidiary to a Non-Restricted Subsidiary and the subsequent
redesignation of such foreign Restricted Subsidiary as a Non-Restricted
Subsidiary as contemplated by the definition of "Restricted Subsidiary" will
not be considered a redesignation of a Restricted Subsidiary for purposes of
this Section 4.12.
ARTICLE 5
SUCCESSORS
SECTION 1 MERGER OR CONSOLIDATION.
-----------------------
(a) The Company shall not consolidate or merge with or into, or sell,
lease, convey or otherwise dispose of all or substantially all of its assets to,
any Person(any such consolidation, merger or sale being a "Disposition") unless
-----------
(i) the successor corporation of such Disposition or the Person to which such
Disposition shall have been made is a corporation organized or existing under
the laws of the United States, any state thereof or the District of Columbia;
(ii) the successor corporation of such Disposition or the corporation to which
such Disposition shall have been made expressly assumes the Obligations of the
Company, pursuant to a supplemental indenture in a form reasonably satisfactory
to the Trustee, under the Indenture and the Subordinated Exchange Notes; (iii)
immediately after such Disposition, no Default or Event of Default shall exist;
and (iv) the corporation formed by or surviving any such Disposition, or the
corporation to which such Disposition shall have been made, shall (A) have
Consolidated Net Worth (immediately after the Disposition but prior to giving
effect on a Pro Forma Basis to any purchase accounting adjustments or
Restructuring Charges resulting from the Disposition) equal to or greater than
the Consolidated Net Worth of
66
the Company immediately preceding the Disposition, (B) be permitted immediately
after the Disposition by the terms of this Indenture to issue at least $1.00 of
additional Indebtedness determined on a Pro Forma Basis pursuant to Section
4.7(a) of each of the Senior Notes Indenture and the Discount Notes Indenture,
and (C) have a Cash Flow Coverage Ratio, for the four fiscal quarters
immediately preceding the applicable Disposition, determined on a Pro Forma
Basis, equal to or greater than the actual Cash Flow Coverage Ratio of the
Company for such four quarter period. The limitations in this Section 5.1(a) on
the Company's ability to make a Disposition do not restrict the Company's
ability to sell less than all or substantially all of its assets, such sales
being governed by Section 4.11.
(b) Prior to the consummation of any proposed Disposition, the
Company shall deliver to the Trustee an Officers' Certificate to the foregoing
effect and an Opinion of Counsel stating that the proposed Disposition and such
supplemental indenture comply with this Indenture.
SECTION 2 SUCCESSOR CORPORATION SUBSTITUTED.
---------------------------------
Upon any Disposition, the Successor Corporation resulting from such
Disposition shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such Successor has been named as the Company herein; provided, however, that
-------- -------
neither the Company nor any Successor Corporation shall be released from its
Obligation to pay the principal of, premium, if any, and accrued and unpaid
interest on, and Liquidated Damages, if any, with respect to the Subordinated
Exchange Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 1 EVENTS OF DEFAULT.
-----------------
(a) An Event of Default is:
(i) a default for 30 days in payment of interest on, or
Liquidated Damages, if any, with respect to, the Subordinated Exchange Notes;
67
(ii) a default in payment when due at maturity, upon
redemption or otherwise, of principal or premium, if any, with respect to, the
Subordinated Exchange Notes;
(iii) the failure of the Company to comply with any of its
other agreements or covenants in, or provisions of, this Indenture or the
Subordinated Exchange Notes outstanding and the Default continues for the
period, if applicable, and after the notice specified in Section 6.1(b);
(iv) a default by the Company or any Restricted Subsidiary
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any Restricted Subsidiary (or the payment of which is
guaranteed by the Company or any Restricted Subsidiary), whether such
Indebtedness or guarantee now exists or shall be created hereafter, if (A)
either (1) such default results from the failure to pay principal of or interest
on any such Indebtedness at the Stated Maturity thereof or upon such
Indebtedness becoming due upon the redemption thereof or otherwise and such
default continues for 30 days beyond any applicable grace period or (2) as a
result of such default the maturity of such Indebtedness has been accelerated
prior to its expressed maturity, and (B) the principal amount of such
Indebtedness, together with the principal amount of any other such Indebtedness
in default for failure to pay principal or interest thereon, at final maturity,
or because of the acceleration of the maturity thereof, aggregates in excess of
$10,000,000;
(v) a failure by the Company or any Restricted Subsidiary to
pay final judgments (not covered by insurance) aggregating in excess of
$10,000,000 which judgments a court of competent jurisdiction does not rescind,
annual or stay within 45 days after their entry and the Default continues for
the period and after the notice specified in Section 6.1(b);
68
(vi) in existence when 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
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; and
(vii) in existence when 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 in voluntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of the
property of the Company or any Significant Subsidiary,
or
(C) orders the liquidation of the Company or any Significant
Subsidiary,
and any such order or decree remains unstayed and in effect for
60 days.
(b) A Default or Event of Default under Section 6.1(a)(iii) (other
than an Event of Default arising under Section 5.1 which shall be an Event of
Default with the notice but without the passage of time specified in this
Section 6.1(b)) or Section 6.1(a)(v) is not an Event of Default under this
Indenture until the Trustee or the Holders of at least 25% in principal amount
of the Subordinated Exchange Notes then outstanding notify the Company of the
Default and the Company does not cure the Default within 45 days after receipt
of the notice. The
69
notice must specify the Default, demand that it be remedied, and state that the
notice is a "Notice of Default."
-----------------
(c) In the case of any Event of Default pursuant to Section 6.1(a)
or Section 6.1(b) occurring by reason of any willful action (or inaction) taken
(or not taken) by or on behalf of the Company with the intention of avoiding
payment of the premium that the Company would have to pay if the Company then
had elected to redeem the Subordinated Exchange Notes pursuant to paragraph 5 of
the Subordinated Exchange Notes, an equivalent premium shall also become and be
immediately due and payable to the extent permitted by law, anything in this
Indenture or in the Subordinated Exchange Notes contained to the contrary
notwithstanding.
(d) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless written notice thereof shall have been given to a Trust
Officer at the Corporate Trust Office of the Trustee by the Company or any other
Person.
SECTION 2 ACCELERATION.
------------
(a) Upon the occurrence of an Event of Default (other than an Event
of Default under Section 6.1(a)(vi) or (vii)), the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Subordinated Exchange
Notes may declare all Subordinated Exchange Notes to be due and payable
immediately and, upon such declaration, the principal of, premium, if any, and
any accrued and unpaid interest on, and Liquidated Damages, if any, with respect
to all Subordinated Exchange Notes shall be due and payable immediately;
provided, however, that if an Event of Default arises under Section 6.1(a)(vi)
-------- -------
or (vii), the principal of, and any accrued and unpaid interest on, all
Subordinated Exchange Notes, shall ipso facto become and be immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holders of Subordinated Exchange Notes.
(b) The Holders of a majority in principal amount of the
Subordinated Exchange Notes then outstanding, by notice to the Trustee, may
rescind any declaration of acceleration of such Subordinated Exchange Notes and
its consequences (if the rescission would not con-
70
flict with any judgment or decree) if all existing Events of Default (other than
the nonpayment of principal of or interest on such Subordinated Exchange Notes
that shall have become due by such declaration) shall have been cured or waived.
(c) If there has been a declaration of acceleration of the
Subordinated Exchange Notes because an Event of Default under Section 6.1(a)(iv)
has occurred and is continuing, such declaration of acceleration shall be
automatically annulled if the holders of the Indebtedness described in Section
6.1(a)(iv) have rescinded the declaration of acceleration in respect of such
Indebtedness within 30 Business Days thereof and if (i) the annulment of such
acceleration would not conflict with any judgment or decree of a court of
competent jurisdiction, (ii) all existing Events of Default, except non-payment
of principal or interest that shall have become due solely because of the
acceleration, have been cured or waived, and (iii) the Company has delivered an
Officers' Certificate to the Trustee to the effect of clauses (i) and (ii)
above.
SECTION 3 OTHER REMEDIES.
--------------
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of, premium, if
any, or any accrued and unpaid interest on, or Liquidated Damages, if any, with
respect to the Subordinated Exchange Notes or to enforce the performance of any
provision of the Subordinated Exchange Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Subordinated Exchange Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder in exercising any
right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All
remedies are cumulative to the extent permitted by law.
SECTION 4 WAIVER OF PAST DEFAULTS.
-----------------------
71
The holders of a majority in aggregate principal amount of the
Subordinated Exchange Notes then outstanding by notice to the Trustee may on
behalf of all Holders of Subordinated Exchange Notes waive any existing Default
or Event of Default under this Indenture and its consequences, except a
continuing Default in the payment of the principal of, premium, if any, and
interest on, and Liquidated Damages, if any, with respect to such Subordinated
Exchange Notes, which may only be waived with the consent of each Holder of
Subordinated Exchange Notes affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; provided that no such
--------
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.
SECTION 5 CONTROL BY MAJORITY.
-------------------
Subject to Section 7.1(e), the Holders of a majority in principal
amount of the then outstanding Subordinated Exchange Notes may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it by this Indenture.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Holders or would involve the Trustee in personal liability.
SECTION 6 LIMITATION ON SUITS.
-------------------
A Holder may pursue a remedy with respect to this Indenture or the
Subordinated Exchange Notes only if (i) the Holder gives to the Trustee notice
of a continuing Event of Default; (ii) the Holders of at least 25% in principal
amount of the then outstanding Subordinated Exchange Notes make a request to the
Trustee to pursue the remedy; (iii) such Holder or Holders offer to the Trustee
indemnity satisfactory to the Trustee against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days after receipt
of the request and the offer of indemnity; and (v) during such 60-day period the
Holders of a majority in principal amount of the then outstanding Subordinated
Exchange Notes do not give the Trustee a direction inconsistent with the
request.
72
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
Holders of the Subordinated Exchange Notes may not enforce this
Indenture, except as provided herein.
SECTION 7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
------------------------------------
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, and any accrued
and unpaid interest on, and Liquidated Damages, if any, with respect to a
Subordinated Exchange Note, on or after a respective due date expressed in the
Subordinated Exchange Note, or to bring suit for the enforcement of any such
payment on or after such respective date, shall not be impaired or affected
without the consent of the Holder.
SECTION 8 COLLECTION SUIT BY TRUSTEE.
--------------------------
If an Event of Default specified in Section 6.1(a)(i) or (ii) occurs
and is continuing, the Trustee is authorized to recover judgment in its own name
and as trustee of an express trust against the Company for (i) the principal,
premium and Liquidated Damages, if any, and interest remaining unpaid on the
Subordinated Exchange Notes, (ii) interest on overdue principal and premium, if
any, and, to the extent lawful, interest, and (iii) such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel ("Trustee Expenses").
----------------
SECTION 9 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 to have the claims of the Trustee
(including any claim for Trustee Expenses) and the Holders allowed in any
Insolvency or Liquidation Proceeding or other judicial proceeding relative to
the Company (or any other obligor upon the Subordinated Exchange Notes), its
creditors or its property and shall be entitled and empowered to collect,
receive and distribute to Holders any money or other property payable or
deliverable on any such claims
73
and each Holder authorizes any Custodian in any such Insolvency or Liquidation
Proceeding or other judicial proceeding to make such payments to the Trustee,
and if the Trustee shall consent to the making of such payments directly to the
Holders any such Custodian is hereby authorized to make such payments directly
to the Holders, and to pay to the Trustee any amount due to it hereunder for
Trustee Expenses, and any other amounts due the Trustee under Section 7.7. To
the extent that the payment of any such Trustee Expenses, and any other amounts
due the Trustee under Section 7.7 out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties which the Holders may be entitled to receive in
such proceeding, whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Subordinated Exchange Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
Insolvency or Liquidation Proceeding.
SECTION 10 PRIORITIES.
----------
If the Trustee collects any money pursuant to this Article, it shall
pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: to Holders for amounts due and unpaid on the Subordinated
Exchange Notes for principal, premium and Liquidated
Damages, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and
payable on the Subordinated Exchange Notes for principal,
premium and Liquidated Damages, if any, and interest,
respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
74
The Trustee may fix a record date and payment date for any payment to
Holders.
SECTION 11 UNDERTAKING FOR COSTS.
---------------------
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.7,
or a suit by Holders of more than 10% in principal amount of the then
outstanding Subordinated Exchange Notes.
ARTICLE 7
TRUSTEE
SECTION 1 DUTIES OF TRUSTEE.
-----------------
(a) If an Event of Default occurs (and has not been cured) the
Trustee shall (i) exercise the rights and powers vested in it by this Indenture,
and (ii) use the same degree of care and skill in exercising such rights and
powers as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the
75
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 they
conform to this Indenture's requirements.
(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:
(i) this paragraph does not limit the effect of Section 7.1(b);
(ii) 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
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction it
receives pursuant to Section 6.5.
(d) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (e) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders unless such Holders shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money it
receives except as the Trustee may agree in writing with the Company. Money the
Trustee holds in trust need not be segregated from other funds except to the
extent required by law.
SECTION 2 RIGHTS OF TRUSTEE.
-----------------
76
(a) The Trustee may rely on any document it believes to be genuine
and to have been signed or presented by the proper Person. The Trustee shall
not be obligated to investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
reasonably require an Officers' Certificate or an Opinion of Counsel, or both.
The Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(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, except to the extent that such action or omission to act constitutes
negligence or wilful misconduct on the part of the Trustee.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer.
(f) Except with respect to Section 4.1, the Trustee shall have no duty
to inquire as to the performance by the Company with respect to the covenants
contained in Article 4. In addition, the Trustee shall not be deemed to have
knowledge of a Default or Event of Default except (i) any Default or Event of
Default occurring pursuant to Sections 4.1, 6.1(a)(i) or 6.1(a)(ii), or (ii)
any Default or Event of Default of which the Trustee shall have received written
notification or obtained actual knowledge.
SECTION 3 INDIVIDUAL RIGHTS OF TRUSTEE.
----------------------------
The Trustee in its individual or any other capacity may become the
owner or pledgee of Subordinated Exchange
77
Notes and may otherwise deal with the Company or an Affiliate with the same
rights it would have if it were not Trustee. However, if the Trustee acquires
any conflicting interest it must eliminate such conflict within 90 days, apply
to the Commission for permission to continue as Trustee or resign. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.
SECTION 4 TRUSTEE'S DISCLAIMER.
--------------------
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Subordinated Exchange
Notes, it shall not be accountable for the Company's use of the proceeds from
the Subordinated Exchange Notes or for any money paid to the Company or upon the
Company's direction under any provisions hereof, it shall not be responsible for
the use or application of any money any Paying Agent other than the Trustee
receives, and it shall not be responsible for any statement or recital herein or
any statement in the Subordinated Exchange Notes or any other document furnished
or issued in connection with the sale of the Subordinated Exchange Notes or
pursuant to this Indenture, other than its certificate of authentication.
SECTION 5 NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT.
---------------------------------------------------
If a Default or Event of Default occurs and is continuing and if it is
actually known to the Trustee, the Trustee shall mail to Holders a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment on any Subordinated Exchange Note
(including any failure to redeem Subordinated Exchange Notes called for
redemption or any failure to purchase Subordinated Exchange Notes tendered
pursuant to an Offer that are required to be purchased by the terms of this
Indenture), 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 Holders' interests.
SECTION 6 REPORTS BY TRUSTEE TO HOLDERS.
-----------------------------
Within 60 days after each May 15 beginning with May 15, 1998, the
Trustee shall mail to Holders a brief
78
report dated as of such reporting date that complies with section 313(a) of the
TIA (but if no event described in section 313(a) of the TIA has occurred within
the twelve months preceding the reporting date, no report need be transmitted).
The Trustee also shall comply with section 313(b)(2) of the TIA. The Trustee
shall also transmit by mail all reports as required by section 313(c) of the
TIA.
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to Holders shall be filed with
the SEC and each national securities exchange on which the Subordinated Exchange
Notes are listed. The Company shall notify the Trustee when the Subordinated
Exchange Notes are listed on any national securities exchange.
SECTION 7 COMPENSATION AND INDEMNITY.
--------------------------
The Company shall pay to the Trustee (in its capacities as Trustee,
Paying Agent and/or Registrar) from time to time reasonable compensation for its
services hereunder. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable disbursements, advances, fees and
expenses it incurs or makes in addition to the compensation for its services.
Such expenses shall include the reasonable compensation, disbursements and
expenses of the Trustee's agents and counsel.
The Company shall indemnify and hold harmless the Trustee (in its
capacities as Trustee, Paying Agent and/or Registrar) against any and all
losses, liabilities or expenses the Trustee incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, except as set forth below. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee
to so notify the Company shall not relieve the Company of its Obligations
hereunder. The Company shall defend the claim and the Trustee shall reasonably
cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
79
The Company's Obligations under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability the Trustee incurs through negligence or bad faith.
To secure the Company's payment of its Obligations in this Section,
the Trustee shall have a Lien prior to the Subordinated Exchange Notes on all
money or property the Trustee holds or collects. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(a)(vii) or (viii) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute administrative expenses under any
Bankruptcy Law.
SECTION 8 REPLACEMENT OF TRUSTEE.
----------------------
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company. The Holders of a majority in principal amount of
the then outstanding Subordinated Exchange Notes may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10;
(ii) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(iii) a Custodian or public officer takes charge of the Trustee
or its property; or
80
(iv) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee, provided that the Holders of a majority in principal amount of the then
--------
outstanding Subordinated Exchange Notes may appoint a successor Trustee to
replace any successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Subordinated
Exchange Notes 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 Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
appointment to Holders. The retiring Trustee shall promptly transfer all
property it holds as Trustee to the successor Trustee, provided all sums owing
--------
to the retiring Trustee hereunder have been paid and subject to the Lien
provided for in Section 7.7. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7 shall
continue for the retiring Trustee's benefit with respect to expenses and
liabilities it incurred prior to being replaced.
SECTION 9 SUCCESSOR TRUSTEE BY MERGER, ETC.
--------------------------------
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the succes-
81
sor corporation without any further act shall be the successor Trustee.
SECTION 10 ELIGIBILITY; DISQUALIFICATION.
-----------------------------
The Trustee shall at all times (i) be a corporation organized and
doing business under the laws of the United States of America, of any state
thereof, or the District of Columbia authorized under such laws to exercise
corporate trustee power, (ii) be subject to supervision or examination by
federal or state authority, (iii) have a combined capital and surplus of at
least $25,000,000, or be a member of a bank holding company which has a combined
capital and surplus of at least $100,000,000, as set forth in its most recent
published annual report of condition, and (iv) satisfy the requirements of
sections 310(a)(1), (2) and (5) of the TIA. The Trustee is subject to section
310(b) of the TIA.
SECTION 11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
-----------------------------------------------------
The Trustee is subject to section 311(a) of the TIA, excluding any
creditor relationship listed in section 311(b) of the TIA. A Trustee who has
resigned or been removed shall be subject to section 311(a) of the TIA to the
extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 1 DISCHARGE OF LIABILITY ON SUBORDINATED EXCHANGE NOTES; DEFEASANCE.
-----------------------------------------------------------------
(a) When (i) the Company delivers to the Trustee all outstanding
Subordinated Exchange Notes (other than Subordinated Exchange Notes replaced
pursuant to Section 2.7) for cancellation, or (ii) all outstanding Subordinated
Exchange Notes have become due and payable and the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity all outstanding
Subordinated Exchange Notes, including interest, premium and Liquidated Damages
thereon (other than Subordinated Exchange Notes replaced pursuant to Section
2.7), and if in either case the Company pays all other sums payable under this
Indenture by the Company, then this Indenture
82
shall, subject to Sections 8.1(c) and 8.6, cease to be of further effect.
(b) Subject to Sections 8.1(c), 8.2 and 8.6, the Company at any time
may terminate (i) all its obligations under the Subordinated Exchange Notes and
this Indenture ("legal defeasance option") or (ii) its obligations under
-----------------------
Sections 4.2, 4.3, 4.5, 4.6, 4.7, 4.8, 4.9, 4.10, 4.11 and 4.12 and the
operation of Sections 5.1(a)(iii), 5.1(a)(iv), or 6.1(a)(iii) through (a)(vi)
("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
Subordinated Exchange Notes may not be accelerated because of an Event of
Default. If the Company exercises its covenant defeasance option, payment of
the Subordinated Exchange Notes shall not be accelerated because of an Event of
Default specified in 6.1(a)(iii) through (a)(vi) or because of the Company's
failure to comply with Section 5.1(a)(iii) and 5.1(a)(iv).
Upon satisfaction of the conditions set forth herein and upon the
Company's request (and at the Company's expense), the Trustee shall acknowledge
in writing the discharge of those obligations that the Company has terminated.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.3, 2.4, 2.5, 2.6, 2.7, 4.1, 4.4, 7.7, 7.8, 8.4, 8.5
and 8.6, and the Trustee's and the Paying Agent's obligations in Section 8.4
shall survive until the Subordinated Exchange Notes have been paid in full.
Thereafter, the Company's obligations in Sections 7.7 and 8.5 and the
Company's, the Trustee's and the Paying Agent's obligations in Section 8.4 shall
survive.
SECTION 2 CONDITIONS TO DEFEASANCE.
------------------------
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
(1) the Company irrevocably deposits in trust (the "defeasance
trust") with the Trustee
83
money or U.S. Government Obligations sufficient for the payment
in full of the principal of, premium, if any, and any accrued
and unpaid interest on, and Liquidated Damages, if any, with
respect to the Subordinated Exchange Notes then outstanding, as
of the maturity date, the redemption date or the Purchase Date,
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 of 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 when due principal of, premium, if any, and
any accrued and unpaid interest on, and Liquidated Damages, if
any, with respect to all the Subordinated Exchange Notes to
maturity or redemption, as the case may be;
(3) since the Company's irrevocable deposit provided for in Section
8.2(l), 91 days have passed;
(4) no Default has occurred and is continuing on the date of such
deposit and after giving effect to it;
(5) the deposit does not constitute a default under any other
agreement binding on the Company;
(6) 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, as amended;
(7) in the case of the legal defeasance option, the Company shall
have delivered to
84
the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) under applicable federal income
tax law, in either case, to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders will not
recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance and will be subject
to federal income tax on the same amount, in the same manner and
at the same times as would have been the case if such defeasance
had not occurred;
(8) 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 Holders will not recognize income, gain or loss
for federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to federal income tax on
the same amount, in the same manner and at the same times as
would have been the case if such covenant defeasance had not
occurred (and, in the case of legal defeasance only, such
opinion of counsel must be based on a ruling of the Internal
Revenue Service or other change in applicable federal income tax
law); and
(9) 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 Subordinated
Exchange Notes contemplated by this Article 8 have been
satisfied.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption or purchase of Subordinated
Exchange Notes at a future date in accordance with Article 3.
SECTION 3 APPLICATION OF TRUST MONEY.
--------------------------
85
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, premium, if any,
and any accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to the Subordinated Exchange Notes.
SECTION 4 REPAYMENT TO THE COMPANY.
------------------------
After the Subordinated Exchange Notes have been paid in full, the
Trustee and the Paying Agent shall promptly turn over to the Company any excess
money or securities they hold.
The Trustee and the Paying Agent shall pay to the Company upon written
request by the Company any money they hold for the payment of principal,
premium, interest or Liquidated Damages that remains unclaimed for 1 year after
the date upon which such payment shall have become due; provided, however, that
-------- -------
the Company shall have either caused notice of such payment to be mailed to each
Holder entitled thereto no less than 30 days prior to such repayment or within
such period shall have published such notice in a financial newspaper of
widespread circulation published in The City of New York (including, without
limitation, The Wall Street Journal). After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money shall
cease.
SECTION 5 INDEMNITY FOR GOVERNMENT OBLIGATIONS.
------------------------------------
The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.
SECTION 6 REINSTATEMENT.
-------------
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 by reason of any legal
proceeding or
86
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 Subordinated Exchange Notes 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 principal of,
-------- -------
premium, if any, and any accrued and unpaid interest on, and Liquidated
Damages, if any, with respect to any Subordinated Exchange Notes because of the
reinstatement of its Obligations, the Company shall be subrogated to the
Holders' rights to receive such payment from the money or U.S. Government
Obligations the Trustee or Paying Agent holds.
ARTICLE 9
AMENDMENTS
SECTION 1 AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT CONSENT OF HOLDERS.
---------------------------------------------------------------
Notwithstanding Section 9.2, the Company and the Trustee may amend or
supplement this Indenture or the Subordinated Exchange Notes without the consent
of any Holder (a) to cure any ambiguity, defect or inconsistency; (b) to
provide for uncertificated Subordinated Exchange Notes in addition to or in
place of certificated Subordinated Exchange Notes; (c) to provide for the
assumption of the Company's Obligations in the event of a Disposition pursuant
to Article 5; (d) to comply with the SEC's requirements to effect or maintain
the qualification of this Indenture under the TIA; (e) to provide for
additional Guarantees with respect to the Subordinated Exchange Notes; or (f) to
make any change that does not materially adversely affect any Holder's legal
rights under this Indenture.
Upon the Company's request, after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any amended
or supplemental indenture and the documents described in Section 9.6, the
Trustee shall join with the Company in the execution of any amended or
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any
87
further appropriate agreements and stipulations that may be contained in any
such amended or supplemental indenture, but the Trustee shall not be obligated
to enter into an amended or supplemental indenture that affects its own rights,
duties or immunities under this Indenture or otherwise.
SECTION 2 AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS.
-------------------------------------------------------
Subject to Section 6.7, the Company and the Trustee may amend or
supplement this Indenture or the Subordinated Exchange Notes with the written
consent of the Holders of at least a majority in principal amount of the then
outstanding Subordinated Exchange Notes (including consents obtained in
connection with a tender offer or exchange offer for the Subordinated Exchange
Notes). Subject to Sections 6.4 and 6.7, the Holders of a majority in principal
amount of the Subordinated Exchange Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the
Subordinated Exchange Notes) may also waive any existing Default or Event of
Default (other than a payment Default) and its consequences or compliance in a
particular instance by the Company with any provision of this Indenture or the
Subordinated Exchange Notes.
Upon the Company's request and after receipt by the Trustee of a
resolution of the Board of Directors authorizing the execution of any
supplemental indenture, evidence of the Holders' consent, and the documents
described in Section 9.6, the Trustee shall join with the Company in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment or waiver, but
it shall be sufficient if such consent approves the substance thereof
After an amendment or waiver under this Section becomes effective, the
Company shall mail to each Holder affected thereby a notice briefly describing
the amend-
88
ment, supplement or waiver. Any failure of the Company to mail such notice, or
any defect therein, shall not, however, in any way impair or affect the validity
of any such amended or supplemental indenture or waiver. Without the consent of
each Holder affected, an amendment, supplement or waiver under this Section may
not (1) reduce the principal amount of Subordinated Exchange Notes whose Holders
must consent to an amendment, supplement or waiver; (2) reduce the rate of or
change the time for payment of interest, including default interest as set forth
in Section 4.1, or Liquidated Damages on any Subordinated Exchange Note or alter
the redemption or purchase provisions with respect thereto or the price at which
the Company is required to offer to purchase any Subordinated Exchange Note; (3)
reduce the principal of or change the fixed maturity of any Subordinated
Exchange Note; (4) make any Subordinated Exchange Note payable in money other
than that stated in the Subordinated Exchange Note; (5) make any change in
Section 6.4 or 6.7 or in this sentence of this Section 9.2; or (6) waive a
default in the payment of the principal of, or premium, if any, or any accrued
and unpaid interest on, or Liquidated Damages, if any, with respect to, or
redemption or purchase payment with respect to, any Subordinated Exchange Note
(except a rescission of acceleration of the Subordinated Exchange Notes by the
Holders of at least a majority in aggregate principal amount of the then
outstanding Subordinated Exchange Notes and a waiver of the payment default that
resulted from such acceleration).
SECTION 3 COMPLIANCE WITH TIA.
-------------------
Every amendment or supplement to this Indenture or the Subordinated
Exchange Notes shall be set forth in an amended supplemental indenture that
complies with the TIA as then in effect.
SECTION 4 REVOCATION AND EFFECT OF CONSENTS.
---------------------------------
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Subordinated Exchange Note is a continuing consent by the
Holder and every subsequent Holder of a Subordinated Exchange Note or portion of
a Subordinated Exchange Note that evidences the same Indebtedness as the
consenting Holder's Subordinated Exchange Note, even if notation of the consent
is not made on any Subordinated Exchange Note. However, any
89
such Holder or subsequent Holder may revoke the consent as to his or her
Subordinated Exchange Note or portion of a Subordinated Exchange Note if the
Trustee receives the notice of revocation before the date on which the Trustee
receives an Officers' Certificate certifying that the Holders of the requisite
principal amount of Subordinated Exchange Notes have consented to the amendment
or waiver.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Subordinated Exchange Notes entitled
to consent to any amendment or waiver. If a record date is fixed, then,
notwithstanding the provisions of the immediately preceding paragraph, those
Persons who were Holders of Subordinated Exchange Notes at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
consent to such amendment or waiver or to revoke any consent previously given,
whether or not such Persons continue to be Holders of Subordinated Exchange
Notes after such record date. No consent shall be valid or effective for more
than 90 days after such record date unless consents from Holders of the
principal amount of Subordinated Exchange Notes required hereunder for such
amendment or waiver to be effective shall have also been given and not revoked
within such 90-day period.
After an amendment or waiver becomes effective it shall bind every
Holder, unless it is of the type described in any of clauses (1) through (6) of
Section 9.2. In such case, the amendment or waiver shall bind each Holder who
has consented to it and every subsequent Holder of a Subordinated Exchange Note
that evidences the same debt as the consenting Holder's Subordinated Exchange
Note.
SECTION 5 NOTATION ON OR EXCHANGE OF SUBORDINATED EXCHANGE NOTES.
------------------------------------------------------
The Trustee may (at the Company's expense) place an appropriate
notation about an amendment, supplement or waiver on any Senior Note thereafter
authenticated. The Company in exchange for all Subordinated Exchange Notes may
issue and the Trustee shall authenticate new Subordinated Exchange Notes that
reflect the amendment, supplement or waiver.
90
Failure to make the appropriate notation or issue a new Subordinated
Exchange Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 6 TRUSTEE PROTECTED.
-----------------
The Trustee shall sign any amendment or supplemental indenture 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 or supplemental
indenture, the Trustee shall be entitled to receive and, subject to Section 7.1,
shall be fully protected in relying upon, an Officers' Certificate and Opinion
of Counsel as conclusive evidence that such amendment or supplemental indenture
is authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company in accordance
with its terms. The Company may not sign an amendment or supplemental indenture
until the Board of Directors approves it.
SECTION 7 AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS OF SENIOR
-----------------------------------------------------------------
INDEBTEDNESS.
------------
No amendment or modification to Article 10, this Section 9.7 or Section
11.6 may be made to this Indenture without the consent of holders of at least a
majority of the outstanding principal amount of each class of Designated Senior
Indebtedness that would be adversely affect ed by such amendment or modification
(the Senior Notes and the Discount Notes, Senior Indebtedness issued under the
New Credit Agreement, and any other Designated Senior Indebtedness shall each be
a separate class); provided, however, that if some but not all classes of
-------- -------
Designated Senior Indebtedness consent to any such amendment or modification,
such amendment or modification shall be effective with respect to each
consenting class.
ARTICLE 10
SUBORDINATION
SECTION 1 AGREEMENT TO SUBORDINATE.
-------------------------
The Company agrees, and each Holder by accepting a Subordinated Exchange
Note agrees, any provision of this
91
Indenture or Subordinated Exchange Notes to the contrary notwithstanding, that
all Obligations owned under and in respect of Subordinated Exchange Notes are
subordinated in right of payment, to the extent and in the manner provided in
this Article, to the prior payment in full in cash of all Obligations owed under
and in respect of all Senior Indebtedness, and that the subordination is for the
benefit of all holders of all Senior Indebtedness, whether outstanding on the
date of original Issuance of the Subordinated Exchange Notes or immediately
thereafter.
For this Article 10, a distribution may consist of cash, securities or
other property, by set-off or other wise.
SECTION 2 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
------------------------------------
(a) Upon any payment or distribution of assets of any kind or
character, whether in cash, property or securities, to creditors in any
Insolvency or Liquidation Proceeding with respect to the Company, no payment or
distribution shall be made on the account of the Subordinated Exchange Notes
until all amounts due or to become due under or with respect to any Senior
Indebtedness (including any Post-Petition Interest) shall first be paid in cash
in full. Upon any such Insolvency or Liquidation Proceedings any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders or the Trustee would be entitled
except for the provisions hereof shall be paid by the Company or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee if
received by them, directly to the holders of Senior Indebtedness (pro rata to
such holders on the basis of the amounts of Senior Indebtedness such holders
hold) or their Representative or Representatives, as their interests may appear,
for application to the payment of Senior Indebtedness remaining unpaid until
all such Senior Indebtedness has been paid in full in cash, after giving effect
to any concurrent payment, distribution or provision therefor to or for the
holders of Senior Indebtedness.
(b) A disposition or the liquidation or dissolution of the company
following a Disposition to another
92
Person upon the terms and conditions provided in Article 5 shall not be deemed a
dissolution, winding-up liquidation or reorganization for the purposes of this
Section if such Disposition complies with the Conditions stated in Article 5.
SECTION 3 DEFAULT ON SENIOR INDEBTEDNESS.
------------------------------
(a) Upon and during the continuation of any default in the payment of
principal of, or premium, if any, or interest on, any Senior Indebtedness, or
any Obligation owing under or in respect of Senior Indebted ness, or if any
event of default other than a payment default with respect to any Senior
Indebtedness shall have occurred and be continuing and shall have resulted in
such Senior Indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable, or
(b) If any event of default other than as described in Section
10.3(a) with respect to any Designated Senior Indebtedness shall have occurred
and be continuing permitting the holders of such Designated Senior Indebtedness
(or their Representative) to declare such Designated Senior Indebtedness due
and payable prior to the date on which it would otherwise have become due and
payable,
then no Payment shall be made by or on behalf of the Company on account of the
of the Subordinated Exchange Notes in case of:
(i) any payment or nonpayment event of default specified in 10.3(a)
unless and until such event of default shall have been cured or waived in
writing in accordance with the instruments governing such Designated Senior
Indebtedness or such acceleration shall have been rescinded or annulled, or
(ii) any nonpayment of default specified in 10.3(b), during the period
(a "Payment Blockage Period") commencing on the date the Company and the
Trustee receive written notice (a "Payment Notice") of such event of
default (which notice shall be binding on the Trustee and the Holders as to
the occurrence of such an event of default from any holders of Designated
Senior Indebtedness or a
93
Representative of such holders) and ending on the earliest of:
(A) 179 days after such date,
(B) the date, if any, on which such Designated Senior
Indebtedness to which such default relates is paid in full
or such default is cured or waived in writing in accordance
with the instruments governing such Designated Senior
Indebtedness by the holders of such Designated Senior
Indebtedness, and
(C) the date on which the Trustee receives written notice from
the holders of Designated Senior Indebtedness (or a
Representative of such holders) that commenced the Payment
Blockage Period gives written notice that the Payment
Blockage Period has been terminated.
During any consecutive 360-day period, the aggregate of all Payment Blockage
Periods shall not exceed 179 days and there shall be a period of at least 181
consecutive days in each consecutive 360-day period when no Payment Blockage
Period is in effect. For all purposes of this Section 10.3, no event of default
that existed or was continuing with respect to the Senior Indebtedness with
respect to which notice commencing a Payment Blockage Period was given on the
date such Payment Blockage Period commenced shall be, or be made, the basis for
the commencement of any subsequent Payment Blockage Period unless such event of
default is cured or waived for a period of not less than 90 consecutive days.
SECTION 4 ACCELERATION OF THE SUBORDINATED EXCHANGE NOTES.
-----------------------------------------------
If payment of the Subordinated Exchange Notes is accelerated because of an
Event of Default, the Company shall promptly notify the Credit Agent and each
holder of Senior Indebtedness of the acceleration.
SECTION 5 WHEN DISTRIBUTION MUST BE PAID OVER.
-----------------------------------
94
If the Company shall make any payment to the Trustee on account of the
principal of, or premium, if any, or interest on, the Subordinated Exchange
Notes, or any other Obligation in respect of the Subordinated Exchange Notes, or
the Holders shall receive from any source any payment on account of the
principal of, or premium, if any, or interest on, the Subordinated Exchange
Notes or any Obligation in respect of the Subordinated Exchange Notes, at a time
when such payment is prohibited by this Article 10, the Trustee or such Holders
shall hold such payment in trust for the benefit of, and shall be paid forthwith
over and delivered to, the holders of Senior Indebtedness (pro rata as to each
of such holders on the basis of the respective amounts of Senior Indebtedness
they hold) or their Representative or the trustee under the indenture or other
agreement (if any) pursuant to which Senior Indebtedness may have been Issued,
as their respective interests may appear, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform only such obligations on its part as are specifically set forth in
this Article 10, and no implied covenants or obligations with respect to the
holders of Senior Indebtedness shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders if the Trustee shall pay over or distribute to or on behalf of Holders
or the Company or any other Person money or assets to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article 10, except if
such payment is made at a time when a Trust Officer has knowledge that the
terms of this article 10 prohibit such payment.
SECTION 6 NOTICE.
------
Neither the Trustee nor the paying Agent shall at any tine be charged with
the knowledge of the existence of any facts that would prohibit the making of
any payment to or by the Trustee or Paying Agent under this Article 10, unless
and until the Trustee or Paying Agent shall be received written notice thereof
form the Company
95
or one or more holders of senior Indebtedness or a Representative of any
holders of Senior Indebtedness; and, prior to the receipt of any such written
notice, the Trustee or Paying Agent shall be entitled to assume conclusively
that no such facts exist. The Trustee shall be entitled to rely on the delivery
to it of written notice by a Person representing itself to be a holder of Senior
Indebtedness (or a representative thereof) to establish that such notice has
been given.
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts it knows that would cause a payment of principal of, or
premium, if any, or interest on, the Subordinated Exchange Notes or any other
Obligation in respect of the Subordinated Exchange Notes to violate this Article
10, but failure to give such notice shall not affect the subordination of the
Subordinated Exchange Notes to the Senior Indebtedness provided in this Article
10 or the rights of holders of Senior Indebtedness under this Article 10.
SECTION 7 SUBROGATION.
-----------
After all Senior Indebtedness is paid in full in cash and until the
Subordinated Exchange Notes are paid in full, Holders shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the
Subordinated Exchange Notes) to the rights of holders of Senior Indebtedness to
receive distributions applicable to Senior Indebtedness to the extent that
distributions otherwise payable to the Holders have been applied to the payment
of Senior Indebtedness. A distribution made under this Article 10 to the holders
of Senior Indebted ness that otherwise would have been to Holders is not, as
between the Company and Holders, a payment by the Company on the Senior
Indebtedness.
SECTION 8 RELATIVE RIGHTS.
---------------
This Article 10 defines the rights of Holders and holders of Senior
Indebtedness. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the Company's
Obligations, which are absolute and unconditional, to pay
principal of, and premium, if
96
any, and interest on, the Subordinated Exchange Notes in
accordance with their terms;
(2) affect the relative rights of Holders and the Company's creditors
other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Holder from exercising its available
remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders.
Nothing contained in this Article 10 or else where in this Indenture
or in any Security is intended to or shall impair, as between the Company and
the Holders, the obligations of the Company, which are absolute and
unconditional to pay to the Holders the principal of, and premium, if any, and
interest on, the Subordinated Exchange Notes as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders and creditors of the Company other
than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture, subject to the
rights, if any, under this Article 10 of the holders of such Senior
Indebtedness.
The failure to make a payment on account of principal of, or interest
on, the Subordinated Exchange Notes by reason of any provisions of this Article
10 shall not be construed as preventing the occurrence of any Event of Default
under Section 6.1.
97
SECTION 9 THE COMPANY AND HOLDERS MAY NOT IMPAIR SUBORDINATION.
----------------------------------------------------
(a) No right of any holder of Senior Indebtedness to enforce the
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the Company's part or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture or the Subordinated Exchange Notes or any other agreement regardless
of any knowledge thereof with which any such holder may have or be otherwise
charged.
(b) Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness, or any of them, may, at any time
and from time to time, without the consent of or notice to the Holders, without
incurring any liabilities to any Holder and without impairing or releasing the
subordination and other benefits provided in this Indenture or the Holder's
obligations to the holders of Senior Indebtedness, even if any Holder's right of
reimbursement or subrogation or other right or remedy is affected, impaired or
extinguished thereby, do any one or more of the following:
(i) change the manner, place or terms of payment or change or
extend the time of payment of, or renew, exchange, amend, increase or
alter, the terms of any Senior Indebtedness, any security therefor or
guarantee thereof or any liability of any obligor thereon (including any
guarantor) to such holder, or any liability Issued in respect thereof or
otherwise amend, renew, exchange, extend, modify, increase or supplement in
any manner any Senior Indebtedness or any instrument evidencing or
guaranteeing or securing the same or any agreement under which Senior
Indebtedness is outstanding:
(ii) sell, exchange, release, surrender, realize upon, enforce
or otherwise deal with in any manner and in any order any property pledged,
mortgaged or otherwise securing Senior Indebtedness or any liability of
any obligor thereon, to such holder, or any liability Issued in respect
thereof;
(iii) settle or compromise any Senior Indebtedness or any other
liability of any obligor of
98
the Senior Indebtedness to such holder or any security therefor or any
liability Issued in respect thereof and apply any sums by whomsoever paid
and however realized to any liability (including, without limitation,
Senior Indebtedness) in any manner or order; and
(iv) fail to take or to record or otherwise perfect, for any
reason or for no reason, any lien or security interest securing Senior
Indebtedness by whomsoever granted, exercise or delay in or refrain from
exercising any right or remedy against any obligor or any guarantor or any
other Person, elect any remedy and otherwise deal freely with any obligor
and any security for the Senior Indebtedness or any liability of any
obligor to such holder or any liability Issued in respect thereof.
(c) Each Holder by accepting a Subordinated Exchange Note agrees not
to compromise, release, forgive or otherwise discharge the Obligations of the
Company with respect to his or her Subordinated Exchange Note unless holders of
a majority of the outstanding amount of each class of Senior Indebtedness (as
described in Section 9.7) consent to such compromise, release, forgiveness or
other discharge.
SECTION 10 DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
----------------------------------------
Whenever a distribution is to be made or a notice given to holders of
Senior Indebtedness, the distribution may be made and the notice to their
Representative, if any.
If any payment or distribution of the Company assets is required to be made
to holders of Senior Indebtedness pursuant to this Article 10, the Trustee and
the Holders shall be entitled to rely upon any order or decree of any court of
competent jurisdiction, or upon any certificate of a Representative of Senior
Indebtedness or a Custodian, in ascertaining the holders of Senior Indebtedness
entitled to participate in any such payment or distribution, the amount payable
to be paid or distributed filed to holders of Senior Indebtedness and all other
facts pertinent thereto or to this Article 10.
99
SECTION 11 RIGHTS OF TRUSTEE AND PAYING AGENT.
----------------------------------
The Trustee or Paying Agent may continue to make payments on the
Subordinated Exchange Notes unless at least three Business Days prior to any
payment date it has received written notice of facts that would cause a payment
of principal of, or premium, if any, or interest on, the Subordinated Exchange
Notes to violate this Article. Only the Company, a Representative of Senior
Indebtedness, or a holder of Senior Indebtedness that has not Representative may
give such notice.
To the extent permitted by the TIA, the Trustee in its individual or any
other capacity may hold Indebted ness (including Senior Indebtedness) with the
same rights it would have if it were not Trustee. Any Agent may do the same with
like rights.
SECTION 12 AUTHORIZATION TO EFFECT SUBORDINATION.
-------------------------------------
Each Holder of a Security by its acceptance thereof authorizes and directs
the Trustee on its behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in this Article 10, and appoints
the Trustee his attorney-in-fact for any and all such purposes, (including,
without limitation, the timely filing of a claim for the unpaid balance of the
Security such Holder holds in the form required in any Insolvency or Liquidation
Proceeding and causing such claim to be approved).
If a proper claim or proof of debt in the form required in such proceeding
is not filed by or on behalf of all Holders prior to 30 days before the
expiration of the time to file such claims or proofs, then the holders or a
Representative of any Senior Indebtedness are hereby authorized, and shall have
the right (without any duty), to file an appropriate claim for and on behalf of
such Holders.
SECTION 13 PAYMENT.
-------
A payment on account of or with respect to any Security shall include,
without limitation, any direct or indirect payment of principal, premium or
interest with respect to or in connection with any optional redemption or
purchase provisions, any direct or indirect payment
100
payable by reason of any other Indebtedness or Obligation being subordinated to
the Subordinated Exchange Notes, and any direct or indirect payment or recovery
on any Claim as a Holder relating to or arising out of this Indenture or any
Security, or the Issuance of any Security, or the transactions contemplated by
this Indenture or referred to herein.
ARTICLE 11
MISCELLANEOUS
SECTION 1 TRUST INDENTURE ACT CONTROLS.
----------------------------
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by operation of section 318(c) of the TIA, the imposed duties
shall control.
SECTION 2 NOTICES.
-------
Any notice or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person, mailed by registered or
certified mail, postage prepaid, return receipt requested or delivered by
telecopier or overnight air courier guaranteeing next day delivery to the
other's address:
If to the Company:
Jordan Telecommunication Products
Group, Inc.
ArborLake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
101
If to the Trustee:
First Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopier No.: (000) 000-0000
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; the date receipt is acknowledged, if mailed by registered or
certified mail; when answered back, if telecopied; and the next Business Day
after timely delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class mail
to his or her address shown on the register kept by the Registrar. Failure to
mail a notice or communication to a Holder or any defect in it shall not affect
its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
SECTION 3 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
-------------------------------------------
Holders may communicate pursuant to section 312(b) of the TIA with other
Holders with respect to their rights under this Indenture or the Subordinated
Exchange Notes. The Company, the Trustee, the Registrar and any other Person
shall have the protection of section 312(c) of the TIA.
102
SECTION 4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
--------------------------------------------------
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate (which shall include the statements set
forth in Section 11.5) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel (which shall include the statements set
forth in Section 11.5) stating that, in the opinion of such counsel, all such
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with.
SECTION 5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
---------------------------------------------
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to section 314(a)(4) of the TIA) shall include:
(1) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in such Person's opinion, such
condition or covenant has been complied with.
103
SECTION 6 RULES BY TRUSTEE AND AGENTS.
---------------------------
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
SECTION 7 LEGAL HOLIDAYS.
--------------
If a payment date is a Legal Holiday at a place of payment, payment may be
made at that place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.
SECTION 8 NO RECOURSE AGAINST OTHERS.
--------------------------
No officer, employee, director, stockholder or Subsidiary of the Company
shall have any liability for any Obligations of the Company under the
Subordinated Exchange Notes or this Indenture, or for any claim based on, in
respect of, or by reason of, such Obligations or the creation of any such
Obligation, except, in the case of a Subsidiary, for an express guarantee or an
express creation of any Lien by such Subsidiary of the Company's Obligations
under the Subordinated Exchange Notes. Each Holder by accepting a Subordinated
Exchange Note waives and releases all such liability, and such waiver and
release is part of the consideration for the issuance of the Subordinated
Exchange Notes. The foregoing waiver may not be effective to waive liabilities
under the Federal securities law and the Commission is of the view that such a
waiver is against public policy.
SECTION 9 COUNTERPARTS.
------------
This Indenture may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
SECTION 10 VARIABLE PROVISIONS.
-------------------
The Company initially appoints the Trustee as Paying Agent, Registrar and
authenticating agent.
104
The first compliance certificate to be delivered by the Company to the
Trustee pursuant to Section 4.3 shall be for the fiscal year ending on December
31, 1997
SECTION 11 GOVERNING LAW.
-------------
The internal laws of the State of New York shall govern this Indenture and
the Subordinated Exchange Notes, without regard to the conflict of laws
provisions thereof.
SECTION 12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
---------------------------------------------
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries, and no other indenture,
loan or debt agreement may be used to interpret this Indenture.
SECTION 13 SUCCESSORS.
----------
All agreements of the Company in this Indenture and the Subordinated
Exchange Notes shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 14 SEVERABILITY.
------------
If any provision in this Indenture or in the Subordinated Exchange Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 15 TABLE OF CONTENTS, HEADINGS, ETC.
--------------------------------
The Table of Contents, Cross-Reference Table and headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
SECTION 16 THIRD PARTY BENEFICIARIES.
-------------------------
Holders of Senior Indebtedness are third party beneficiaries of, and any
of them (or their Representative) shall have the right to enforce the provisions
of this Indenture that benefit such holders.
105
[NEXT PAGE IS THE SIGNATURE PAGE]
106
Dated as of ________, ____
JORDAN TELECOMMUNICATION PRODUCTS, INC.
By:
-------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
Dated as of ________, ____
FIRST TRUST NATIONAL ASSOCIATION
as Trustee
By:
-------------------------------------------
Name:
Title:
EXHIBIT A
(Face of Subordinated Exchange Note)
13 1/4% Series [A/B] Subordinated Preferred Stock
Exchange Note due 2009
No. $
CUSIP No.
JORDAN TELECOMMUNICATION PRODUCTS, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on August 1, 2009.
Interest Payment Dates: February 1 and August 1.
Record Dates: January 15 and July 15.
Dated: ________ __, ____
JORDAN TELECOMMUNICATION
PRODUCTS, INC.
By:
----------------------------
Name:
Title:
Trustee's Certificate of Authentication
Dated: _______ __, ____
This is one of the [Global]
Subordinated Exchange Notes referred to in the
within-mentioned Indenture:
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------
(Authorized Signatory)
A-1
[Unless and until it is exchanged in whole or in part for Subordinated
Exchange Notes in definitive form, this Subordinated Exchange Note may not be
transferred except as a whole by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary. The Depository Trust Company shall act
as the Depositary until a successor shall be appointed by the Company and the
Registrar. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
---
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHER WISE BY OR TO ANY Person IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.]/1/
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
--------------
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED
STATES TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, OR (c) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY
--------------------
/1/ This paragraph should be included only if the Senior Note is issued in
global form.
X-0
XXXXX XX XXX XXXXXX XXXXXX OR ANY OTHER APPLICABLE JURISDICTION AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
Additional provisions of this Subordinated Exchange Note are set forth on
the other side of this Subordinated Exchange Note.
A-3
(Back of Subordinated Exchange Note)
13 1/4% SERIES [A/B] SUBORDINATED PREFERRED STOCK
EXCHANGE NOTE DUE 2009
1. Interest. Jordan Telecommunication Products, Inc. (the "Company")
-------
promises to pay interest on the principal amount of the Subordinated Exchange
Notes at the rate and in the manner specified below. Interest on the
Subordinated Exchange Notes will accrue at 13 1/4% per annum from the date this
Subordinated Exchange Note is issued until maturity. The Company will pay
Liquidated Damages pursuant to Section 5 of the Registration Rights Agreement
referred to below. Interest and Liquidated Damages, if any, will be payable
semiannually in cash in arrears on February 1 and August 1 of each year, or if
any such day is not a Business Day on the next succeeding Business Day (each, an
"Interest Payment Date"). Interest on the Subordinated Exchange Notes will
---------------------
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the date of original issuance. The Company shall
pay interest on overdue principal and premium, if any, from time to time on
demand at the interest rate then in effect and shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Subordinated
Exchange Notes (except defaulted interest) to the Persons who are registered
holders of Subordinated Exchange Notes at the close of business on the record
date for the next Interest Payment Date even if such Subordinated Exchange
Notes are cancelled after such record date and on or before such Interest
Payment Date. Holders must surrender Subordinated Exchange Notes to a Paying
Agent to collect principal payments on such Subordinated Exchange Notes. The
Company will pay principal, premium, if any, interest and Liquidated Damages, if
any, in money of the United States that at the time of payment is legal tender
for payment of public and private debts. The Company will pay principal,
premium, if any, interest and Liquidated Damages, if any, by wire transfer of
immediately available funds to the accounts specified by the Holders or, if no
such account is specified, by mailing a check to each such Holder's registered
address; provided that payment by wire transfer of immediately available funds
--------
will be required with respect to principal, premium, if any, interest and
A-4
Liquidated Damages, if any, on all Global Subordinated Exchange Notes.
3. Paying Agent and Registrar. First Trust National Association (the
"Trustee") will initially act as the Paying Agent and Registrar. The Company
-------
may appoint additional paying agents or co-registrars, and change the Paying
Agent, any additional paying agent, the Registrar or any co-registrar without
prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. Indenture. The Company issued the Subordinated Exchange Notes under an
Indenture dated as of _________, 199__ (the "Indenture"), among the Company and
the Trustee. The terms of the Subordinated Exchange Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S. Code (S)(S) 77aaa-77bbbb) as in effect on the
date of the original issuance of the Subordinated Exchange Notes (the "Trust
-----
Indenture Act"). The Subordinated Exchange Notes are subject to, and qualified
-------------
by, all such terms, certain of which are summarized herein, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of such
terms (all capitalized terms not defined herein shall have the meanings assigned
them in the Indenture). The Subordinated Exchange Notes are general unsecured
obligations of the Company subordinated to all existing and future Senior
Indebtedness, including the Senior Notes, the Discount Notes and Indebtedness
under the New Credit Agreement, and are limited to $25,000,000 in aggregate
principal amount.
5. Optional Redemption. (a) Except as described in paragraph 5(b) below,
the Subordinated Exchange Notes may not be redeemed at the option of the Company
prior to August 1, 2002, other than out of the net proceeds of one or more
Equity Offerings, as and to the extent described in the Indenture. During the
twelve (12) month period beginning August 1 of the years indicated below, the
Subordinated Exchange Notes will be redeemable, at the option of the Company, in
whole or in part, on at least 30 but not more than 60 days' notice to each
Holder of Subordinated Exchange Notes to be redeemed, at the redemption prices
(expressed as percentages of the principal amount) set forth below, plus any
accrued and unpaid interest and Liquidated Damages, if any, to the date of
redemption:
Year Percentage
---- ----------
2002................................... 106.6250%
2003................................... 104.4167%
2004................................... 102.2083%
A-5
2005 and thereafter.................... 100.0000%
(b) Notwithstanding the foregoing, at any time, the Company may
redeem the Subordinated Exchange Notes in whole, but not in part, at a
redemption price of 113.25% of the principal amount thereof, plus any accrued
and unpaid interest and Liquidated Damages, if any, to the applicable date of
redemption with the proceeds of an Equity Offering; provided, that such
--------
redemption shall occur within 60 days of the date of the closing of such Equity
Offering.
6. Mandatory Redemption. Subject to the Company's obligation to make
an offer to purchase Subordinated Exchange Notes under certain circumstances
pursuant to Sections 4.13 and 4.14 of the Indenture (as described in paragraph
7 below), the Company is not required to make any mandatory redemption, purchase
or sinking fund payments with respect to the Subordinated Exchange Notes.
7. Mandatory Offers to Purchase Subordinated Exchange Notes. (a)
Upon the occurrence of a Change of Control, each Holder of Subordinated Exchange
Notes shall have the right to require the Company to purchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Subordinated
Exchange Notes pursuant to an Offer (as defined herein) at a purchase price
equal to 101% of the aggregate principal amount thereof, plus any accrued and
unpaid interest and Liquidated Damages, if any, to the date of purchase.
(b) If the Company or any Restricted Subsidiary consummates one or
more Asset Sales and does not use all of the Net Proceeds from such Asset Sales
as provided in the Indenture, the Company will be required, under certain
circumstances, to utilize the Excess Proceeds from such Asset Sales to make an
Offer (as defined herein) to purchase Subordinated Exchange Notes at a purchase
price equal to 100% of the principal amount of the Subordinated Exchange Notes,
plus any accrued and unpaid interest and Liquidated Damages, if any, to the date
of purchase. If the Excess Proceeds are insufficient to purchase all
Subordinated Exchange Notes tendered pursuant to any Asset Sale Offer, the
Trustee shall select the Subordinated Exchange Notes to be purchased in
accordance with the terms of the Indenture.
(c) Holders may tender all or, subject to paragraph 8 below, any
portion of their Subordinated Exchange Notes in a Change of Control Offer or
Asset Sale Offer (collectively, an "Offer") by completing the form below
-----
entitled "OPTION OF HOLDER TO ELECT PURCHASE."
A-6
(d) The Company shall comply with Rule 14e-1 under the Exchange Act
and any other securities laws and regulations to the extent such laws and
regulations are applicable to any Offer. To the extent that the provisions of
any of such securities laws or regulations conflict with provisions of this
Indenture, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Indenture by virtue thereof.
8. Notice of Redemption or Purchase. Notice of an optional
redemption or an Offer will be mailed to each Holder at its registered address
at least 30 days but not more than 60 days before the date of redemption or
purchase. Subordinated Exchange Notes may be redeemed or purchased in part, but
only in whole multiples of $1,000 unless all Subordinated Exchange Notes held by
a Holder are to be redeemed or purchased. On or after any date on which
Subordinated Exchange Notes are redeemed or purchased, interest ceases to accrue
on the Subordinated Exchange Notes or portions thereof called for redemption or
accepted for purchase on such date.
9. Denominations, Transfer, Exchange. The Subordinated Exchange
Notes are in registered form without coupons in denominations of $1,000 and
integral multiples thereof. The transfer of Subordinated Exchange Notes may be
registered and Subordinated Exchange Notes may be exchanged as provided in the
Indenture. Holders seeking to transfer or exchange their Subordinated Exchange
Notes may be required, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Paying Agent need not exchange or register the
transfer of any Subordinated Exchange Note or portion of a Subordinated
Exchange Note selected for redemption or tendered pursuant to an Offer. Also, it
need not exchange or register the transfer of any Subordinated Exchange Notes
for a period of 15 Business Days before a selection of Subordinated Exchange
Notes to be redeemed or purchased or between a record date and the next
succeeding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Subordinated
Exchange Note may be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Subordinated Exchange Notes may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Subordinated Exchange Notes, and any existing
A-7
Default (except a payment Default) may be waived with the consent of the Holders
of a majority in principal amount of the then outstanding Subordinated Exchange
Notes. Without the consent of any Holder, the Indenture or the Subordinated
Exchange Notes may be amended to: cure any ambiguity, defect or inconsistency;
provide for uncertificated Subordinated Exchange Notes in addition to or in
place of certificated Subordinated Exchange Notes; provide for the assumption of
the Company's obligations in the event of a merger or consolidation of the
Company in which the Company is not the surviving corporation or a sale of
substantially all of the Company's assets to such other corporation; comply with
the Securities and Exchange Commission's requirements to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; provide for
additional Guarantees with respect to the Subordinated Exchange Notes; or, make
any change that does not materially adversely affect any Holder's rights under
the Indenture.
12. Defaults and Remedies. Events of Default include: default for 30
days in payment of interest on, or Liquidated Damages, if any, with respect to,
the Subordinated Exchange Notes; default in payment when due of principal or
premium, if any, with respect to the Subordinated Exchange Notes; failure by the
Company for 45 days after notice to it to comply with any of its other
agreements or covenants in, or provisions of, the Indenture or the Subordinated
Exchange Notes; certain judicial findings of unenforceability or invalidity as
to any guarantee of the Subordinated Exchange Notes or the disaffirmance or
denial by any guarantor of its guarantee of the Subordinated Exchange Notes; and
certain events of bankruptcy or insolvency involving the Company or any
Restricted Subsidiary that is a Significant Subsidiary. If an Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Subordinated Exchange Notes may declare all the
Subordinated Exchange Notes to be immediately due and payable in an amount equal
to the principal of, premium, if any, and any accrued and unpaid interest on,
and Liquidated Damages, if any, with respect to such Subordinated Exchange
Notes; provided, however, that in the case of an Event of Default arising from
-------- -------
certain events of bankruptcy or insolvency, the principal of, premium, if any,
and any accrued and unpaid interest on, and Liquidated Damages, if any, with
respect to the Subordinated Exchange Notes becomes due and payable immediately
without further action or notice. Subject to certain exceptions, Holders of a
majority in principal amount of the then outstanding Subordinated Exchange Notes
may direct the Trustee in its exercise of any trust or power, provided that the
--------
Trustee will be under no obligation to exercise any of its rights or powers
under the Indenture
A-8
at the request of Holders unless such Holders have offered to the Trustee
security and indemnity satisfactory to it. Holders may not enforce the Indenture
or the Subordinated Exchange Notes except as provided in the Indenture. The
Trustee may withhold from Holders notice of any continuing default (except a
payment Default) if it determines that withholding notice is in their interests.
The Company must furnish an annual compliance certificate to the Trustee.
13. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or any Affiliate, and may otherwise deal with
the Company or any Affiliate, as if it were not Trustee.
14. No Recourse Against Others. No officer, employee, director,
stockholder or Subsidiary of the Company shall have any liability for any
Obligations of the Company under the Subordinated Exchange Notes or the
Indenture, or for any claim based on, in respect of, or by reason of, such
Obligations or the creation of any such Obligation, except, in the case of a
Subsidiary, for an express guarantee or an express creation of any Lien by such
Subsidiary of the Company's Obligations under the Subordinated Exchange Notes.
Each Holder by accepting a Subordinated Exchange Note waives and releases all
such liability, and such waiver and release is part of the consideration for the
issuance of the Subordinated Exchange Notes. The foregoing waiver may not be
effective to waive liabilities under the Federal securities law and the
Commission is of the view that such a waiver is against public policy.
15. Holders' Compliance with Registration Rights Agreement. Each
Holder of a Subordinated Exchange Note, by his acceptance thereof, acknowledges
and agrees to the provisions of the Registration Rights Agreement, dated as of
July 25, 1997, among the Company and the parties named on the signature page
thereof (the "Registration Rights Agreement"), including but not limited to the
-----------------------------
obligations of the Holders with respect to a registration and the
indemnification of the Company and the Purchaser (as defined therein) to the
extent provided therein.
16. Successor Substituted. Upon the consolidation or merger by the
Company with or into another corporation, or upon the sale, lease, conveyance or
other disposition of all or substantially all of its assets to another
corporation, in accordance with the Indenture, the corporation surviving any
such merger or consolidation (if not the Company) or the corporation to which
such assets were sold or transferred to shall succeed to, and be substituted
for, and may exercise
A-9
every right and power of the Company under the Indenture with the same effect as
if such surviving or other corporation had been named as the Company in the
Indenture.
17. Governing Law. This Subordinated Exchange Note shall be governed
by and construed in accordance with the internal laws of the State of New York
without regard to the conflict of laws provisions thereof.
18. Authentication. This Subordinated Exchange Note shall not be
valid until authenticated by the manual signature of the Trustee or an
authenticating agent.
19. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. 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 Subordinated Exchange Notes and have directed
the Trustee to use CUSIP numbers in notices of redemption as a convenience to
Holders. No representation is made as to the accuracy of such numbers either as
printed on the Subordinated Exchange Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
printed on the Subordinated Exchange Notes.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement,
which has in it the text of this Subordinated Exchange Note in larger type.
Request may be made to:
Jordan Telecommunication Products, Inc.
ArborLake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
A-10
ASSIGNMENT FORM
To assign this Subordinated Exchange Note, fill in the form below:
(I) or (we) assign and transfer this Subordinated Exchange Note to:
_____________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_____________________________________________
_____________________________________________
_____________________________________________
(Print or type assignee's name,
address and zip code)
and irrevocably appoint ______________________________________________________
__________________________ as agent to transfer this Subordinated Exchange Note
on the books of the Company. The agent may substitute another to act for him.
Date: Your Signature:
---------------- --------------------------
(Sign exactly as your name appears on
the other side of this Subordinated
Exchange Note)
Signature Guarantee:
--------------------------------
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Subordinated Exchange Note purchased by the
Company pursuant to Section 4.13 of the Indenture, check the box: [_]
If you elect to have this Subordinated Exchange Note purchased by the
Company pursuant to Section 4.14 of the Indenture, check the box: [_]
If you elect to have only part of this Subordinated Exchange Note purchased
by the Company pursuant to Section 4.13 or 4.14 of the Indenture, state the
amount (multiples of $1000 only):
$
-------------------
Date: Your Signature:
------------------ ------------------------
(Sign exactly as your name appears on
the other side of this Subordinated
Exchange Note)
Signature Guarantee:
-------------------------------------
Signature Guarantee:
-------------------------------------
A-12
SCHEDULE OF EXCHANGES OF DEFINITIVE
SUBORDINATED EXCHANGE NOTES/2/
The following exchanges of a part of this Global Subordinated Exchange
Note for Definitive Subordinated Ex change Notes have been made:
Principal Amount of this
Amount of decrease in Amount of increase in Global Subordinated Signature of
Principal Amount of Principal Amount of Exchange Note authorized officer of
this Global Subordinated this Global Subordinated following such decrease Trustee or Senior
Date of Exchange Exchange Note Exchange Note (or increase) Note Custodian
------------------ ------------------------ ------------------------ ------------------------- --------------------
----------------------
/2/ This should be included only if the Subordinated Exchange Note is issued in
global form.
A-13
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER OF SUBORDINATED EXCHANGE NOTES
______________, ______
Re: 13 1/4% Series [A/B] Subordinated Preferred Stock Exchange Notes due
2009 of Jordan Telecommunication Products, Inc.
This Certificate relates to $______ principal amount of Subordinated Exchange
Notes held in * _____ book-entry or * _____ definitive form by _____ (the
"Transferor").
----------
The Transferor*:
[_] has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Subordinated Exchange Note held by the
Depositary an Subordinated Exchange Note or Subordinated Exchange Notes in
definitive, registered form equal to its beneficial interest in such Global
Subordinated Exchange Note (or the portion thereof indicated above); or
[_] has requested the Trustee by written order to exchange or
register the transfer of a Subordinated Exchange Note or Subordinated Exchange
Notes.
In connection with such request and in respect of each such
Subordinated Exchange Note, the Transferor does hereby certify that the
Transferor is familiar with the Indenture relating to the above captioned
Subordinated Exchange Notes and that the transfer of this Subordinated Exchange
Note does not require registration under the Securities Act (as defined below)
because:*
[_] Such Subordinated Exchange Note is being acquired for the
Transferor's own account without transfer (in satisfaction of Section
2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of the Indenture).
[_] Such Subordinated Exchange Note is being transferred to a
"qualified institutional buyer" (as defined in Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act"), in reliance on Rule 144A.
--------------
-----------------------
* Check applicable box.
B-1
[_] Such Subordinated Exchange Note is being transferred (i) in
accordance with Rule 144 under the Securities Act (and based on an opinion of
counsel if the Company so requests) or (ii) pursuant to an effective
registration statement under the Securities Act.
[_] Such Subordinated Exchange Note is being transferred to an
institutional accredited investor within the meaning of Rule 501(a)(1), (2), (3)
or (7) under the Securities Act pursuant to a private placement exemption from
the registration requirements of the Securities Act (and based on an opinion of
counsel if the Company so requests together with a certification in
substantially the form of Exhibit C to the Indenture).
[_] Such Subordinated Exchange Note is being transferred in reliance
on and in compliance with another exemption from the registration requirements
of the Securities Act (and based on an opinion of counsel if the Company so
requests).
-------------------------------
[INSERT NAME OF TRANSFEROR]
By:
--------------------------------
Name:
Title:
Address:
B-2
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
___________, _____
,as Registrar
-----------------
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of certain 13 1/4% Series
[A/B] Subordinated Preferred Stock Exchange Notes due 2009 (the "Subordinated
------------
Preferred Stock Exchange Notes") of Jordan Telecommunication Products, Inc., a
------------------------------
Delaware corporation (the "Company"), we represent that:
-------
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Institutional
-------------
Accredited Investor"), or an entity in which all of the equity owners are
-------------------
Institutional Accredited Investors;
(ii) any purchase of Subordinated Exchange Notes will be for our own
account or for the account of one or more other Institutional Accredited
Investors as to which we exercise sole investment discretion;
(iii) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Subordinated Exchange Notes and we and any accounts for which
we are acting are able to bear the economic risks of our or their
investment;
(iv) we are not acquiring Subordinated Exchange Notes with a view to
any distribution thereof in a transaction that would violate the Securities
Act or the securities laws of any State of the United States or any other
applicable jurisdiction; provided that the disposition of our property and
--------
the property of any accounts for which we are acting as fiduciary shall
remain at all times within our control; and
(v) we acknowledge that we have had access to such financial and
other information, and have been afforded the opportunity to ask such
questions of
C-1
representatives of the Company and receive answers thereto, as we deem
necessary in connection with our decision to purchase Subordinated Exchange
Notes.
We understand that the Subordinated Exchange Notes have not been registered
under the Securities Act, and we agree, on our own behalf and on behalf of each
account for which we acquire any Subordinated Exchange Notes, that such Subordi-
nated Exchange Notes my be offered, resold, pledged or otherwise transferred
only (i) to a person whom we reason ably believe to be a qualified institutional
buyer (as defined in Rule 144A under the Securities Act) in a transaction
meeting the requirements of Rule 144A, in a transaction meeting the requirements
of Rule 144 under the Securities Act, (ii) to the Company or (iii) pursuant to
an effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We understand that the registrar will not be required
to accept for registration of transfer any Subordinated Exchange Notes, except
upon presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with. We further understand that the
Subordinated Exchange Notes purchased by us will be in the form of definitive
physical certificates and that such certificates will bear a legend reflecting
the substance of this paragraph. We further agree to provide to any person
acquiring any of the Subordinated Exchange Notes from us a notice advising such
person that resales of the Subordinated Exchange Notes are restricted as stated
herein.
We acknowledge that you, the Company and others will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS
THEREOF.
Very truly yours,
[Name of Transferor]
By:
Name:
Title:
C-2
Address:
C-3
