1
EXHIBIT 4.1
NORTEK, INC.,
Company,
and
STATE STREET BANK AND TRUST COMPANY,
Trustee
-------------------------------------
INDENTURE
Dated as of August 26, 1997
-------------------------------------
$310,000,000
Series A and Series B
9 1/8 % Senior Notes due September 1, 2007
2
TABLE OF CONTENTS(1)
--------------------
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE ........................ 1
SECTION 1.01 Definitions ..................................... 1
SECTION 1.02 OTHER DEFINITIONS ............................... 17
SECTION 1.03 INCORPORATION BY REFERENCE
OF TRUST INDENTURE ACT .......................... 17
SECTION 1.04 RULES OF CONSTRUCTION ........................... 18
SECTION 1.05 ACTS OF HOLDERS ................................. 18
SECTION 1.06 EXCHANGE RATES .................................. 19
ARTICLE 2
THE NOTES ......................................................... 19
SECTION 2.01 FORM AND DATING ................................. 19
SECTION 2.02 EXECUTION AND AUTHENTICATION .................... 21
SECTION 2.03 REGISTRAR AND PAYING AGENT ...................... 22
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST ............. 23
SECTION 2.05 HOLDER LISTS .................................... 23
SECTION 2.06 TRANSFER AND EXCHANGE ........................... 23
SECTION 2.07 REPLACEMENT NOTES ............................... 33
SECTION 2.08 OUTSTANDING NOTES; DETERMINATIONS OF
HOLDERS' ACTION ................................. 34
SECTION 2.09 TEMPORARY NOTES ................................. 35
SECTION 2.10 CANCELLATION .................................... 35
SECTION 2.11 CUSIP NUMBER .................................... 35
SECTION 2.12 DEFAULTED INTEREST .............................. 35
SECTION 2.13 LIQUIDATED DAMAGES UNDER REGISTRATION
RIGHTS AGREEMENT ................................ 36
ARTICLE 3
REDEMPTION ........................................................ 36
SECTION 3.01 RIGHT TO REDEEM; NOTICES TO TRUSTEE ............. 36
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED ............... 36
SECTION 3.03 NOTICE OF REDEMPTION ............................ 36
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION .................. 37
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE ..................... 37
----------------------
(1) This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
i
3
SECTION 3.06 NOTES REDEEMED IN PART .......................... 38
ARTICLE 4
COVENANTS ......................................................... 38
SECTION 4.01 PAYMENT OF NOTES ................................ 38
SECTION 4.02 REPORTS ......................................... 38
SECTION 4.03 COMPLIANCE CERTIFICATES ......................... 39
SECTION 4.04 FURTHER INSTRUMENTS AND ACTS .................... 40
SECTION 4.05 MAINTENANCE OF OFFICE OR AGENCY ................. 40
SECTION 4.06 LIMITATION ON RESTRICTED PAYMENTS ............... 41
SECTION 4.07 LIMITATION ON ADDITIONAL INDEBTEDNESS ........... 42
SECTION 4.08 LIMITATION ON SALE OR ISSUANCE OF
PREFERRED STOCK OF RESTRICTED SUBSIDIARIES ...... 46
SECTION 4.09 LIMITATION ON LIENS ............................. 47
SECTION 4.10 LIMITATION ON CERTAIN RESTRICTIONS
AFFECTING SUBSIDIARIES .......................... 48
SECTION 4.11 REPURCHASE UPON CHANGE OF CONTROL ............... 48
SECTION 4.12 LIMITATION ON USE OF PROCEEDS FROM
ASSET SALES ..................................... 51
SECTION 4.13 LIMITATION ON TRANSACTIONS WITH
AFFILIATES ...................................... 51
SECTION 4.14 LIMITATION ON GUARANTIES BY SUBSIDIARIES ........ 52
SECTION 4.15 PAYMENT OF TAXES AND OTHER CLAIMS ............... 53
SECTION 4.16 CORPORATE EXISTENCE ............................. 53
SECTION 4.17 MAINTENANCE OF PROPERTIES AND INSURANCE ......... 53
SECTION 4.18 STAY, EXTENSION AND USURY LAWS .................. 54
SECTION 4.19 INVESTMENT COMPANY ACT .......................... 54
SECTION 4.20 PAYMENTS FOR CONSENTS ........................... 54
SECTION 4.21 COVENANT TO COMPLY WITH SECURITIES
LAWS UPON PURCHASE OF NOTES ..................... 54
ARTICLE 5
SUCCESSOR CORPORATION ............................................. 55
SECTION 5.01 WHEN THE COMPANY MAY MERGE OR
TRANSFER ASSETS ................................. 55
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED ............... 56
ARTICLE 6
DEFAULTS AND REMEDIES ............................................. 57
SECTION 6.01 EVENTS OF DEFAULT ............................... 57
SECTION 6.02 ACCELERATION .................................... 59
SECTION 6.03 OTHER REMEDIES .................................. 59
SECTION 6.04 WAIVER OF PAST DEFAULTS ......................... 60
SECTION 6.05 CONTROL BY MAJORITY ............................. 60
SECTION 6.06 LIMITATION ON SUITS ............................. 60
ii
4
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT ............ 61
SECTION 6.08 COLLECTION SUIT BY TRUSTEE ...................... 61
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM ................ 61
SECTION 6.10 PRIORITIES ...................................... 62
SECTION 6.11 UNDERTAKING FOR COSTS ........................... 62
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES .............. 62
ARTICLE 7
TRUSTEE .......................................................... 63
SECTION 7.01 DUTIES OF TRUSTEE ............................... 63
SECTION 7.02 RIGHTS OF TRUSTEE ............................... 64
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE .................... 65
SECTION 7.04 TRUSTEE'S DISCLAIMER ............................ 65
SECTION 7.05 NOTICE OF DEFAULTS .............................. 65
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS ................... 65
SECTION 7.07 COMPENSATION AND INDEMNITY ...................... 65
SECTION 7.08 REPLACEMENT OF TRUSTEE .......................... 66
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER ..................... 67
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION ................... 67
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE COMPANY ............................. 67
ARTICLE 8
DISCHARGE OF INDENTURE ............................................ 68
SECTION 8.01 DISCHARGE OF LIABILITY ON NOTES ................. 68
SECTION 8.02 REPAYMENT TO THE COMPANY OR
SUBSIDIARY GUARANTORS ........................... 69
ARTICLE 9
AMENDMENTS ........................................................ 69
SECTION 9.01 WITHOUT CONSENT OF HOLDERS ...................... 69
SECTION 9.02 WITH CONSENT OF HOLDERS ......................... 70
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT ............. 71
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS,
WAIVERS AND ACTIONS ............................ 71
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES ................ 71
SECTION 9.06 TRUSTEE TO SIGN SUPPLEMENTAL
INDENTURES ..................................... 71
SECTION 9.07 EFFECT OF SUPPLEMENTAL INDENTURES ............... 71
ARTICLE 10
MISCELLANEOUS ..................................................... 72
SECTION 10.01 TRUST INDENTURE ACT CONTROLS ................... 72
SECTION 10.02 NOTICES ........................................ 72
SECTION 10.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS .... 73
iii
5
SECTION 10.04 CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT .......................... 73
SECTION 10.05 STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION ..................................... 73
SECTION 10.06 SEPARABILITY CLAUSE ............................ 74
SECTION 10.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR ... 74
SECTION 10.08 LEGAL HOLIDAYS ................................. 74
SECTION 10.09 GOVERNING LAW .................................. 74
SECTION 10.10 NO RECOURSE AGAINST OTHERS ..................... 74
SECTION 10.11 SUCCESSORS ..................................... 75
SECTION 10.12 MULTIPLE ORIGINALS ............................. 75
iv
6
INDENTURE, dated as of August 26, 1997, between Nortek, Inc., a Delaware
corporation (the "Company"), and State Street Bank and Trust Company, a
Massachusetts banking corporation (the "Trustee").
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 9 % Series A Senior
Notes due September 1, 2007 (the "Series A Notes") and the 9 % Series B Senior
Notes due September 1, 2007 (the "Series B Notes"):
ARTICLE 1
DEFINITION AND INCORPORATION BY REFERENCE
SECTION 1.01 Definitions.
"Acquired Indebtedness" means, with respect to any Person, Indebtedness of
such Person (i) assumed in connection with an acquisition of assets or
properties from such Person or (ii) existing at the time such Person becomes a
Restricted Subsidiary of any other Person provided such Person was not
immediately prior thereto an Unrestricted Subsidiary (in each case other than
any Indebtedness incurred in connection with, or in contemplation of, such
acquisition or such Person becoming such a Restricted Subsidiary).
"Affiliate" means, with respect to any Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. A Person shall be deemed to "control"
(including the correlative meanings, the terms "controlling", "controlled by"
and "under common control with") another Person if the controlling Person
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of voting securities, by agreement or otherwise.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Allowable Subsidiary Loans" means Indebtedness of the Company to a
Restricted Subsidiary not to exceed the Net Cash Proceeds received by the
Company as a result of such Restricted Subsidiary becoming less than a
Wholly-Owned Subsidiary through the sale of Equity Interests in compliance with
the terms of the Indenture, provided that (i) all such Allowable Subsidiary
Loans are contractually subordinated in right of payments to the Notes and (ii)
the total amount of all Allowable Subsidiary Loans at any time outstanding does
not exceed $35,000,000.
"Asset Sale" means, with respect to any Person, the sale, lease, conveyance
or other transfer or disposition by such Person of any of its assets or
properties (including by way of a sale-and-leaseback and including the sale,
issuance or other transfer of any of the Capital Stock of any Subsidiary of such
Person), in a single transaction or through a series of related
7
transactions, for aggregate consideration received by such Person or a
Subsidiary of such Person (but if such Person is the Company or any Restricted
Subsidiary, only if such Subsidiary is a Restricted Subsidiary), net of
out-of-pocket costs relating thereto (including, without limitation, legal,
accounting and investment banking fees and sales commissions), in excess of
$5,000,000. For purposes of this definition, consideration shall include,
without limitation, any indebtedness for borrowed money of such Person or such
Subsidiary that is assumed by the transferee of any assets or any such
indebtedness of any Subsidiary of such Person whose stock is purchased by the
transferee. Notwithstanding anything to the contrary in the foregoing provisions
of this definition, the term "Asset Sale", with respect to any Person, shall not
include (i) the sale, lease or other transfer or disposition of assets acquired
and held for resale in the ordinary course of business; (ii) the sale, lease or
other transfer or disposition of assets in accordance with the provisions of
Article 5 hereof; (iii) the sale, lease or other transfer or disposition of
damaged, worn out or obsolete property in the ordinary course of business or
other property no longer necessary for the proper conduct of the business of
such Person or its Subsidiaries; (iv) the abandonment of assets or properties
which are no longer useful in the business of such Person or its Subsidiaries
and are not readily saleable; (v) the granting of any Lien permitted under
Section 4.09 hereof (and any foreclosure or other sale under any such Lien,
except to the extent there are surplus proceeds from such foreclosure); (vi) any
sale, lease, assignment or other disposition by such Person or its Subsidiaries
if such Person has outstanding senior debt securities all of which are rated
BBB-- or higher by S&P and have not been placed on credit watch by S&P for a
possible downgrade or are rated Baa3 or higher by Xxxxx'x and have not been
placed on credit watch by Xxxxx'x for a possible downgrade; or (vii) the sale or
other transfer or disposition of receivables in connection with an asset
securitization transaction by such Person or its Subsidiaries.
"Average Life" means, as of the date of determination, with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
the number of years from the date of determination to the date of each
successive scheduled principal payment (assuming the exercise by the obligor of
such debt security of all unconditional (other than as to the giving of notice)
extension options of each such scheduled payment date) of such debt security
multiplied by the amount of such principal payment by (ii) the sum of all such
principal payments.
"Board of Directors" of any corporation means the Board of Directors of
such corporation, or any duly authorized committee of such Board of Directors.
"Board Resolution" means, with respect to any Person, a copy of a
resolutions certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, as filed with the
corporate records of such Person.
"Broan Limited Credit Facility" means a credit facility between Broan
Limited or any of the Canadian Subsidiaries, and one or more banks or other
institutional lenders, as the same may be amended, extended, amended and
restated, supplemented or otherwise modified or replaced from time to time.
2
8
"Business Day" means any day that is not a Saturday, a Sunday or a day on
which banking institutions in the Commonwealth of Massachusetts are authorized
or required to close.
"Canadian Subsidiary" means any Subsidiary of Broan Limited and any
Subsidiary of the Company whose headquarters is located in Canada.
"Capital Lease Obligations" means, with respect to any Person, all
obligations under leases of property by such Person as lessee which would be
capitalized on a balance sheet of such Person prepared in accordance with GAAP,
and for purposes of this Indenture the amount of such obligations at any time
shall be the aggregate capitalized amount thereof at such time, as determined in
accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock (including common or preferred stock), partnership interests or
any other participation right or other interest in the nature of any equity
interest in such Person.
"Cash Equivalents" means (i) any evidence of Indebtedness, maturing not
more than 365 days after the date of acquisition, issued or fully guaranteed or
insured by the United States of America, or an instrumentality or agency thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof), (ii) any certificate of deposit, overnight bank
deposit or bankers' acceptance, maturing not more than 365 days after the date
of acquisition, issued by, or time deposit of, a commercial banking institution
having unsecured long-term debt (or whose holding company has unsecured
long-term debt) rated, at the time as of which any Investment therein is made,
BBB-- or better by S&P or Xxxxx'x or the equivalent of such rating by a
successor rating agency, (iii) commercial paper, maturing not more than 90 days
after the date of acquisition, issued by a corporation (other than an Affiliate
or Subsidiary of the Company) organized and existing under the laws of the
United States of America or any State thereof or the District of Columbia which
is rated, at the time as of which any Investment therein is made, P-1 or better
by Xxxxx'x or A-1 or better by S&P, or the equivalent of such rating by a
successor rating agency, (iv) Investments in mutual funds, money market funds,
investment pools and other savings vehicles, substantially all of the assets of
which are invested in Investments described in clause (i), (ii) or (iii) above,
and (v) in the case of Broan Limited and the Canadian Subsidiaries, (a) any
evidence of Indebtedness, maturing not more than 365 days after the date of
acquisition, issued or fully guaranteed or insured by Canada or any
instrumentality or agency thereof (provided that the full faith and credit of
Canada is pledged in support thereof), (b) any certificate of deposit, overnight
bank deposit or bankers' acceptance, maturing not more than 365 days after the
date of acquisition, issued by, or time deposit of, a commercial banking
institution having unsecured long-term debt (or whose holding company has
unsecured long-term debt) rated, at the time as of which any Investment therein
is made, A or better by Dominion Bond Rating Services or the equivalent of such
rating by a successor rating agency and (c) commercial paper, maturing not more
than 90 days after the date of acquisition, issued by a corporation (other than
an Affiliate or Subsidiary of the Company) organized and
3
9
existing under the laws of Canada or any province thereof which is rated, at the
time as of which any Investment therein is made, R-1 or better by Dominion Bond
Rating Services or the equivalent of such rating by a successor rating agency.
"Commodity Agreement" means any agreement or arrangement designed to
protect the Company or any of its Restricted Subsidiaries against fluctuations
in the prices of commodities used by the Company or any of its Subsidiaries in
the ordinary course of business.
"Company Credit Facility" means one or more credit facilities (other than
the Ply Gem Credit Facility) between the Company or any of its Subsidiaries and
one or more banks or other institutional lenders, as the same may be amended,
extended, amended and restated, supplemented or otherwise modified or replaced
from time to time, specifically designated in each such credit facility as a
"Company Credit Facility." All Company Credit Facilities are referred to
collectively in the Indenture as the "Company Credit Facility."
"Consolidated Amortization Expense" means, with respect to any Person for
any period, the amortization expense of such Person and its Subsidiaries (or if
such Person is the Company, the amortization expense of the Company and its
Restricted Subsidiaries), determined on a consolidated basis for such period in
accordance with GAAP, excluding any amortization expense included in
Consolidated Interest Expense.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the sum of, without duplication, (i) Consolidated Net Income of such Person for
such period, (ii) Consolidated Interest Expense of such Person for such period,
(iii) Consolidated Income Tax Expense of such Person for such period, (iv)
Consolidated Depreciation Expense of such Person for such period, (v)
Consolidated Amortization Expense of such Person for such period, and (vi) the
amount, not to exceed 10% of Consolidated Cash Flow of such Person for such
period (which amount shall be excluded in determining such Consolidated Cash
Flow), by which (A) other non-cash items of expense that reduce Consolidated Net
Income of such Person for such period exceed (B) other non-cash items of expense
that increase Consolidated Net Income of such Person for such period.
"Consolidated Cash Flow Coverage Ratio" means, with respect to any Person
for any period, the ratio of Consolidated Cash Flow of such Person for such
period to Consolidated Interest Expense of such Person for such period;
provided, however, that, Consolidated Cash Flow and Consolidated Interest
Expense shall be calculated on a pro forma basis after giving effect, as if
occurring at the beginning of such period, to (i) the incurrence of Indebtedness
giving rise to the need to calculate the Consolidated Cash Flow Coverage Ratio
and the retirement of any Indebtedness refinanced with the proceeds of such
Indebtedness, (ii) the incurrence, during such period or since the last day of
such period, of any Indebtedness (other than Indebtedness incurred for working
capital purposes), and the retirement of any Indebtedness refinanced with the
proceeds of such Indebtedness, (iii) the acquisition by such Person (directly or
through a Restricted Subsidiary of such Person if such Person is the Company and
directly or through a Subsidiary of such Person if such Person is not the
Company) of any company or business during such period
4
10
or since the last day of such period and (iv) the sale or other disposition of
assets or properties outside the ordinary course of business by such Person
(directly or through a Restricted Subsidiary of such Person if such Person is
the Company and directly or through a Subsidiary of such Person if such Person
is not the Company) and the actual application of the proceeds therefrom during
such period or since the last day of such period.
"Consolidated Depreciation Expense" means, with respect to any Person for
any period, the depreciation and depletion expense of such Person and its
Subsidiaries (or if such Person is the Company, the depreciation and depletion
expense of the Company and its Restricted Subsidiaries), determined on a
consolidated basis for such period in accordance with GAAP.
"Consolidated Income Tax Expense" means, with respect to any Person for any
period, the provision for federal, state, local and foreign income taxes
(including franchise, net worth or similar taxes) of such Person and its
Subsidiaries (or if such Person is the Company, the provision for such taxes of
the Company and its Restricted Subsidiaries) for such period, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (i) the interest expense of such Person
and its Subsidiaries (or if such Person is the Company, the interest expense of
the Company and its Restricted Subsidiaries) for such period, determined on a
consolidated basis in accordance with GAAP, including, without limitation, all
original issue discount and other interest portion of any deferred payment
Indebtedness and all commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing less any interest
income included in Consolidated Net Income for such period, but excluding any
deferred financing fees otherwise includible in Consolidated Interest Expense
for such period; (ii) the interest component of Capital Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Subsidiaries (or if such Person is the Company, such interest expense paid,
accrued and/or scheduled to be paid or accrued by the Company and its Restricted
Subsidiaries) during such period as determined on a consolidated basis in
accordance with GAAP; and (iii) all cash dividends or other distributions
declared or paid on any Capital Stock (other than common stock or preferred
stock that is not Redeemable Stock or, with respect to the Company, special
common stock) of such Person and its Subsidiaries (or if such Person is the
Company, all such dividends or other distributions declared or paid on any such
Capital Stock of the Company and its Restricted Subsidiaries) for such period as
determined on a consolidated basis in accordance with GAAP; provided, however,
that any Indebtedness bearing a floating rate of interest shall be computed as
if the rate in effect on the date of computation had been the applicable rate
for the entire period.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate net income (or loss) of such Person and its Subsidiaries (or if
such Person is the Company, the aggregate net income (or loss) of the Company
and its Restricted Subsidiaries) for such period, before discontinued
operations, extraordinary items and the cumulative effect of a
5
11
change in accounting principles, determined on a consolidated basis in
accordance with GAAP, provided that there shall also be excluded from
Consolidated Net Income (but only to the extent included in calculating such
Consolidated Net Income): (i) any net gains or losses in respect of dispositions
of assets other than in the ordinary course of business; (ii) any gains from
currency exchange transactions not in the ordinary course of business consistent
with past practice; (iii) any gains or losses realized from the termination of
any employee pension benefit plan; (iv) any gains or losses realized upon the
refinancing of any Indebtedness of such Person or any of its Subsidiaries (or if
such Person is the Company, any gains or losses realized upon the refinancing of
any Indebtedness of Company and its Restricted Subsidiaries); (v) any gains or
losses arising from the destruction of property or assets due to fire or other
casualty; (vi) any gains or losses from the revaluation of property or assets;
(vii) the net income (or loss) of any Person that is not a Subsidiary of such
first Person (or that is not a Restricted Subsidiary if such first Person is the
Company) except to the extent of cash dividends or distributions paid to such
first Person by such other Person in such period; (viii) the net income (or
loss) of any Subsidiary of such first Person except to the extent of the
interest of such Person in such Subsidiary; (ix) the net income of any
Subsidiary of such Person (or if such Person is the Company, of any Restricted
Subsidiary) that is subject to any restriction or limitation on the payment of
dividends and other distributions (including loans or advances) by operation of
the terms of its charter or by agreement, instrument, judgment, decree, order or
governmental regulation applicable to such Subsidiary (or such Restricted
Subsidiary, if applicable) to the extent of such restriction or limitation in
such period; (x) the net income of any Person acquired in a pooling transaction
for any period prior to the date of such acquisition; and (xi) the excess of (a)
the consolidated compensation expense recorded by the Company in the computation
of net earnings of the Company in respect of shares of Capital Stock (other than
Redeemable Stock) or other Equity Interests awarded, pursuant to a plan or other
arrangement approved by the Board of Directors of the Company (or of a Reporting
Subsidiary, if applicable), to or for the benefit of any employee, officer or
director of the Company or any of its Subsidiaries or to or by any employee
stock ownership plan or similar trust for the benefit of any such employee,
officer or director, over (b) the amount of consolidated income tax benefit
recorded by the Company in connection with such consolidated compensation
expense of the Company.
"Consolidated Net Worth" means, with respect to any Person at any date of
determination, the sum of the Capital Stock, additional paid-in capital and
cumulative translation, pension and other adjustment account plus retained
earnings (or minus accumulated deficit), excluding amounts attributable to
Redeemable Stock, any Capital Stock convertible into Indebtedness, or Treasury
Stock, of such Person and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement entered into in the ordinary
course of business and designed to protect the Company or any of its Restricted
Subsidiaries against fluctuations in currency values to or under which the
Company or any of its Restricted Subsidiaries is a party or a beneficiary on the
issue date of the Notes or becomes a party or a beneficiary thereafter.
6
12
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Definitive Notes" means Notes that are in the form of Exhibit A attached
hereto (but without including the text referred to in footnote 1 thereto and the
additional schedule referred to therein).
"Depository" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter "Depository" shall mean or include such successor.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors of the Company is
required to deliver a Board Resolution under the Indenture, a member of such
Board of Directors who does not have any material direct or indirect financial
interest in or with respect to such transaction or series of transactions.
"Eligible Inventory" means, with respect to any Person, the finished goods,
raw materials and work-in-process of such Person less any applicable reserves,
each of the foregoing determined on the FIFO method of accounting in accordance
with GAAP.
"Eligible Receivables" means, with respect to any Person, the trade
receivables of such Person less the allowance for doubtful accounts, each of the
foregoing determined in accordance with GAAP.
"Equity Interests" means Capital Stock, warrants, options or other rights
to acquire Capital Stock (but excluding any debt security which is convertible
into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Note" means any Series B Note issued in exchange for an Original
Note pursuant to the Exchange Offer or the Private Exchange.
"Exchange Offer" means the offer by the Company to the Holders of all
outstanding Transfer Restricted Securities to exchange all such outstanding
Transfer Restricted Securities held by such Holders for Series B Notes, in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such Holders.
"Exchange Offer Registration Statement" means the registration statement
under the Securities Act relating to the Exchange Offer, including the related
prospectus.
7
13
"Exempt Person" means (i) Xxxxxxx X. Xxxxxx, (ii) any Person which is an
Affiliate of Xxxxxxx X. Xxxxxx, and (iii) any other Affiliate of such Person so
long as such Person is an Affiliate of Xxxxxxx X. Xxxxxx.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries, in existence on the issue date of the Notes, including
without limitation all Indebtedness outstanding under the Ply Gem Credit
Facility on such date.
"Existing Investments" means (i) Investments of the Company and its
Restricted Subsidiaries, in existence on the issue date of the Notes and (ii)
Investments to be made pursuant to commitments authorized by the Board of
Directors of the Company prior to the issue date of the Notes (a) in Ecological
Engineering Associates, L.P. in an amount not to exceed $3.0 million (including
such Investments made prior to the issue date of the Notes) and (b) in or
related to a joint venture involving Universal-Xxxxxx Corporation in an amount
not to exceed $10.0 million.
"Fair Market Value" means, with respect to any asset, the price which could
be negotiated in an arm's-length free market transaction, for cash, between a
willing seller and a willing buyer, neither of which is under pressure or
compulsion to complete the transaction; provided, however, that the Fair Market
Value of any asset or assets of the Company or any of its Subsidiaries shall be
determined by the Board of Directors of the Company or, if such Subsidiary is a
Reporting Subsidiary, of such Reporting Subsidiary, acting in good faith, and
evidenced by a Board Resolution of the Company or such Reporting Subsidiary, as
the case may be, delivered to the Trustee.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
from time to time; provided, however, that for purposes of Articles 4 and 5
hereof and the definitions used therein, GAAP shall be determined on the basis
of such principles as in effect on the issue date of the Notes.
"Global Note" means a Note registered in the name of the Depository or its
nominee that contains the paragraph referred to in footnote 1 and the additional
schedule referred to in the form of Note attached hereto as Exhibit A.
"Guaranty" means, with respect to any obligation, (i) a guaranty (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, of all or any part of such obligation
and (ii) an agreement, direct or indirect, contingent or otherwise, the
practical effect of which is to assure the payment or performance of (or payment
of damages in the event of non-performance) of all or any part of such
obligation.
8
14
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Indebtedness" means, with respect to any Person, without duplication, any
indebtedness, contingent or otherwise, (i) with respect to borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), or evidenced by bonds, notes, debentures
or similar instruments or consisting of reimbursement obligations with respect
to letters of credit, or (ii) representing the deferred and unpaid balance of
the purchase price of any property excluding any such balance that constitutes a
trade payable or an accrued liability, in each case arising in the ordinary
course of business, if and to the extent any of the foregoing indebtedness would
appear as a liability upon a balance sheet of such Person prepared on a
consolidated basis in accordance with GAAP, and shall also include, to the
extent not otherwise included, (a) any Capital Lease Obligations, (b) the
maximum fixed repurchase price of any Redeemable Stock, (c) indebtedness secured
by a Lien to which the property or assets owned or held by such Person is
subject, whether or not the obligations secured thereby shall have been assumed,
(d) guaranties of items that would be included within this definition to the
extent of such guaranties, and (e) net liabilities in respect of Commodity
Agreements, Currency Agreements and Interest Rate Agreements. For purposes of
the immediately preceding sentence, the maximum fixed repurchase price of any
Redeemable Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to the Indenture, provided that if such
Redeemable Stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Redeemable Stock. The amount of Indebtedness of
any Person at any date shall be without duplication (y) the outstanding balance
at such date of all unconditional obligations as described above and the maximum
liability of any such contingent obligations at such date and (z) in the case of
Indebtedness of others secured by a Lien to which the property or assets owned
or held by such Person is subject, the lesser of the Fair Market Value at such
date of any property or asset subject to a Lien securing the Indebtedness of
others or the amount of the Indebtedness secured. The amount of any Indebtedness
issued at a discount shall be equal to the gross proceeds of such issuance (and
not the face amount of any bond, note, debenture or similar instrument
representing such Indebtedness).
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, or other similar agreement or arrangement entered
into in the ordinary course of business and designed to protect the Company or
any of its Restricted Subsidiaries against fluctuations in interest rates to or
under which the Company or any of its Restricted Subsidiaries is a party or a
beneficiary thereof.
9
15
"Investment" means, with respect to any Person, (i) any direct or indirect
loan or other extension of credit (other than extensions of trade credit by such
Person on commercially reasonable terms and relating to the sale of property or
services in the ordinary course of business) or capital contribution (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others) to any other Person, or (ii) any
purchase or acquisition by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by any other
Person.
"Lien" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law (including any conditional sale or other title retention
agreement, any lease intended as security, any option or other agreement to sell
or give any security interest and any filing of or other agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction other than a financing statement covering leased goods under
a lease not intended as security).
"Liquidated Damages" means all liquidated damages then owing pursuant to
the Registration Rights Agreement.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Cash Proceeds" means the aggregate Cash Proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale, net
of the out-of-pocket costs relating to such Asset Sale (including, without
limitation, legal, accounting and investment banking fees and sales commissions)
and any relocation expenses and severance and shutdown costs incurred as a
result thereof, and all federal, state, provincial, foreign and local taxes
required to be accrued as a liability under GAAP as a consequence of such Asset
Sale, amounts required to be applied to the repayment of Indebtedness secured by
a Lien on the asset or assets which are the subject of such Asset Sale and any
reasonable reserve in accordance with GAAP for adjustments in respect of the
sale price of such asset or assets.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
or any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such other Indebtedness or cause
the payment thereof to be accelerated or payable prior to its stated maturity;
and (iii) as to which the lenders have been notified in writing that they will
not have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"Notes" means the Original Notes and the Exchange Notes.
10
16
"9 1/4% Notes" means the Company's 9 1/4% Senior Notes due March 15, 2007.
"9 7/8% Notes" means the Company's 9 7/8% Senior Subordinated Notes due
2004.
"Note Custodian" means the Trustee, as custodian for the Depository with
respect to the Notes in global form, or any successor entity thereto.
"Officer" means, with respect to any corporation, the Chairman of the
Board, any Vice Chairman, the President, any Vice President, any Assistant Vice
President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of such corporation.
"Officers' Certificate" means, with respect to any Person, a certificate
containing the information specified in Sections 10.04 and 10.05 hereof signed
by the Chief Executive Officer or President and the Chief Financial Officer or
chief accounting officer of such Person.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 10.04 and 10.05 hereof, rendered by legal counsel (who may
be counsel to the Company) acceptable to the Trustee.
"Original Notes" means the Series A Notes initially issued under this
Indenture prior to the issuance of Exchange Notes.
"Permitted Investments" means any of the following: (i) Cash Equivalents;
(ii) Existing Investments; (iii) Investments by the Company or a Restricted
Subsidiary of the Company in any Subsidiary of the Company that is a Restricted
Subsidiary or any other Person that concurrently with the making of such
Investment becomes a Subsidiary of the Company that is a Restricted Subsidiary;
(iv) guaranties by Restricted Subsidiaries of the Company permitted under
Section 4.07 or 4.14 hereof; (v) Indebtedness of the Company to any Restricted
Subsidiary of the Company, provided that such Indebtedness is contractually
subordinated in right of payment to the Notes; (vi) Investments by the Company
or any of its Restricted Subsidiaries in debt securities or debt instruments
having maturities of 10 years or less and (A) issued or fully guaranteed or
insured by the United States of America, or an instrumentality or agency thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof) or (B) with a rating of BBB- or better by S&P or
Baa-3 or better by Moody's or the equivalent of such rating by a successor
rating agency; (vii) any Investment by Broan Limited and or any Canadian
Subsidiary in debt securities or debt instruments having maturities of 10 years
or less and issued or fully guaranteed or insured by Canada or an
instrumentality or agency thereof or rated, at the time of such Investment, BBB-
or better by Dominion Bond Rating Services or the equivalent of such rating by a
successor rating agency, so long as the aggregate amount of all such Investments
by Broan Limited and any Canadian Subsidiaries that are Restricted Subsidiaries
does not exceed $15,000,000 at any one time outstanding; (viii) loans and
advances to officers and directors of the Company or any Restricted Subsidiary
of the Company made in the ordinary course of business or pursuant to any
employee benefit plan, up to $5,000,000 in the aggregate at any one time
11
17
outstanding; (ix) loans and advances to vendors, suppliers and contractors of
the Company or any Restricted Subsidiary of the Company and made in the ordinary
course of business; (x) the receipt by the Company or its Restricted
Subsidiaries of consideration other than Cash Proceeds in any Asset Sale made in
compliance with the terms of the Indenture; (xi) so long as no Default or Event
of Default shall have occurred and be continuing, other Investments made after
the issue date of the Series A Notes not exceeding in the aggregate at any time
outstanding (A) $40,000,000, if at the time of the making of such Investment the
Notes are not rated BB+ or better by S&P or Bal or better by Moody's, or (B)
$50,000,000, if at the time of the making of such Investment the Notes are rated
BB+ or better by S&P or Bal or better by Moody's; (xii) any Lien permitted under
Section 4.09 hereof; and (xiii) Investments by Restricted Subsidiaries of the
Company not exceeding in the aggregate $10,000,000 at any one time outstanding
in Cash Equivalents described in clause (ii) of the definition of such term in
this Indenture, provided that for purposes of this clause (xiii) an instrument
referred to in such clause (ii) may be issued by any commercial banking
institution having capital and surplus of not less than $100,000,000.
"Permitted Liens" means (i) Liens for taxes, assessments, governmental
charges or claims that are not yet due or are being contested in good faith by
appropriate legal proceedings, provided that any reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor; (ii) statutory Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other similar Liens arising in
the ordinary course of business and with respect to amounts not yet delinquent
or being contested in good faith by appropriate legal proceedings, provided that
any reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor; (iii) Liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance or other types of social security; (iv)
Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory or regulatory obligations, bankers' acceptances, surety and
appeal bonds, government contracts, performance and return-of-money bonds and
other obligations of a similar nature incurred in the ordinary course of
business (exclusive of obligations for the payment of borrowed money); (v)
easements, rights-of-way, municipal and zoning ordinances and similar charges,
encumbrances, title defects or other irregularities that do not materially
interfere with the ordinary course of business of the Company or any of its
Subsidiaries, taken as a whole; (vi) Liens securing Purchase Money Obligations
permitted to be incurred by the provisions of the Indenture; (vii) leases or
subleases or licenses or sublicenses granted to others in the ordinary course of
business of the Company or any of its Restricted Subsidiaries, taken as a whole;
(viii) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Company or any of its
Restricted Subsidiaries relating to such property or assets; (ix) any interest
or title of a lessor in the property subject to any Capital Lease Obligation;
(x) Liens arising from filing Uniform Commercial Code financing statements
regarding leases; (xi) Liens on property of, or on shares of stock or
Indebtedness of, any corporation existing at the time such corporation becomes,
or becomes a part of, a Restricted Subsidiary; (xii) Liens in favor of the
Company or any Subsidiary; (xiii) Liens securing any real property or other
assets of the Company or any Restricted Subsidiary of the Company in favor of
the United States of America
12
18
or any State, or any department, agency, instrumentality or political
subdivision thereof, in connection with the financing of industrial revenue bond
facilities or of any equipment or other property designed primarily for the
purpose of air or water pollution control; provided that any such Lien on such
facilities, equipment or other property shall not apply to any other assets of
the Company or such Restricted Subsidiary of the Company; (xiv) Liens arising
from the rendering of a final judgment or order against the Company or any
Restricted Subsidiary of the Company that does not give rise to an Event of
Default; (xv) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof; (xvi) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; (xvii) Liens encumbering
customary initial deposits and margin deposits, and other Liens that are either
within the general parameters customary in the industry and incurred in the
ordinary course of business or otherwise permitted under the terms of the
Company Credit Facility, in each case securing Indebtedness under Commodity
Agreements, Interest Rate Agreements and Currency Agreements; and (xviii) Liens
arising out of conditional sale, title retention, consignment or similar
arrangements for the sale of goods entered into by the Company or any of its
Restricted Subsidiaries in the ordinary course of business in accordance with
the past practices of the Company and its Restricted Subsidiaries prior to the
Closing Date.
"Person" means any individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof or other entity of any kind.
"Ply Gem Credit Facility" means one or more credit facilities between Ply
Gem or any of its Subsidiaries and one or more banks or other institutional
lenders, as the same may be amended, extended, amended and restated,
supplemented or otherwise modified or replaced from time to time, specifically
designated in each such credit facility as a "Ply Gem Credit Facility." All Ply
Gem Credit Facilities are referred to collectively herein as the "Ply Gem Credit
Facility."
"Principal Property" means any manufacturing or processing plant, warehouse
or other building used by the Company or any Restricted Subsidiary, other than a
plant, warehouse or other building that, in the good faith opinion of the Board
of Directors as reflected in a Board Resolution, is not of material importance
as of the date such Board Resolution is adopted to the businesses conducted by
the Company and its Subsidiaries, on a consolidated basis, or conducted by any
Significant Subsidiary of the Company.
"Private Exchange" means a private exchange pursuant to Section 2(a) of the
Registration Rights Agreement.
"Purchase Money Obligations" means any Indebtedness of the Company or any
of its Restricted Subsidiaries incurred to finance the acquisition or
construction of any property or business (including Indebtedness incurred within
one year following such acquisition or construction), including Indebtedness of
a Person existing at the time such Person becomes a
13
19
Restricted Subsidiary of the Company or assumed by the Company or a Restricted
Subsidiary of the Company in connection with the acquisition of assets from such
Person; provided, however, that (i) any Lien on such Indebtedness shall not
extend to any property other than the property so acquired or constructed and
(ii) at no time shall the aggregate principal amount of outstanding Indebtedness
secured thereby be increased.
"Redeemable Stock" means any Equity Interest which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable before the Stated Maturity of the Notes), or upon the happening of
any event, matures or is mandatorily redeemable or is redeemable at the sole
option of the holder thereof, in whole or in part, prior to the Stated Maturity
of the Notes.
"Redemption Date" or "redemption date" means the date specified for
redemption of the Notes in accordance with the terms of the Notes and this
Indenture.
"Redemption Price" or "redemption price" shall have the meaning set forth
in paragraph 6 of the Notes.
"Registration Rights Agreement" means the Registration Rights Agreement
dated the date hereof between the Company and the Initial Purchasers named
therein.
"Restricted Subsidiary" means (i) any Subsidiary of the Company in
existence on the date of the Indenture, unless such Subsidiary shall have been
designated as an Unrestricted Subsidiary by resolution of the Board of Directors
of the Company as provided in and in compliance with the definition of
"Unrestricted Subsidiary", (ii) any Subsidiary of the Company (other than a
Subsidiary that is also a Subsidiary of an Unrestricted Subsidiary) organized or
acquired after the date of the Indenture, unless such Subsidiary shall have been
designated as an Unrestricted Subsidiary by resolution of the Board of Directors
of the Company as provided in and in compliance with the definition of
"Unrestricted Subsidiary" and (iii) any Unrestricted Subsidiary which is
designated as a Restricted Subsidiary by the Board of Directors of the Company;
provided that, immediately after giving effect to the designation referred to in
clause (iii), no Default or Event of Default shall have occurred and be
continuing and the Company could incur at least $1.00 of additional Indebtedness
under Section 4.07 hereof. The Company shall evidence any such designation to
the Trustee by promptly filing with the Trustee an Officers' Certificate
certifying that such designation has been made and stating that such designation
complies with the requirements of the immediately preceding sentence.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Notes" means the Company's 9 1/8% Series A Senior Notes due
September 1, 2007 to be issued pursuant to this Indenture.
14
20
"Series B Notes" means the Company's 9 1/8% Series B Senior Notes due
September 1, 2007 to be issued pursuant to this Indenture in the Exchange Offer
and the Private Exchange.
"Shelf Registration Statement" means a "shelf" registration statement of
the Company pursuant to the provisions of Section 2(b) of the Registration
Rights Agreement which covers all of the Registrable Securities (as defined in
the Registration Rights Agreement), on an appropriate form under Rule 415 under
the Act or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"Significant Subsidiary" means any Subsidiary that would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X promulgated by the SEC, as
such regulation is in effect on the date of the Indenture.
"Stated Maturity" means, with respect to any security or Indebtedness, the
date specified therein as the fixed date on which the principal of such security
or Indebtedness is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security or Indebtedness at the option of the holder thereof upon the
happening of any contingency).
"Subsidiary" of any Person means any corporation, partnership, association
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors or, in the case of a Person
which is not a corporation, the members of the appropriate governing board or
other group is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of such Person or a combination
thereof.
"Subsidiary Guarantor" means, with respect to any Subsidiary Guaranty, the
issuer of such Subsidiary Guaranty, so long as such Subsidiary Guaranty remains
outstanding.
"Subsidiary Guaranty" means any guaranty of the Notes pursuant to a
supplemental indenture executed and delivered pursuant to Section 4.14 hereof,
including as the context may require either or both of the guaranty of the Notes
set forth in Article 11 hereof attached hereto as Exhibit E, upon the execution
and delivery by a Subsidiary Guarantor of such supplemental indenture and any
separate guaranty of the Notes, substantially in the form of Exhibit F hereto,
or confirmation of guaranty executed and delivered by such Subsidiary Guarantor
pursuant to such supplemental indenture.
"TIA" means the Trust Indenture Act of 1939 as amended and as in effect on
the date of this Indenture; provided, however, that in the event the TIA is
amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
15
21
"Transfer Restricted Securities" means each Note until (i) the date on
which such Note has been exchanged by a Person other than a broker-dealer for an
Exchange Note in the Exchange Offer, (ii) following the exchange by a
broker-dealer in the Exchange Offer of a Note for an Exchange Note, the date on
which such Exchange Note is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iv) the date on which
such Note is distributed to the public pursuant to Rule 144 under the Securities
Act.
"Trust Officer," when used with respect to the Trustee, means any officer
assigned to and working in the corporate trust department of the Trustee or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
"Unrestricted Subsidiary" means, until such time as any of the following
shall be designated as a Restricted Subsidiary of the Company by the Board of
Directors of the Company as provided in and in compliance with the definition of
"Restricted Subsidiary," (i) any Subsidiary of the Company or of a Restricted
Subsidiary organized or acquired after the date of the Indenture that is
designated concurrently with its organization or acquisition as an Unrestricted
Subsidiary by resolution of the Board of Directors of the Company, (ii) any
Subsidiary of any Unrestricted Subsidiary, and (iii) any Restricted Subsidiary
of the Company that is designated as an Unrestricted Subsidiary by resolution of
the Board of Directors of the Company, provided that, (a) immediately after
giving effect to such designation, no Default or Event of Default shall have
occurred and be continuing, (b) any such designation shall be deemed the making
of a Restricted Payment at the time of such designation in an amount equal to
the Fair Market Value of the Investment in such Subsidiary and shall be subject
to the restrictions contained in Section 4.06, and (c) such Subsidiary or any of
its Subsidiaries does not own any Capital Stock or Indebtedness of, or own or
hold any Lien on any property of, the Company or any other Restricted Subsidiary
of the Company that is not a Subsidiary of the Subsidiary to be so designated. A
Person may be designated as an Unrestricted Subsidiary only if and for so long
as such Person (i) has no Indebtedness other than Non-Recourse Debt; (ii) is a
Person with respect to which neither the Company nor any of its Restricted
Subsidiaries has any direct or indirect obligation (a) to subscribe for
additional Equity Interests or (b) to make any payment to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results, except to the extent any such direct or
indirect obligation would then be permitted in accordance with Section 4.06; and
(iii) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Company or any of its Restricted
Subsidiaries.
16
22
The Company shall evidence any designation pursuant to clause (i) or (iii) of
the first sentence hereof to the Trustee by filing with the Trustee within 45
days of such designation an Officers' Certificate certifying that such
designation has been made and that such designation complies with the
requirements of the Indenture and all conditions thereto have been satisfied.
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such Person
to the extent the entire voting share capital of such Subsidiary (other than
directors' qualifying shares) is owned by such Person (either directly or
indirectly through Wholly-Owned Subsidiaries).
SECTION 1.02 OTHER DEFINITIONS.
Term Defined
---- in
Section
-------
"Act" .................................................... 1.05
"Bankruptcy Law" ......................................... 6.01
"Cash Proceeds" .......................................... 4.12
"Change of Control" ...................................... 4.11
"Change of Control Offer" ................................ 4.11
"Change of Control Payment Date" ......................... 4.11
"Custodian" .............................................. 6.01
"Event of Default" ....................................... 6.01
"Excess Proceeds Offer" .................................. 4.12
"IAI Global Note" ........................................ 2.01
"incurrence" ............................................. 4.07
"Legal Holiday" .......................................... 10.08
"Offshore Notes Exchange Date" ........................... 2.01
"Paying Agent" ........................................... 2.03
"QIB Global Note" ........................................ 2.01
"refinance" .............................................. 4.07
"Refinancing Indebtedness" ............................... 4.07
"Registrar" .............................................. 2.03
"Regulation S Purchasers" ................................ 2.01
"Reporting Subsidiary" ................................... 4.06
"Restricted Payment" ..................................... 4.06
"Securities Act" ......................................... 7.04
"surviving entity" ....................................... 5.01
"Temporary Regulation S Global Note" ..................... 2.01
"U.S. Government Obligations" ............................ 8.01
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the TIA, such provision is incorporated
by reference in and
17
23
made a part of this Indenture. The following TIA terms used in this Indenture
have the following meanings:
"Commission" means the SEC.
"Indenture to be qualified" means this Indenture.
"Indenture trustee" or "institutional trustee" means the Trustee.
"Obligor" on the Notes means the Company and each Subsidiary Guarantor, if
any, and each other obligor on the Notes or any Subsidiary Guaranty.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04 RULES OF CONSTRUCTION. Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in the plural
include the singular.
SECTION 1.05 ACTS OF HOLDERS.
(1) any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in
favor of the Trustee and the Company, if made in the manner provided in
this Section.
18
24
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(3) The ownership of Notes shall be proved by the Registrar.
(4) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note as the holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee
or the Company in reliance thereon, whether or not notation of such action
is made upon such Note.
(5) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company
may, at its option, by or pursuant to a Board Resolution, fix in advance a
record date for the determination of Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but
the Company shall have no obligation to do so. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only
the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of outstanding Notes have authorized or agreed or
consented to such request, demand, authorization, directions, notice,
consent, waiver or other Act, and for that purpose the outstanding Notes
shall be computed as of such record date, PROVIDED that no such
authorization, agreement or consent by the Holders on such record date
shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record
date.
SECTION 1.06 EXCHANGE RATES. Except as otherwise required under GAAP or in
connection with the preparation of any financial statements, any computation of
the U.S. dollar equivalent of any foreign currency required for any calculation
or computation under this Indenture (including, without limitation, in
connection with the limitations under the definition of "Consolidated Net
Income" and Section 4.03 hereof) shall be made at the exchange rate published in
THE WALL STREET JOURNAL which is in effect as of the close of business on the
first Business Day in the month in which such computation is required to be made
hereunder.
ARTICLE 2
THE NOTES
---------
SECTION 2.01 FORM AND DATING. The Original Notes and the Trustee's
certificate of authentication relating thereto shall be substantially in the
form of Exhibit A hereto, with such
19
25
appropriate insertions, substitutions and other variations as are required or
permitted by this Indenture. The Exchange Notes and the Trustee's certificate of
authentication relating thereto shall be substantially in the form of Exhibit A
hereto, with such appropriate insertions, substitutions and other variations as
are required or permitted by this Indenture; PROVIDED, that Exchange Notes
issued in the Exchange Offer shall not bear the legend set forth in Exhibit A
hereto as indicated by footnote 2; PROVIDED, FURTHER, that Exchange Notes issued
in either the Exchange Offer or the Private Exchange shall not contain any
reference to Liquidated Damages and shall not include paragraph 19 of Exhibit A
hereto. The Notes may have notations, legends or endorsements required by this
Indenture, law, stock exchange rule, depository rule or usage. Any such
notation, legend or endorsement shall be delivered in writing to the Trustee by
the Company. Each Note shall be dated the date of its issuance and show the date
of its authentication.
The terms and provisions contained in the Notes, annexed hereto as Exhibit
A, shall constitute, and are hereby expressly made, a part of this Indenture. To
the extent applicable, the Company, by its execution and delivery of this
Indenture, expressly agrees to such terms and provisions and to be bound
thereby.
Original Notes offered and sold to "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act) ("QIBs") and institutional
"Accredited Investors" (within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act ("IAIs"), in each case in accordance with Rule 144A
under the Securities Act ("Rule 144A") as provided in the Purchase Agreement,
shall be issued initially in the form of two permanent Global Notes (with
separate CUSIP numbers) substantially in the form set forth in Exhibit A
(including the text set forth in footnote 1 thereto and the additional schedule
referred to therein, but excluding the text set forth in footnote 3 thereto),
deposited with the Trustee, as custodian for the Depositor, duly executed by the
Company and authenticated by the Trustee for the Depository, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. One Global
Note (which may be represented by more than one certificate, if so required by
the Depository's rules regarding the maximum principal amount to be represented
by a single certificate) will represent Original Notes sold to QIBs (the "QIB
Global Note"), and the other will represent Original Notes sold to IAIs (the
"IAI Global Note").
Original Notes offered and sold in reliance on Regulation S, if any, shall
be issued initially in the form of one Global Note (the "Temporary Regulation S
Global Note") having a different CUSIP number than that of the QIB Global Note
or the IAI Global Note substantially in the form set forth in Exhibit A
(including the text set forth in footnotes 1 and 3 thereto and the additional
schedule referred to therein), deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Temporary Regulation S Global Note may not be issued
in definitive form until the later of the completion of the distribution of the
Original Notes and the termination of the "restricted period" (as defined in
Regulation S) with respect to the offer and sale of the Original Notes (the
"Offshore Notes Exchange Date"). The Company shall promptly notify the Trustee
in writing of the
20
26
occurrence of the Offshore Notes Exchange Date and, at any time following the
Offshore Notes Exchange Date, upon receipt by the Trustee and the Company of a
certificate substantially in the form set forth in Exhibit G, the Company shall
execute, and the Trustee shall authenticate and deliver, one or more permanent
certificated Definitive Notes in registered form pursuant to Section 2.06(4).
The aggregate principal amount of each Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository or its nominee, as hereinafter provided. Transfers
of Original Notes from QIBs to IAIs or persons who acquire an interest in the
Original Notes pursuant to Regulation S (the "Regulation S Purchasers"), from
IAIs to QIBs or Regulation S Purchasers or from Regulation S Purchasers to QIBs
or IAIs, will be represented by appropriate increases and decreases to the
respective amounts of the appropriate Global Notes; provided, however, that such
increases or decreases in the amount of Global Notes shall be made by the
Trustee, as Note Custodian, in accordance with the instructions given by the
Holder thereof as required by Section 2.06 hereof.
To the extent permitted by the terms of the 9-7/8% Notes and the indenture
governing the 9-7/8% Notes (the "9-7/8% Indenture"), all obligations owing under
this Indenture and the Notes, including interest accruing after the occurrence
of an event described in clause (5) or (6) of Section 6.01 of the Indenture,
shall constitute "Specified Senior Indebtedness" or similarly-designated
indebtedness under the 9-7/8% Notes and the 9-7/8% Indenture and under any other
existing or future subordinated indebtedness of the Company.
SECTION 2.02 EXECUTION AND AUTHENTICATION. The Notes shall be executed on
behalf of the Company by its Chairman of the Board, one of its Vice Chairmen,
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any such officer on the Notes may be manual or facsimile.
If an Officer of the Company whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
Only such Notes as shall bear thereon a certificate of authentication
substantially in the form set forth in Exhibit A hereto, manually executed by
the Trustee, shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate of authentication executed by the
Trustee upon any Note executed by the Company shall be conclusive evidence that
the Note so authenticated has been duly authenticated and made available for
delivery hereunder.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Notes executed by the Company to the Trustee
for authentication, together with a request for the authentication and delivery
of such Notes signed by an Officer of the Company accompanied by any certificate
and opinions required by the TIA and the following
21
27
paragraph, and the Trustee, in accordance with such request, shall authenticate
and deliver such Notes as provided in this Indenture.
The Trustee shall authenticate (i) Original Notes for original issue in the
aggregate principal amount not to exceed $310,000,000, and (ii) Exchange Notes
issued, either (x) in the Exchange Offer for the Original Notes pursuant to the
Exchange Offer Registration Statement filed with the Commission from time to
time, for issue only in exchange for a like principal amount of Original Notes
or (y) in the Private Exchange, for issue only in exchange for a like principal
amount of Original Notes, in each case, upon written order of the Company in the
form of an Officers' Certificate. Such Officers' Certificate shall specify the
amount of Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Original Notes or Exchange Notes and
whether the Notes are to be Definitive Notes or Global Notes. Except as
contemplated by Section 2.07 hereof, the aggregate principal amount of Notes
outstanding at any time may not exceed $310,000,000. Notwithstanding the
foregoing, all Notes issued under this Indenture shall vote and consent together
on all matter as one class and no series of Notes will have the right to vote or
consent as a separate class on any matter.
The Notes shall be issuable in fully registered form only, without coupons,
in denominations of $1,000 and any integral multiple thereof.
The Trustee shall act as the initial authenticating agent. Thereafter, the
Trustee may appoint an authenticating agent reasonably acceptable to the Company
to authenticate the Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company. The Trustee shall not be liable for any act or
failure to act of the authenticating agent to perform any duty either required
herein or authorized herein to be performed by such person in accordance with
this Indenture. Each authenticating agent shall be acceptable to the Company and
otherwise comply in all respects with the eligibility requirements of the
Trustee contained in this Indenture.
SECTION 2.03 REGISTRAR ANS PAYING AGENT. The Company shall maintain or
cause to be maintained an office or agency where (a) Notes may be presented for
registration of transfer or for exchange ("Registrar"), (b) Notes may be
presented or surrendered for purchase or payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Notes may be
served. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agents. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee of the name and address of any Agent not a party to
this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate
22
28
compensation in accordance with Section 7.07 hereof. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which shall incorporate the provisions of the
TIA. The agreement shall implement the provisions of this Indenture that relate
to such Agent. The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and agent for service of notices and demands in connection with the
Notes.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST. Except as otherwise
provided herein, prior to each due date of the principal, premium, if any, and
interest on any Note, the Company shall deposit with the Paying Agent a sum of
money sufficient to pay such principal, premium, if any, and interest or
Liquidated Damages so becoming due. The Company shall require each Paying Agent
(other than the Trustee or the Company) to agree in writing that such Paying
Agent shall hold in trust for the benefit of the Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium, if any,
and interest on the Notes (whether such money has been paid to it by the Company
or any other obligor on the Notes) and shall notify the Trustee of any default
by the Company (or any other obligor on the Notes) in making any such payment.
At any time during the continuance of any such default, the Paying Agent shall,
upon the request of the Trustee, forthwith pay to the Trustee all money so held
in trust and account for any money disbursed to it. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and to account
for any money disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee. If the Company, a
Subsidiary or an Affiliate of either of them acts as Paying Agent, it shall
segregate the money held by it as Paying Agent and hold it as a separate trust
fund.
SECTION 2.05 HOLDER LIST The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of Holders. If the Trustee is not the Registrar, the Company shall
cause to be furnished to the Trustee on or before each interest payment date and
at such other times as the Trustee may request in writing, within five Business
Days of such request, a list in such form as the Trustee may reasonably require
of the names and addresses of Holders.
SECTION 2.06 TRANSFER AND EXCHANGE
(1) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive Notes
are presented to the Registrar with the request to register the transfer of
the Definitive Notes, or to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized denominations, the
Registrar shall register the transfer or make the
23
29
exchange as requested if its requirements for such transactions are met;
PROVIDED, HOWEVER, that the Definitive Notes presented or surrendered for
registration of transfer or exchange:
(a) shall be duly endorsed or accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Registrar duly
executed by the Holder thereof or by an attorney who is duly
authorized in writing to act on behalf of the Holder; and
(b) shall, in the case of a Transfer Restricted Security, be
accompanied by the following additional information and documents, as
applicable:
(i) if such Transfer Restricted Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from such
Holder to that effect (in substantially the form of Exhibit B
hereto); or
(ii) if such Transfer Restricted Securities are being
transferred (1) to a "qualified institutional buyer" (as defined
in Rule 144A under the Securities Act) in a transaction meeting
the requirements of Rule 144A under the Securities Act or (2)
pursuant to an exemption from registration in a transaction
meeting the requirements of Rule 144 under the Securities Act
(based upon 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
(iii) if such Transfer Restricted Securities are 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 (based upon 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);
(iv) if such Transfer Restricted Securities are being
transferred outside the U.S. to a foreign person pursuant to an
exemption from registration in a transaction meeting the
requirements of Regulation S under the Securities Act (based on
an Opinion of Counsel if the Company so requests), certification
to that effect from such Holder (in substantially the form of
Exhibits B and D hereto); or
24
30
(v) if such Transfer Restricted Securities are being
transferred in reliance on another exemption from the
registration requirements of the Securities Act (based upon 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).
(2) TRANSFER OF A DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN A
GLOBAL NOTE. A Definitive Note may not be exchanged for a beneficial
interest in a Global Note except upon satisfaction of the requirements set
forth below. Upon receipt by the Trustee of a Definitive Note, duly
endorsed or accompanied by a written instrument of transfer in form
satisfactory to the Trustee duly executed by the Holder thereof or by an
attorney who is duly authorized in writing to act on behalf of the Holder,
together with:
(a) if such Definitive Note is being delivered to the Trustee by
a Holder, without transfer, to enable such Holder to obtain a
beneficial interest in a Global Note, a certification from such Holder
to that effect (in substantially the form of Exhibit B hereto);
PROVIDED that such Holder provides a certification that such Holder is
otherwise permitted to hold a beneficial interest in a Global Note;
(b) if such Definitive Note is a Transfer Restricted Security and
is being transferred, certification, substantially in the form of
Exhibit B hereto, that either (A) such Definitive Note is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A under the Securities Act, (B) 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 (based upon an Opinion of Counsel if the Company so
requests), PROVIDED that the Trustee receives a certification from
such transferee (in substantially the form of Exhibit C hereto), or
(C) to a foreign person outside the U.S. pursuant to an exemption from
registration in a transaction meeting the requirements of Regulation S
under the Securities Act (based upon an Opinion of Counsel if the
Company so requests), PROVIDED, that the Trustee receives a
certification from such transferor (in substantially the form of
Exhibit D hereto); and
(c) whether or not such Definitive Note is a Transfer Restricted
Security, written instructions directing the Trustee to cause, or
directing the Note Custodian to cause in accordance with the standing
instructions and procedures existing between the Depository and the
Note Custodian, the aggregate principal amount of Notes represented by
the Global Note to be increased;
then the Trustee shall cancel such Definitive Note in accordance with Section
2.01 hereof and cause, or direct the Note Custodian to cause, in accordance with
the standing instructions and
25
31
procedures existing between the Depository and the Note Custodian, the aggregate
principal amount of Notes represented by the Global Note to be increased
accordingly. If no Global Notes are then outstanding, the Company shall issue
and, upon receipt of an authentication order in accordance with Section 2.02
hereof, and an agreement with the Depository in customary form and substance
acceptable to the Trustee, the Trustee shall authenticate a new Global Note in
the appropriate principal amount.
(3) TRANSFER AND EXCHANGE OF GLOBAL NOTES. The transfer and exchange
of Global Notes or beneficial interests therein shall be effected through
the Depository, in accordance with this Indenture and the procedures of the
Depository therefor, which shall include restrictions on transfer
comparable to those set forth herein to the extent required by the
Securities Act; provided, however, that neither the Trustee nor the
Registrar shall have any obligation to monitor or restrict the transfer of
any beneficial interest in the Notes transferable through the book-entry
facilities of the Depository.
(4) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
DEFINITIVE NOTE.
(a) Any Person having a beneficial interest in a Global Note may
upon request exchange such beneficial interest for a Definitive Note.
Upon receipt by the Trustee of written instructions or such other form
of instructions as is customary for the Depository from the Depository
or its nominee on behalf of any Person having a beneficial interest in
a Global Note, and, in the case of a Transfer Restricted Security, the
following additional information and documents (all of which may be
submitted by facsimile):
(i) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial
owner, a certification from such Person to that effect (in
substantially the form of Exhibit B hereto); or
(ii) if such beneficial interest is being transferred (1) to
a "qualified institutional buyer" (as defined in Rule 144A under
the Securities Act) in a transaction meeting the requirements of
Rule 144A under the Securities Act or (2) pursuant to an
exemption from registration in a transaction meeting the
requirements of Rule 144 under the Securities Act (based upon 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 the transferor (in
substantially the form of Exhibit B hereto); or
(iii) 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
26
32
the registration requirements of the Securities Act (based upon
an Opinion of Counsel if the Company so requests), a
certification to that effect from such transferor (in
substantially the form of Exhibit B hereto) and a certification
from the applicable transferee (in substantially the form of
Exhibit C hereto); or
(iv) if such beneficial interest is being transferred
outside the U.S. to a foreign person pursuant to an exemption
from registration in a transaction meeting the requirements of
Regulation S under the Securities Act (based upon an Opinion of
Counsel if the Company so requests), certifications to that
effect from such transferor (in substantially the form of
Exhibits B and D hereto); and
(v) if such beneficial interest is being transferred in
reliance on another exemption from the registration requirements
of the Securities Act (based upon an Opinion of Counsel if the
Company so requests), a certification to that effect from such
transferor (in substantially the form of Exhibits B and D
hereto);
then the Trustee or the Note Custodian, at the direction of the Trustee, shall,
in accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, cause the aggregate principal amount of
Global Notes to be reduced accordingly and, following such reduction, the
Company shall execute and, upon receipt of an authentication order in accordance
with Section 2.02 hereof, the Trustee shall authenticate and deliver to the
transferee a Definitive Note in the appropriate principal amount.
(b) Definitive Notes issued in exchange for a beneficial interest
in a Global Note pursuant to this Section 2.06(4) shall be registered
in such names and in such authorized denominations as the Depository,
pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Definitive Notes to or as directed by the Persons in whose names such
Notes are so registered.
(5) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTES.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (6) of this Section 2.06), a Global Note
may not be transferred except as a whole by the Depository to a nominee of
the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
(6) AUTHENTICATION OF DEFINITIVE NOTES. If at any time:
27
33
(a) the Company notifies the Trustee in writing that the
Depository for the Notes is no longer willing or able to act as
Depository for the Global Notes and a successor Depository for the
Global Notes is not appointed by the Company within 90 days after
delivery of such notice; or
(b) the Company, at its option, notifies the Trustee in writing
that it elects to cause the issuance of Definitive Notes under this
Indenture;
then the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate requesting the authentication and delivery of Definitive Notes, will
authenticate and deliver Definitive Notes, in an aggregate principal amount
equal to the principal amount of the Global Notes, in exchange for such Global
Notes and registered in such names as the Depository shall instruct the Trustee
or the Company in writing.
(7) LEGENDS.
(a) Except as permitted by the following paragraphs (c) and (d),
each Note certificate evidencing the Global Notes and the Definitive
Notes (and all Notes issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form until
after the second anniversary of the later of the date of original
issuance of the Note and the last day on which the Company or any
Affiliate of the Company was the owner of such Note (or any
predecessor Note or any beneficial interest therein):
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
PERSON EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT), (B) IT IS AN "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) WHO IS AN INSTITUTION (AN "INSTITUTIONAL ACCREDITED
INVESTOR"), OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
NOTE OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT PRIOR TO
THE DATE WHICH IS TWO YEARS AFTER THE LATER OF THE DATE OF
ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE ON WHICH THE
ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE
(THE "RESALE RESTRICTION TERMINATION DATE") OFFER,
28
34
SELL OR OTHERWISE TRANSFER THIS NOTE, EXCEPT (A) TO THE ISSUER,
(B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH THE RESALE PROVISIONS OF RULE 144A UNDER THE
SECURITIES ACT, OR TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A WRITTEN
CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) PURSUANT
TO THE RESALE LIMITATIONS PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (F) OUTSIDE THE
U.S. TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF REGULATION S UNDER THE SECURITIES ACT OR (G)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (BASED, IN THE CASE OF CLAUSES
(C), (D), (F) AND (G) ABOVE, UPON AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE ISSUER IF THE ISSUER SO REQUESTS),
SUBJECT IN EACH OF THE FOREGOING CASES TO ANY REQUIREMENT OF LAW
THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF SUCH
ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE
ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION
AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL NOT
APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE."
(b) Each Global Note shall also bear the following legend:
29
35
"UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY
TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX,
XXX XXXX) ("XXX"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN. THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE REFERRED TO HEREINAFTER. THIS GLOBAL NOTE MAY NOT BE EXCHANGED,
IN WHOLE OR IN PART, FOR A NOTE REGISTERED IN THE NAME OF ANY PERSON OTHER
THAN THE DEPOSITORY TRUST COMPANY OR A NOMINEE THEREOF EXCEPT IN THE
CIRCUMSTANCES SET FORTH IN SECTION 2.06 OF THE INDENTURE, AND MAY NOT BE
TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.06 OF THE INDENTURE. BENEFICIAL
INTEREST IN THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE
WITH SECTION 2.06 OF THE INDENTURE."
(c) Each Temporary Regulation S Global Note shall also bear the
following legend:
"THIS SECURITY MAY NOT BE OFFERED OR SOLD TO A U.S. PERSON (AS SUCH
TERM IS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) OR FOR THE
ACCOUNT OR BENEFIT OF A U.S. PERSON PRIOR TO THE EXPIRATION OF THE OFFSHORE
NOTES EXCHANGE DATE (AS DEFINED IN THE INDENTURE), AND NO TRANSFER OR
EXCHANGE OF THIS SECURITY MAY BE MADE FOR AN INTEREST IN A CERTIFICATED
SECURITY UNTIL AFTER THE LATER OF THE DATE OF EXPIRATION OF THE OFFSHORE
NOTES
30
36
EXCHANGE DATE AND THE DATE ON WHICH THE PROPER REQUIRED CERTIFICATION
RELATING TO SUCH INTEREST HAS BEEN PROVIDED IN ACCORDANCE WITH THE TERMS OF
THE INDENTURE, TO THE EFFECT THAT THE BENEFICIAL OWNER OR OWNERS OF SUCH
INTEREST ARE NOT U.S. PERSONS."
(d) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Note) pursuant to Rule 144 under the Securities Act or an effective
registration statement under the Securities Act:
(i) in the case of any Transfer Restricted Security that is
a Definitive Note, the Registrar shall permit the Holder thereof
to exchange such Transfer Restricted Security for a Definitive
Note that does not bear the legend set forth in clause (a) above
and rescind any restriction on the transfer of such Transfer
Restricted Security; and
(ii) in the case of any Transfer Restricted Security
represented by a Global Note, such Transfer Restricted Security
shall not be required to bear the legend set forth in clause (a)
above if all other interests in such Global 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
Securities shall continue to be subject to the provisions of
Section 2.06(3) hereof; PROVIDED, HOWEVER, that with respect to
any request for an exchange of a Transfer Restricted Security
that is represented by a Global Note for a Definitive Note that
does not bear a legend set forth in clause (a) 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).
(e) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate Series B Notes in exchange for Series A
Notes accepted for exchange in the Exchange Offer, which Series B
Notes shall not bear the legend set forth in clause (a) above, and the
Registrar shall rescind any restriction on the transfer of such Notes,
in each case unless the Holder of such Series A Notes is either (A) a
broker-dealer, (B) a Person participating in the distribution (within
the meaning of the Securities Act) of the Series A Notes or (C) a
Person who is an affiliate (as defined in Rule 501 under the
Securities Act) of the Company. The Company shall identify to the
31
37
Trustee such Holders of the 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.
(f) By its acceptance of any Note bearing the legend set forth in
Section 2.06(7)(a) hereof, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and
in such legend and agrees that it will transfer such Note only as
provided in this Indenture.
(8) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTE. At such time as all
beneficial interests in a Global Note have either been exchanged for
Definitive Notes, redeemed, repurchased or canceled, such Global Note shall
be returned to or retained and canceled by the Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global Note is
exchanged for Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
and an endorsement shall be made on such Global Note, by the Trustee or the
Note Custodian, at the direction of the Trustee to reflect such reduction.
(9) GENERAL PROVISIONS WITH RESPECT TO TRANSFER AND EXCHANGE.
(a) To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate, pursuant to
the terms of this Indenture, Definitive Notes and Global Notes at the
Registrar's request.
(b) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charges payable upon
exchange or transfer pursuant to Section 2.09, 3.01, 4.11, 4.12, and
9.05 hereof).
(c) Neither the Company nor the Registrar shall be required to
register the transfer or exchange of any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being
redeemed in part.
(d) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global
Notes shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefit under this Indenture as
the Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(e) The Company shall not be required to issue or register the
transfer or exchange of Notes during a period beginning at the opening
of 15 days before the
32
38
day of any selection of Notes for redemption under Section 3.02 and
ending at the close of business on the day of selection.
(f) Prior to due presentment for registration of transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of
such Note for the purpose of receiving payment of principal of, and
premium, interest and Liquidated Damages, if any, on such Note, and
neither the Trustee, any Agent nor the company shall be affected by
notice to the contrary.
(g) The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.02 hereof.
(h) Neither the Company nor the Trustee shall be liable for any
delay by the Depository in identifying the beneficial owners of the
Notes and each such Person may conclusively rely on, and shall be
protected in relying on, instructions from the Depository for all
purposes (including with respect to the registration and delivery, and
the respective principal amounts, of any Notes to be issued).
(i) Members of, or participants in, the Depository shall have no
rights under this Indenture with respect to any Global Note held on
their behalf by the Depository, or the Trustee as the Note Custodian,
or under the Global Note, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as
the absolute owner of the Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall (x) prevent the
Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other
authorization furnished by the Depository or (y) impair, as between
the Depository and members of, or participants in, the Depository, the
operation of customary practices governing the exercise of the rights
of a Holder of any Note.
SECTION 2.07 REPLACEMENT NOTES. If any mutilated Note is surrendered to the
Company or the Trustee, or the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Note, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Note has been acquired by a bona fide
purchaser, the Company shall execute, and upon its written request, the Trustee
shall authenticate and make available for delivery, in exchange for any such
mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note
of like tenor and principal amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Note has become or is
about to become due and payable, or is about to be purchased by the Company
pursuant to Article 3
33
39
hereof, the Company in its discretion may, instead of issuing a new Note, pay or
purchase such Note, as the case may be.
Upon the issuance of new Notes under this Section 2.07, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Note issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all benefit of this Indenture equally and proportionately
with any and all other Notes duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.08 OUTSTANDING NOTES; DETERMINATIONS OF HOLDERS' ACTION. Notes
outstanding at any time are all the Notes authenticated by the Trustee except
for those canceled by it, those delivered to it for cancellation, those referred
to in Section 2.07 hereof, or purchased by the Company pursuant to Article 3
hereof and those described in this Section 2.08 as not outstanding. A Note does
not cease to be outstanding because the Company or an Affiliate thereof holds
the Note; PROVIDED, HOWEVER, that in determining whether the holders of the
requisite principal amount of Notes have given or concurred in any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Company, any other obligor upon the Notes or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
outstanding, except that, in determining whether the Trustee shall be protected
in relying upon such request, demand, authorization, direction, notice, consent
or waiver, only Notes which a Trust Officer of the Trustee knows based upon an
examination of the Register to be so owned shall be so disregarded. Subject to
the foregoing, only Notes outstanding at the time of such determination shall be
considered in any such determination (including determinations pursuant to
Articles 6 and 9).
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding
unless the Trustee receives proof satisfactory to it that the replaced Note is
held by a bona fide purchaser.
If the Paying Agent (other than the Company) holds, in accordance with this
Indenture, at maturity or on a Redemption Date, money sufficient to pay the
Notes payable on that date, then immediately on the date of maturity or such
Redemption Date, as the case may be, such Notes shall cease to be outstanding
and interest, if any, on such Notes shall cease to accrue.
34
40
SECTION 2.09 TEMPORARY NOTES. Pending the preparation of Definitive Notes,
the Company may execute, and upon receipt of an Officers' Certificate from the
Company, the Trustee shall authenticate and make available for delivery,
temporary Notes which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the Definitive Notes in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
Officers of the Company executing such Notes may determine, as conclusively
evidenced by their execution of such Notes.
If temporary Notes are issued, the Company will cause Definitive Notes to
be prepared without unreasonable delay. After the preparation of Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Company
designated for such purpose pursuant to Section 2.03 hereof, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary Notes,
the Company shall execute and the Trustee, upon receipt of an Officers'
Certificate from the Company, shall authenticate and make available for delivery
in exchange therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.10 CANCELLATION. All Notes surrendered for payment, purchase by
the Company, redemption by the Company pursuant to Article 3 hereof, or
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly canceled by
it. The Company may at any time deliver to the Trustee for cancellation any
Notes previously authenticated and made available for delivery hereunder which
the Company may have acquired in any manner whatsoever, and all Notes so
delivered shall be promptly canceled by the Trustee. The Company may not
reissue, or issue new Notes to replace Notes it has paid or delivered to the
Trustee for cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed by the Trustee.
SECTION 2.11 CUSIP NUMBER. The Company, in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and the Trustee shall use CUSIP
numbers in notices of redemption or exchange as a convenience to Holders;
provided that any such notice shall state that no representation is made as to
the correctness of such numbers either as printed on the Notes or as contained
in any notice of redemption or exchange and that reliance may be placed only on
the other identification number printed on the Notes and any redemption shall
not be affected by any defect in or omission of such numbers.
SECTION 2.12 DEFAULTED INTEREST. If the Company defaults on a payment of
interest on the Notes, it shall pay the defaulted interest, plus (to the extent
lawful) any interest payable on the defaulted interest (as provided in Section
4.01), to the Persons who are Holders on a subsequent special record date, and
such special record date, as used in this Section 2.12 with respect to the
35
41
payment of any defaulted interest, shall mean the 15th day next preceding the
date fixed by the Company for the payment of defaulted interest, whether or not
such day is a Business Day. At least 15 days before the subsequent special
record date, the Company shall mail to each Holder and to the Trustee a notice
that states the subsequent special record date, the payment date and the amount
of defaulted interest to be paid. The Company may also pay defaulted interest in
any other lawful manner.
SECTION 2.13 LIQUIDATED DAMAGES UNDER REGISTRATION RIGHTS AGREEMENT. Under
certain circumstances, the Company shall be obligated to pay certain Liquidated
Damages to the Holders, all as set forth in Section 2 of the Registration Rights
Agreement. In any such case, and for all purposes hereunder, the Trustee shall
rely conclusively upon the Company's certification as to the existence and
amount of any obligation to pay any such Liquidated Damages, and as to any other
matters pertaining thereto.
ARTICLE 3
REDEMPTION
----------
SECTION 3.01 RIGHT TO REDEEM; NOTICES TO TRUSTEE. At any time on and after
September 1, 2002, the Company, at its option, may redeem the Notes for cash in
accordance with this Article 3 and the provisions of paragraph 6 of the Notes.
If the Company elects to redeem Notes pursuant to paragraph 6 of the Notes, it
shall notify the Trustee in writing of the Redemption Date, the principal amount
of Notes to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 at least 45 days before the Redemption Date (unless a shorter
notice shall be satisfactory to the Trustee).
SECTION 3.02 SELECTION OF NOTES TO BE REDEEMED. If less than all the
outstanding Notes are to be redeemed at any time, the Trustee shall select the
Notes to be redeemed by lot or, if such method is prohibited by the rules of any
stock exchange on which the Notes are then listed, any other method the Trustee
considers reasonable. The Trustee shall make the selection at least 30 but not
more than 60 days before the Redemption Date from outstanding Notes not
previously called for redemption. Notes and portions of them the Trustee selects
shall be in principal amount of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be redeemed.
SECTION 3.03 NOTICE OF REDEMPTION. At least 30 days but not more than 60
day before a Redemption Date, the Company shall mail or cause to be mailed a
notice of redemption by first-class mail, postage prepaid, to each Holder of
Notes to be redeemed at the Holder's last address as it shall appear on the
registry book. A copy of such notice shall be mailed to the Trustee on the same
day the notice is mailed to Holders of Notes.
36
42
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number (subject to the provisions of Section 2.11
hereof);
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(6) if fewer than all the outstanding Notes are to be redeemed, the
identification and principal amounts of the particular Notes to be
redeemed; and
(7) that, unless the Company defaults in making such redemption
payment together with accrued and unpaid interest and Liquidated Damages,
if any, to the Redemption Date, interest will cease to accrue on Notes
called for redemption on and after the Redemption Date.
At the Company's written request, made at least 45 days prior to the
Redemption Date, the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense; PROVIDED, HOWEVER, that in all
cases, the text of such notice of redemption shall be prepared or approved by
the Company and the Trustee shall have no responsibility whatsoever with regard
to such notice being accurate or correct.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, Notes called for redemption become due and payable on the Redemption Date
and at the Redemption Price. Upon the later of the Redemption Date and the date
such Notes are surrendered to the Paying Agent, such Notes called for redemption
shall be paid at the Redemption Price if money sufficient for that purpose has
been deposited as provided in Section 3.05 hereof.
Notice of redemption shall be deemed to be given when mailed in the manner
provided in Section 3.03, whether or not the Holder receives the notice. In any
event, failure to give such notice, or any defect therein, shall not affect the
validity of the proceedings for the redemption of the Notes.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE. Prior to the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or a Subsidiary
or an Affiliate of either of them is the Paying Agent, shall segregate and hold
in trust) money sufficient to pay the Redemption Price of all Notes to be
redeemed on that date other than Notes or portions of
37
43
Notes called for redemption which prior thereto have been delivered by the
Company to the Trustee for cancellation.
SECTION 3.06 NOTES REDEEMED IN PART . Upon surrender of a Note that is
redeemed in part, the Company shall execute, and the Trustee shall authenticate
at the expense of the Company and make available for delivery to the Holder, a
new Note in an authorized denomination equal in principal amount to the
unredeemed portion of the Note surrendered.
ARTICLE 4
COVENANTS
---------
SECTION 4.01 PAYMENT OF NOTES . The Company shall pay the principal of,
premium, if any, and interest (including interest accruing on or after the
filing of a petition in bankruptcy or reorganization relating to the Company,
whether or not a claim for post-filing interest is allowed in such proceeding)
on the Notes on (or prior to) the dates and in the manner provided in the Notes
or pursuant to this Indenture. An installment of principal, premium, if any, or
interest shall be considered paid on the applicable date due if on such date the
Trustee or the Paying Agent shall have received before 12:00 noon on such date
and shall then hold, in accordance with this Indenture, money sufficient to pay
all of such installment then due. The Company shall pay all Liquidated Damages,
if any, in the same manner on the dates and in the amounts set forth in the
Registration Rights Agreement. 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. The Company shall pay
interest on overdue principal and premium, if any, and interest on overdue
installments of interest and Liquidated Damages, if any (including interest
accruing on or after the filing of a petition in bankruptcy or reorganization
relating to the Company whether or not a claim for post-filing interest is
allowed in such proceeding), to the extent lawful, at 2% above the rate per
annum borne by the Notes, which interest on overdue interest shall accrue from
the date such amounts became overdue.
SECTION 4.02 REPORTS.
(1) Whether or not required by the rules and regulations of the SEC,
so long as any Notes are outstanding, the Company will furnish to the
Holders of Notes (i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q
and 10-K if the Company were required to file such Forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" that describes the financial condition and results of
operations of the Company and its Subsidiaries and, with respect to the
annual information only, a report thereon by the Company's independent
certified public accountants and (ii) all
38
44
reports that would be required to be filed with the SEC on Form 8-K if the
Company were required to file such reports. In addition, whether or not
required by the rules and regulations of the SEC, the Company will file a
copy of all such information with the SEC for public availability (unless
the SEC will not accept such filing) and make such information available to
investors or prospective investors who request it in writing.
(2) If the Company is not subject to and in compliance with the
informational requirements of Sections 13 or 15(d) of the Exchange Act at
any time while the Notes constitute "restricted securities" within the
meaning of the Securities Act, it will furnish to the Holders of the Notes
and prospective purchasers of the Notes designated by Holders of the Notes,
upon their request, the information required to be delivered pursuant to
Rule 144A(d)(4) under the Securities Act until such time as the Company
either exchanges all of the Notes for the Exchange Notes or has registered
under the Securities Act and continues to maintain a registration statement
with respect to the resale of all of the Notes pursuant to the Registration
Rights Agreement.
(3) Upon qualification of this Indenture under the TIA, the Company
shall also comply with the provisions of TIA [section].314(a).
(4) For so long as any Transfer Restricted Securities remain
outstanding, the Company shall, if it is not subject to and in compliance
with the informational requirements of Section 13 or 15(d) of the Exchange
Act, furnish to all Holders or beneficial owners of Notes and prospective
purchasers of the Notes designated by the Holders of Transfer Restricted
Securities, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
(5) The Company shall deliver directly, or shall at its own expense
provide the Trustee with a sufficient number of copies thereof for delivery
at the Company's expense by the Trustee, all reports and other documents
and information that the Company may be required to deliver to the Holders
under this Section 4.02.
SECTION 4.03 COMPLIANCE CERTIFICATES.
(1) The Company shall deliver to the Trustee within 90 days after the
end of each of the Company's fiscal years an Officers' Certificate executed
by Officers of the Company, stating whether or not the signers know of any
Default or Event of Default. Such certificate shall contain a certification
from the principal executive officer, principal financial officer or
principal accounting officer of the Company as to his or her knowledge of
the Company's compliance with all conditions and covenants under this
Indenture. For purposes of this Section 4.03(1), such compliance shall be
determined without regard to any period of grace or requirement of notice
provided under this Indenture. If they do know of such a Default or Event
of Default, the certificate shall describe any such Default or Event of
Default, and its status.
39
45
(2) So long as not contrary to the then current recommendation of the
American Institute of Certified Public Accountants as certified by the
Company to the Trustee in an Officer's Certificate, the Company shall
deliver to the Trustee within 125 days after the end of each fiscal year a
written statement by the Company's independent certified public accountants
stating (a) that their audit examination has included a review of the terms
of this Indenture and the Notes as they relate to accounting matters, and
(b) whether, in connection with their audit examination, any Default has
come to their attention and, if such a Default has come to their attention,
specifying the nature and period of the existence thereof; PROVIDED,
HOWEVER, that the independent certified public accountants delivering such
statement shall not be liable in respect of such statement by reason of any
failure to obtain knowledge of any such Default or Event of Default that
would not be disclosed in the course of an audit examination conducted in
accordance with GAAP.
(3) The Company shall deliver to the Trustee as soon as possible and
in any event within 15 days after the Company becomes aware of the
occurrence of each Default or Event of Default, which is continuing, an
Officers' Certificate setting forth the details of such Default or Event of
Default, and the action which the Company proposes to take with respect
thereto.
SECTION 4.04 FURTHER INSTRUMENTS AND ACTS. Upon request of the Trustee, the
Company shall execute and deliver such further instruments and do such further
acts as may be reasonably necessary or proper to carry out more effectively the
purposes of this Indenture.
SECTION 4.05 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain or
cause to be maintained an office or agency of the Trustee, Registrar and Paying
Agent where Notes may be presented or surrendered for payment, where Notes may
be surrendered for registration of transfer, exchange or redemption and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The corporate trust office of the Trustee at the
address specified in Section 10.02 hereof shall initially be such office or
agency for all of the aforesaid purposes. The Company shall give prompt written
notice to the Trustee of any change of location of such office or agency. If at
any time the Company shall fail to maintain or cause to be maintained any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 10.02 hereof.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in location of any such other office or agency.
40
46
SECTION 4.06 LIMITATION ON RESTRICTED PAYMENTS. The Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution in respect of the
Company's or any such Restricted Subsidiary's Capital Stock or other Equity
Interests, except to the extent any such dividend or other distribution is (a)
actually received by the Company or a Restricted Subsidiary thereof or (b)
payable solely in shares of Capital Stock or other Equity Interests (other than
Redeemable Stock or Capital Stock convertible into any security other than such
Capital Stock) of the Company or such Restricted Subsidiary, as the case may be;
(ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock
or other Equity Interests of the Company or any of its Restricted Subsidiaries
(other than Capital Stock or other Equity Interests held by the Company or any
Wholly-Owned Subsidiary of the Company that is a Restricted Subsidiary); (iii)
prepay, repay, purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to a scheduled repayment date, scheduled mandatory
sinking fund payment date or maturity date any Indebtedness of the Company that
is subordinate in right of payment to the Notes (other than in connection with
any refinancing of such Indebtedness permitted by this Indenture); or (iv) make
any Investment other than Permitted Investments (each such action described in
any of clauses (i) through (iv) above being referred to as a "Restricted
Payment"), if, at the time of such Restricted Payment,
(1) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(2) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments declared or made on or after the issue date of
the Notes (including, without duplication, Restricted Payments described in
the next succeeding paragraph), exceeds the sum of (A) 50% of the
cumulative Consolidated Net Income of the Company for the period commencing
on January 1, 1997 through the last day of the fiscal quarter immediately
preceding the date of such proposed Restricted Payment (provided that if
the amount of such cumulative Consolidated Net Income divided by the number
of full fiscal quarters of the Company in the applicable period exceeds
$5,250,000, then such amount shall equal (i) 50% of the product of
$5,250,000 multiplied by the number of full fiscal quarters in such period
plus (ii) 75% of the amount in excess of the product of $5,250,000
multiplied by the number of full fiscal quarters in such period) (or, if
the cumulative Consolidated Net Income of the Company shall be a deficit,
minus 100% of such deficit); (B) the aggregate net cash proceeds, and the
Fair Market Value of any property other than cash, if any, received by the
Company (other than from a Restricted Subsidiary of the Company) from the
issuance and sale of either Capital Stock of the Company (other than
Redeemable Stock or any Capital Stock convertible into any security other
than such Capital Stock) or Indebtedness that is convertible into Capital
Stock of the Company (other than Redeemable Stock or any Capital Stock
convertible into any security other than such Capital Stock), to the extent
such Indebtedness is actually converted into such Capital Stock; (C) an
amount equal to any cash and the Fair Market Value (at the time of receipt)
of other assets received by the Company or any of its Restricted
Subsidiaries after the date of the issuance of the Notes as a dividend or
other distribution from any Unrestricted Subsidiary; (D) the Fair
41
47
Market Value of any Investment held by either the Company or any Restricted
Subsidiary of the Company in any Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is redesignated as a Restricted Subsidiary in
accordance with the provisions of this Indenture; and (E) $35,000,000; or
(3) the Company could not incur at least $1.00 of additional
Indebtedness pursuant to the first paragraph of Section 4.07 hereof.
The foregoing provisions shall not prohibit, so long as no Default or Event
of Default shall have occurred and be continuing or shall occur as a consequence
thereof, (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would have
complied with the provisions of this Indenture; (ii) the declaration and payment
by a Restricted Subsidiary of the Company which is required to file periodic
reports under Section 13 or 15(d) of the Exchange Act (a "Reporting Subsidiary")
of dividends on its common stock to all holders of such common stock on a pro
rata basis out of funds legally available for the payment of dividends, provided
that the amount of such dividends in any fiscal year of such Reporting
Subsidiary shall not exceed 25% of the Consolidated Net Income of such Reporting
Subsidiary for the immediately preceding fiscal year; (iii) the purchase,
redemption, acquisition, cancellation or other retirement for value of shares of
Capital Stock of the Company, options to purchase such shares or related stock
appreciation rights or similar securities held by current or former officers,
employees or directors (or their estates or beneficiaries under their estates)
of the Company or any Restricted Subsidiary; provided that the aggregate
consideration paid for such purchase, redemption, cancellation or other
retirement after the date hereof does not exceed $2,500,000 in the aggregate in
any fiscal year of the Company; (iv) the prepayment, repayment, purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value
of any or all of the 9 7/8% Notes at any time within one year of the scheduled
maturity date thereof; and (v) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness of the Company that is
subordinated in right of payment to the Notes in exchange for, or out of the
proceeds of a substantially concurrent offering of, shares of Capital Stock of
the Company (other than Redeemable Stock or any Capital Stock convertible into
any security other than such Capital Stock).
SECTION 4.07 LIMITATION ON ADDITIONAL INDEBTEDNESS. The Company shall not,
and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to (each, an "incurrence") any Indebtedness,
including, without limitation, Acquired Indebtedness; provided, however, that
the Company may incur Indebtedness if (i) no Default or Event of Default shall
have occurred and be continuing at the time or after giving effect to the
incurrence of such Indebtedness and (ii) the Consolidated Cash Flow Coverage
Ratio of the Company for the four full fiscal quarters ending immediately prior
to the date of the incurrence of such additional Indebtedness is at least 2.0 to
1.0.
The foregoing limitations set forth in this Section 4.07 shall not apply,
without duplication, to:
42
48
(i) Existing Indebtedness;
(ii) Indebtedness of (a) the Company represented by the Notes and
this Indenture or (b) any Subsidiary Guarantor under any Subsidiary
Guaranty;
(iii) Indebtedness of the Company and its Restricted Subsidiaries
under the Company Credit Facility; PROVIDED, that the aggregate
principal amount of Indebtedness (including the available undrawn
amount of any letters of credit issued thereunder) so incurred on any
date, together with all other Indebtedness incurred pursuant to this
clause (iii) and outstanding on such date, shall not exceed the
greater of (a) $75,000,000 and (b) the sum of 85% of Eligible
Receivables of the Company and its Subsidiaries, plus 65% of Eligible
Inventory of the Company and its Subsidiaries;
(iv) Indebtedness of (a) Broan Limited and any Canadian
Subsidiaries which are Restricted Subsidiaries under the Broan Limited
Credit Facility; PROVIDED that (1) the aggregate outstanding principal
amount (including the available undrawn amount of any letters of
credit issued thereunder) so incurred on any date, together with all
other Indebtedness incurred pursuant to this clause (iv) and
outstanding on such date, shall not exceed the greater of (x)
$30,000,000 (Canadian) and (y) the sum of 85% of Eligible Receivables
of Broan Limited and the Canadian Subsidiaries which are Restricted
Subsidiaries plus 65% of Eligible Inventory of Broan Limited and the
Canadian Subsidiaries which are Restricted Subsidiaries (but without
duplication of any such Eligible Receivables or Eligible Inventory of
Broan Limited and the Canadian Subsidiaries used as a basis to incur
Indebtedness pursuant to clause (iii) above) and (2) such Indebtedness
shall be secured only by Liens on assets of Broan Limited and the
Canadian Subsidiaries which are Restricted Subsidiaries; and (b) the
Company under its limited guaranty of not more than $20,000,000
(Canadian) of the Indebtedness of Broan Limited and the Canadian
Subsidiaries which are Restricted Subsidiaries under the Broan Limited
Credit Facility;
(v) Indebtedness of Universal-Xxxxxx Corporation for facility
expansion or improvement or joint venture investment purposes not
exceeding at any time $6,000,000 in aggregate outstanding principal
amount and, if secured, secured only by Liens on assets of
Universal-Xxxxxx Corporation or the applicable joint venture;
(vi) Indebtedness of the Company to any of its Wholly-Owned
Subsidiaries that is a Restricted Subsidiary, PROVIDED that such
Indebtedness
43
49
is contractually subordinated in right of payment to the Notes, or
Indebtedness of any Subsidiary of the Company that is a Restricted
Subsidiary to the Company or to any other Wholly-Owned Subsidiary of
the Company that is a Restricted Subsidiary, PROVIDED that any such
Indebtedness incurred by a Subsidiary Guarantor is contractually
subordinated in right of payment to its guarantee of the Notes;
PROVIDED further that if the Company or any of its Restricted
Subsidiaries incurs Indebtedness to a Wholly-Owned Subsidiary of the
Company that is a Restricted Subsidiary which, at any time after such
incurrence, ceases to be a Wholly-Owned Subsidiary or ceases to be a
Restricted Subsidiary, then all such Indebtedness in excess of the
amount of Allowable Subsidiary Loans shall be deemed to have been
incurred at the time such former Wholly-Owned Subsidiary ceases to be
a Wholly-Owned Subsidiary of the Company or ceases to be a Restricted
Subsidiary;
(vii) Indebtedness of a Restricted Subsidiary under a guaranty of
Indebtedness of the Company (other than the Notes) which causes such
Restricted Subsidiary to become a Subsidiary Guarantor pursuant to the
provisions of Section 4.14 hereof;
(viii) Indebtedness of the Company and its Restricted
Subsidiaries under Interest Rate Agreements, Currency Agreements and
Commodity Agreements, PROVIDED that (a) in the case of Interest Rate
Agreements, such Interest Rate Agreements relate to Indebtedness
permitted to be incurred under this Indenture and the notional
principal amount of the obligations of the Company and its Restricted
Subsidiaries under such Interest Rate Agreements does not exceed the
principal amount of such Indebtedness, and (b) in the case of Currency
Agreements that relate to other Indebtedness, such Currency Agreements
do not increase the Indebtedness of the Company and its Restricted
Subsidiaries outstanding at any time other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(ix) Indebtedness of the Company and its Restricted Subsidiaries
incurred in the ordinary course of business under guaranties of
Indebtedness of suppliers, licensees, franchisees or customers;
(x) Indebtedness incurred by the Company and its Restricted
Subsidiaries consisting of Purchase Money Obligations and Capital
Lease Obligations not exceeding at any time $30,000,000 in aggregate
outstanding principal amount;
44
50
(xi) Acquired Indebtedness incurred by a Restricted Subsidiary of
the Company to the extent such Indebtedness could have been incurred
by the Company under the limitations set forth in the preceding
paragraph of this Section 4.07, after giving pro forma effect to the
acquisition of such Restricted Subsidiary by the Company;
(xii) Indebtedness of any Restricted Subsidiary existing at the
time of the designation of such Subsidiary as a Restricted Subsidiary
in accordance with the terms of this Indenture if immediately prior to
such designation such Subsidiary was an Unrestricted Subsidiary,
PROVIDED that, after giving pro forma effect to such designation, such
Indebtedness could have been incurred by the Company under the
limitations set forth in the preceding paragraph of this Section 4.07
(assuming for purposes of this clause (xii) only that the Consolidated
Cash Flow Coverage Ratio set forth in such paragraph were 2.25 to
1.0); and PROVIDED FURTHER that, none of the Company or any of its
other Restricted Subsidiaries shall provide credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), or otherwise be at any time, directly or
indirectly liable (as a guarantor or otherwise), for such existing
Indebtedness, except to the extent the Company or any of its
Restricted Subsidiaries could become so liable in accordance with the
provisions of this Section 4.07 (other than solely in accordance with
clause (vi) above or this clause (xii)).
(xiii) Indebtedness of the Company and its Restricted
Subsidiaries in respect of performance bonds, bankers' acceptances,
letters of credit, short-term overdraft facilities and surety or
appeal bonds incurred or provided in the ordinary course of business;
(xiv) Indebtedness of (a) Nortek (UK) Limited and its
Subsidiaries arising out of advances on exports, advances on imports,
advances on trade receivables, factoring of receivables and similar
transactions in the ordinary course of business and, if secured,
secured only by Liens on assets of Nortek (UK) Limited and its
Subsidiaries and (b) the Company under its limited guaranty of not
more than $10,000,000 of any such Indebtedness of Nortek (UK) Limited
and its Subsidiaries;
(xv) other Indebtedness of the Company and its Restricted
Subsidiaries not to exceed at any time $25,000,000 in aggregate
outstanding principal amount;
(xvi) Liens permitted under Section 4.09; and
45
51
(xvii) Indebtedness ("Refinancing Indebtedness") created,
incurred, issued, assumed or guaranteed in exchange for, or the
proceeds of which are used to extend, refinance, renew, replace,
substitute or refund ("refinance"), Indebtedness described in the
preceding paragraph or referred to in clauses (i) through (xv) above;
PROVIDED, HOWEVER, that (a) the principal amount of such Refinancing
Indebtedness (or if such Refinancing Indebtedness is issued at a price
less than the principal amount thereof, the original issue amount of
such Refinancing Indebtedness), together with the principal amount of
any remaining Indebtedness under the agreement or instrument governing
the Indebtedness being refinanced, (1) in the case of Refinancing
Indebtedness incurred to refinance Indebtedness permitted to be
incurred under any of clauses (iii) through (v) and (xv) above, shall
not, when added to all other Indebtedness outstanding under such
clause, exceed the aggregate amount of Indebtedness permitted to be
incurred under such clause, and (2) in the case of Refinancing
Indebtedness incurred to refinance Indebtedness permitted to be
incurred under any of clauses (i), (ii) and (vi) through (xiv) above,
shall not exceed the aggregate amount of such Indebtedness outstanding
at the time of such refinancing, in each case, after giving effect to
any mandatory reductions in principal or other repayments required
under the agreement or instrument governing such Indebtedness; (b)
such Refinancing Indebtedness shall be subordinated in right of
payment to the Notes or the Subsidiary Guaranties at least to the same
extent as the Indebtedness to be refinanced; (c) such Refinancing
Indebtedness shall have an Average Life and Stated Maturity equal to,
or greater than, the Average Life and Stated Maturity of the
Indebtedness to be refinanced at the time of such incurrence; (d) the
proceeds of such Refinancing Indebtedness, if incurred by a Restricted
Subsidiary of the Company, shall not be used to refinance Indebtedness
of the Company or another Subsidiary of the Company; and (e) the
incurrence of any such Refinancing Indebtedness is substantially
simultaneous with the refinancing of the Indebtedness to be
refinanced.
For purposes of this Section 4.07, the accretion of original issue discount
on Indebtedness shall not be deemed to be an incurrence of Indebtedness.
The Company will not, directly or indirectly, incur any Indebtedness that
is expressly subordinated to any other Indebtedness of the Company or any
Restricted Subsidiary unless such Indebtedness is also expressly subordinated to
the Notes (and any Subsidiary Guaranty, as applicable) to the same extent and in
the same manner as such Indebtedness is subordinated to such other Indebtedness
of the Company or such Restricted Subsidiary.
SECTION 4.08 LIMITATION ON SALE OR ISSUANCE OF PREFERRED STOCK OF
RESTRICTED SUBSIDIARIES. The Company shall not (i) permit any of its Restricted
Subsidiaries to issue or sell
46
52
to any Person except the Company or a Wholly-Owned Subsidiary of the Company
that is a Restricted Subsidiary any preferred stock of any Restricted
Subsidiary, or (ii) sell or otherwise convey or dispose of, or permit any of its
Wholly-Owned Subsidiaries that is a Restricted Subsidiary to sell or otherwise
convey or dispose of, any such preferred stock so issued or sold to the Company
or any of its Wholly-Owned Subsidiaries that is a Restricted Subsidiary (other
than to the issuer of such preferred stock, the Company or another Wholly-Owned
Subsidiary of the Company that is a Restricted Subsidiary).
SECTION 4.09 LIMITATION ON LIENS. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, create, incur,
assume or suffer to exist any Lien on any Principal Property or on any shares of
Capital Stock of any Restricted Subsidiary of the Company held by the Company or
any other Restricted Subsidiary of the Company or on any Indebtedness owed by
any Restricted Subsidiary to the Company or any other Restricted Subsidiary of
the Company.
The foregoing limitation does not apply to:
(i) Liens securing obligations under the Notes;
(ii) Liens securing obligations under the Company Credit Facility
or the Ply Gem Credit Facility (but such Liens shall not secure
Indebtedness in excess of the amount of Indebtedness then permitted to
be incurred under clause (iii) of the second paragraph of Section 4.07
plus the amount of any Indebtedness then outstanding pursuant to such
clause (iii));
(iii) other Liens existing on the Closing Date;
(iv) Liens with respect to the assets of a Restricted Subsidiary
granted by such Restricted Subsidiary to the Company or a Restricted
Subsidiary that is a Wholly-Owned Subsidiary of the Company to secure
Indebtedness owing to the Company or such Wholly-Owned Subsidiary by
such Restricted Subsidiary;
(v) Liens permitted by clauses (iv), (v), (x) and (xiv) of
Section 4.07;
(vi) Liens in respect of Indebtedness permitted by clause (xiii)
of Section 4.07;
(vii) Liens granted in connection with the extension, renewal or
refinancing, in whole or in part, of any Indebtedness under the Notes
or described in clause (iii) above; provided that (1) such new
Indebtedness is permitted to be incurred under Section 4.07 and (2)
the amount of
47
53
Indebtedness secured by such Lien is not increased thereby; and
PROVIDED, FURTHER, that the extension, renewal or refinancing of
Indebtedness of the Company may not be secured by Liens on assets of
any Restricted Subsidiary other than to the extent the Indebtedness
being extended, renewed or refinanced was at any time previously
secured by Liens on assets of such Restricted Subsidiary; and
(viii) Permitted Liens.
SECTION 4.10 LIMITATION ON CERTAIN RESTRICTIONS AFFECTING SUBSIDIARIES. The
Company shall not, and shall not permit any of its Restricted Subsidiaries to,
directly or indirectly, create or enter into or otherwise cause or permit to
exist or become effective any agreement with any Person that would cause any
consensual encumbrance or restriction on the ability of any such Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or any other interest or participation in, or measured by, its profits,
owned by the Company or any of its Restricted Subsidiaries, (ii) pay or repay
any Indebtedness owed to the Company or any of its Restricted Subsidiaries which
owns Equity Interests in such Restricted Subsidiary, (iii) make loans or
advances to the Company or any of its Restricted Subsidiaries which owns Equity
Interests in such Restricted Subsidiary, (iv) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries which owns Equity
Interests in such Restricted Subsidiary or (v) guarantee any Indebtedness of the
Company or any other Restricted Subsidiary of the Company except, in each case,
for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) the Indenture, (c) customary nonassignment provisions of any
lease governing a leasehold interest of the Company or any of its Restricted
Subsidiaries, (d) any instrument governing Indebtedness of a Person acquired by
the Company or any of its Restricted Subsidiaries at the time of such
acquisition, which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person so acquired,
(e) agreements existing as of the issue date of the Notes, (f) the Company
Credit Facility, (g) the Ply Gem Credit Facility, (h) the Broan Limited Credit
Facility, (i) any other agreement pursuant to which any Restricted Subsidiary of
the Company incurs Indebtedness in accordance with Section 4.07 and (j) any
agreement effecting a refinancing of Indebtedness issued pursuant to any
agreement or instrument referred to in clause (d), (e), (f), (g), (h) or (i)
above, PROVIDED that the terms and conditions of any such encumbrances and
restrictions are not materially less favorable to the Holders than those under
the agreement or instrument evidencing the Indebtedness being refinanced.
The foregoing shall not restrict the ability of any Restricted Subsidiary
of the Company to grant any Lien to the extent otherwise permitted in this
Indenture.
SECTION 4.11 REPURCHASE UPON CHANGE OF CONTROL. Upon the occurrence of a
Change of Control, each Holder will have the right to require the repurchase of
all or any part of such Holder's Notes pursuant to the offer described below
(the "Change of Control Offer") at a purchase price equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid
48
54
interest and Liquidated Damages, if any, to the date of purchase (the "Change of
Control Payment").
Immediately following any Change of Control, the Company is required to
mail a notice to the Trustee and to each Holder stating: (i) that the Change of
Control Offer is being made pursuant to this Section 4.11 of this Indenture and
that all Notes tendered will be accepted for payment; (ii) the amount of the
Change of Control Payment and the purchase date (the "Change of Control Payment
Date"), which may not be earlier than 30 days nor later than 60 days from the
date such notice is mailed; (iii) that any Note not tendered will continue to
accrue interest; (iv) that, unless the Company defaults in the payment thereof,
all Notes accepted for payment pursuant to the Change of Control Offer will
cease to accrue interest on and after the Change of Control Payment Date; (v)
that Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes to be purchased to the
Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Change of Control Payment Date;
(vi) that Holders will be entitled to withdraw Notes they have tendered on the
terms and conditions set forth in such notice; and (vii) that Holders whose
Notes are being purchased only in part will be issued new Notes (or book-entry
notation made with respect thereto) equal in principal amount to the unpurchased
portion of the Notes tendered; provided that the portion of each Note purchased
and each such new Note issued (or book-entry notation, if applicable) shall be
in a principal amount of $1,000 or an integral multiple thereof.
On the Change of Control Payment Date, the Company will, to the extent
lawful: (i) accept for payment all Notes or portions thereof tendered pursuant
to the Change of Control Offer and not withdrawn; (ii) deposit with the Paying
Agent an amount sufficient to pay the Change of Control Payment in respect of
all Notes or portions thereof so tendered and not withdrawn; and (iii) deliver
or cause to be delivered to the Trustee all Notes so tendered and not withdrawn
together with an Officers' Certificate specifying the Notes or portions thereof
tendered to the Company. The Paying Agent will promptly mail to each Holder of
Notes so tendered and not withdrawn the Change of Control Payment in respect of
such Notes, and the Trustee will promptly authenticate and mail to such Holder a
new Note (or cause to be transferred by book entry) equal in principal amount to
any unpurchased portion of the Notes surrendered; provided that each such new
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
The Company will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
A "Change of Control" will be deemed to have occurred at such time as any
of the following events occur:
(i) there is consummated any consolidation or merger of the
Company with or into another corporation, or all or substantially
all of the assets of the Company are sold, leased or otherwise
transferred or conveyed to another Person (other than pursuant to
a bona fide pledge of assets to secure Indebtedness made in
accordance with this Indenture), and
49
55
the holders of the Company's common stock outstanding immediately
prior to such consolidation, merger, sale, lease or other
transfer or conveyance or one or more Exempt Persons do not hold,
directly or indirectly, at least a majority of the common stock
of the continuing or surviving corporation immediately after such
consolidation or merger or at least a majority of the Equity
Interests of such Person;
(ii) there is filed a report on Schedule 13D or 14D-1 (or
any successor schedule, form or report) pursuant to the Exchange
Act disclosing that any person (defined, solely for the purposes
of the Change of Control provision, as the term "person" is used
in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or
any successor provision to either of the foregoing) has become
the beneficial owner (as the term "beneficial owner" is defined
under Rule 13d-3 or any successor rule or regulation promulgated
under the Exchange Act) of 50% or more of the combined voting
power of all the Company's then outstanding securities entitled
to vote generally for the election of directors; PROVIDED,
HOWEVER, that a person shall not be deemed to be the beneficial
owner of, or to own beneficially, (A) any securities tendered
pursuant to a tender or exchange offer made by or on behalf of
such person or any of such person's Affiliates or associates
until such tendered securities are accepted for purchase or
exchange thereunder, or (B) any securities if such beneficial
ownership (1) arises solely as a result of a revocable proxy
delivered in response to a proxy or consent solicitation made
pursuant to the applicable rules and regulations under the
Exchange Act, and (2) is not also then reportable on Schedule 13D
(or any successor schedule) under the Exchange Act; 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 66 2/3% of the directors then still in office who were
either directors at the beginning of such period or whose
election 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.
Notwithstanding the foregoing, a Change of Control shall not be deemed to
have occurred under clause (ii) of the immediately preceding paragraph solely by
virtue of the Company, any Subsidiary of the Company, any employee stock
ownership plan or any other employee benefit plan of the Company or any such
Subsidiary, any other Person holding securities of the Company for or pursuant
to the terms of any such employee benefit plan, or any Exempt Person, filing or
50
56
becoming obligated to file a report on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form or report) under the Exchange Act disclosing beneficial
ownership by it of securities of the Company, whether equal to or greater than
50% of the combined voting power of the Company's then outstanding securities
entitled to vote generally for the election of directors or otherwise.
SECTION 4.12 LIMITATION ON USE OF PROCEEDS FROM ASSET SALES . The Company
shall not, and shall not permit any of its Restricted Subsidiaries to, directly
or indirectly, consummate any Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
any such Asset Sale having a value (including the Fair Market Value of any
non-cash consideration) at least equal to the Fair Market Value of the
securities or assets being sold or otherwise disposed of, and (ii) at least 75%
of the consideration from such Asset Sale is received in the form of cash, Cash
Equivalents (together with cash, "Cash Proceeds") or indebtedness for borrowed
money of the Company or such Restricted Subsidiary that is assumed by the
transferee of any such assets or any such indebtedness of any Restricted
Subsidiary of the Company whose stock is purchased by the transferee. Any Net
Cash Proceeds (a) in excess of the amount of cash applied by the Company or any
Restricted Subsidiary of the Company during the period beginning 12 months prior
to the date of the Asset Sale (but not prior to the issue date of the Notes) and
ending 12 months after the date of such Asset Sale to purchase any business that
is, or any properties and assets used primarily in, the same or a related
business as those owned and operated by the Company and its Subsidiaries as of
the issue date of the Notes or at the date of such Asset Sale and (b) not
applied within 12 months after the date of the Asset Sale to reduce Indebtedness
of the Company (other than Indebtedness which is subordinated by its terms to
the Notes) or any Restricted Subsidiary shall be deemed to be "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $15,000,000, the Company
shall make an offer (the "Excess Proceeds Offer") to apply the Excess Proceeds
to purchase the Notes. The Excess Proceeds Offer must be in cash in an amount
equal to 100% of the principal amount plus accrued and unpaid interest, if any,
thereon and Liquidated Damages, if any, to the date fixed for the closing of
such offer, substantially in accordance with the procedures for a Change of
Control Offer described in Section 4.11. To the extent that the aggregate amount
of Notes tendered pursuant to the Excess Proceeds Offer is less than the Excess
Proceeds, the Company may use the remaining Excess Proceeds for general
corporate purposes and such amounts shall no longer be deemed Excess Proceeds.
If the aggregate principal amount of Notes surrendered by Holders exceeds the
amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on
a pro rata basis, subject to the limitation on the authorized denominations of
the Notes.
SECTION 4.13 LIMITATION ON TRANSACTIONS WITH AFFILIATES . Except as
otherwise permitted by this Indenture, neither the Company nor any of its
Restricted Subsidiaries shall make any Investment, loan, advance, guaranty or
capital contribution to, or for the benefit of, or sell, lease or otherwise
transfer or dispose of any of its 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, any Affiliate
of the Company or any of its Restricted Subsidiaries, unless (i) such
transaction or series of transactions is in the best interests of the
51
57
Company or such Restricted Subsidiary based on all relevant facts and
circumstances; (ii) such transaction or series of transactions is fair to the
Company or such Restricted Subsidiary and on terms that are no less favorable to
the Company or such Restricted Subsidiary, as the case may be, than those that
could have been obtained in a comparable transaction on an arms' length basis
from a Person that is not an Affiliate of the Company or any of its Restricted
Subsidiaries; and (iii) (a) with respect to a transaction or series of related
transactions involving aggregate payments in excess of $2,500,000, the Board of
Directors and a majority of the Disinterested Directors shall approve such
transaction or series of transactions by a Board Resolution evidencing their
determination that such transaction or series of transactions complies with
clauses (i) and (ii) above, and (b) with respect to a transaction or series of
transactions involving aggregate payments equal to or greater than $10,000,000,
the Company receives a written opinion from a nationally recognized investment
bank or valuation firm or, with respect to a transaction requiring the valuation
of real property, a nationally recognized real estate appraisal firm, that such
transaction or series of transactions is fair to the Company from a financial
point of view.
The foregoing limitation shall not apply to: (i) any payment of money or
issuance of securities by the Company or any Restricted Subsidiary of the
Company pursuant to employment agreements or arrangements and employee benefit
plans, including reimbursement or advancement of out-of-pocket expenses and
directors' and officers' liability insurance; (ii) reasonable and customary
payments and other benefits (including indemnification) PROVIDED to directors
for service on the Board of Directors of the Company or any of its Restricted
Subsidiaries and reimbursement of expenses related thereto; or (iii)
transactions between the Company and any Restricted Subsidiary of the Company,
or between one Restricted Subsidiary of the Company and another Restricted
Subsidiary of the Company, PROVIDED that not more than 20% of such Restricted
Subsidiary is owned by any Affiliate of the Company or any of its Restricted
Subsidiaries (other than the Company or a Wholly-Owned Subsidiary of the
Company).
SECTION 4.14 LIMITATION ON GUARANTIES BY SUBSIDIARIES. The Company shall
not permit any Restricted Subsidiary of the Company, directly or indirectly, to
assume, guarantee or in any other manner become liable with respect to any
Indebtedness of the Company (excluding for this purpose, any Indebtedness deemed
to arise from a guarantee by the Company of Indebtedness of any Restricted
Subsidiary of the Company) or any Subsidiary Guarantor (other than the Notes),
unless (a) such liability is in respect of the Company Credit Facility or the
Ply Gem Credit Facility or (b) such Restricted Subsidiary is a Subsidiary
Guarantor or simultaneously executes and delivers (i) to the Company and the
Trustee a supplemental indenture to this Indenture providing for a Subsidiary
Guaranty of the Notes by such Restricted Subsidiary and any other Subsidiary
Guarantors by adding an Article 11 to this Indenture, in the form of Exhibit E
hereto and (ii) to the Trustee a Subsidiary Guaranty substantially in the form
of Exhibit F hereto.
No Lien on the properties or assets of any Restricted Subsidiary of the
Company permitted by Section 4.09 shall constitute a guaranty of the payment of
any Indebtedness of the Company for purposes of this Section 4.14.
52
58
The provisions of this Section 4.14 and any supplemental indenture referred
to in this Section 4.14 shall cease to have further force and effect (and if
there then exists any Subsidiary Guarantor, such Subsidiary Guarantor will be
deemed to be released from all obligations under its Subsidiary Guaranty) at
such time as Section 4.15 in the indenture governing the Company's 9 7/8% Notes
and Section 4.14 in the indenture governing the Company's 9 1/4% Notes shall
cease to have further force and effect (whether by reason of amendment,
redemption or repayment of such Indebtedness or otherwise), PROVIDED, HOWEVER,
that if the instrument or other agreement governing any Indebtedness incurred to
refinance the 9 7/8% Notes or the 9 1/4% Notes includes such a covenant similar
to Section 4.15 of the indenture governing the 9 7/8% Notes or Section 4.14 in
the indenture governing the 9 1/4% Notes, the provisions of this Section 4.14
and any supplemental indenture referred to in this Section 4.14 shall continue
in full force and effect for so long as such similar covenant remains in force
and effect.
SECTION 4.15 PAYMENT OF TAXES AND OTHER CLAIMS. The Company shall pay or
discharge or cause to be paid or discharged, before any penalty accrues thereon,
(i) all material taxes, assessments and governmental charges levied or imposed
upon the Company or any of its Subsidiaries upon the income, profits or property
of the Company or any of its Subsidiaries and (ii) all material lawful claims
for labor, materials and supplies which, if unpaid, would by law become a Lien
upon the property of the Company or any of its Subsidiaries; provided that none
of the Company or any of its Subsidiaries shall be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claims the
amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate provision has been made or where
the failure to effect such payment or discharge is not adverse in any material
respect to the Holders.
SECTION 4.16 CORPORATE EXISTENCE. Subject to Article 5 hereof, the Company
will 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 any of its Subsidiaries in accordance with the respective
organizational documents of such Subsidiary and the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
PROVIDED, HOWEVER, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any such Subsidiary, if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries taken as a whole and that the loss
thereof is not adverse in any material respect to the Holders.
SECTION 4.17 MAINTENANCE OF PROPERTIES AND INSURANCE. The Company shall
cause all material properties owned by or leased to it or any of its
Subsidiaries and used or useful in the conduct of its business or the business
of such Subsidiary to be maintained and kept in normal condition, repair and
working order and supplied with all necessary equipment and shall cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided,
53
59
however, that nothing in this Section 4.17 shall prevent the Company or any of
its Subsidiaries from discontinuing the maintenance of any such properties, if
such discontinuance is desirable in the conduct of its business or the business
of such Subsidiary
The Company shall provide or cause to be provided, for itself and any of
its Subsidiaries, insurance (including appropriate self-insurance) against loss
or damage of the kinds customarily insured against by corporations similarly
situated and owning like properties, including, but not limited to, public
liability insurance, with reputable insurers in such amounts with such
deductibles and by such methods as shall be customary for corporations similarly
situated in the industry.
SECTION 4.18 STAY, EXTENSION AND USURY LAWS. The Company covenants (to the
extent 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,
which may 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 resort to
any such law that would hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law has been enacted.
SECTION 4.19 INVESTMENT COMPANY ACT. The Company shall not become an
investment company subject to registration under the Investment Company Act of
1940, as amended.
SECTION 4.20 PAYMENTS FOR CONSENTS. The Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, pay or cause to be
paid any consideration whether by way of interest, fee or otherwise, to any
Holder of any Notes for or as an inducement to any consent, waiver or amendment
of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid or agreed to be paid to all Holders of the
Notes which so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
SECTION 4.21 COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF
NOTES. In connection with any offer to purchase or purchase of Notes under
Section 4.11 or 4.12 hereof, the Company shall (i) comply with Rule 14e-1 under
the Exchange Act, and (ii) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under Sections 4.11
and 4.12 hereof to be exercised in the time and in the manner specified in
Sections 4.11 and 4.12 hereof.
54
60
ARTICLE 5
SUCCESSOR CORPORATION
---------------------
SECTION 5.01 WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS, ETC.
(a) The Company shall not consolidate with, merge with or into, or
transfer all or substantially all of its assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into it,
or permit any of its Subsidiaries to enter into any such transaction or
transactions if such transaction or transactions in the aggregate would
result in a transfer of all or substantially all of the assets of the
Company and its Subsidiaries on a consolidated basis, unless:
(1) the Company shall be the continuing Person, or the Person, if
other than the Company, formed by such consolidation or into which the
Company is merged or to which the properties and assets of the Company or
of the Company and its Subsidiaries on a consolidated basis, substantially
as an entirety, are transferred shall be a corporation organized and
existing under the laws of the United States or any state thereof or the
District of Columbia and shall expressly assume, by an indenture
supplemental to this Indenture, executed and delivered to the Trustee, in
form satisfactory to the Trustee, all the obligations of the Company under
the Notes and this Indenture, and this Indenture remains in full force and
effect;
(2) immediately before and immediately after giving effect to such
transaction, no Event of Default and no Default shall have occurred and be
continuing;
(3) the Person which is formed by or survives such consolidation or
merger or to which such assets are transferred (the "surviving entity"),
after giving pro forma effect to such transaction, could incur $1.00 of
additional Indebtedness under the first paragraph of Section 4.07 hereof;
(4) immediately after giving effect to such transaction on a pro forma
basis the Consolidated Net Worth of the surviving entity shall be equal to
or greater than the Consolidated Net Worth of the Company immediately
before such transaction; and
(5) each Subsidiary Guarantor, if any, unless it is the other party to
the applicable transaction described above or its Subsidiary Guaranty,
after giving effect to such transaction, is to be released in accordance
with the terms hereof and of such Subsidiary Guaranty, shall have confirmed
by supplemental indenture that its Subsidiary Guaranty shall apply to the
obligations of the Company or the surviving entity under this Indenture.
In connection with any such consolidation, merger or transfer, the Company
shall deliver, or cause to be delivered, to the Trustee, in form and substance
reasonably satisfactory to the
55
61
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this Section 5.01(a) and that all conditions precedent
provided for relating to such transactions have been complied with.
(b) A Subsidiary Guarantor shall not, and the Company shall not permit
a Subsidiary Guarantor to, consolidate with, or merge with or into, any
Person unless its Subsidiary Guaranty, after giving effect to such merger
or consolidation, is to be released in accordance with the terms hereof and
of such Subsidiary Guaranty or:
(1) such Subsidiary Guarantor or the Company shall be the
continuing person or the resulting or surviving person in such
transaction ("the surviving entity") or the surviving entity shall be
a corporation organized and existing under the laws of the United
States or any state thereof or the District of Columbia and shall
expressly assume, by a supplemental indenture executed and delivered
to the Trustee, in form and substance reasonably satisfactory to the
Trustee, all of the obligations of such Subsidiary Guarantor under
this Indenture, as modified by such supplemental indenture, and its
Subsidiary Guaranty; and
(2) immediately before and immediately after giving effect to
such merger or consolidation, no Event of Default and no Default shall
have occurred and be continuing.
In connection with any such consolidation or merger, the Company
shall deliver, or caused to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation or merger, and if a supplemental indenture is required
in connection with such transaction, such supplemental indenture
comply with this Section 5.01(b) and that all conditions precedent
provided for in this Indenture relating to such transaction have been
complied with.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED. Upon any consolidation or
merger, or any transfer of all or substantially all of the assets of the Company
and its Subsidiaries on a consolidated basis, in accordance with Section 5.01
hereof, the successor Person formed by such consolidation or into which the
Company or any Subsidiary Guarantor, as the case may be, is merged or the
successor Person to which such transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company or such
Subsidiary Guarantor, as the case may be, under this Indenture and, in the case
of such Subsidiary Guarantor, under such Subsidiary Guaranty, with the same
effect as if such successor Person had been named as the Company in this
Indenture or as such Subsidiary Guarantor in this Indenture and such Subsidiary
Guaranty, as the case may be, and when a successor Person assumes all the
obligations of its predecessor under this Indenture, the Notes or a Subsidiary
Guaranty, the predecessor shall be released from those obligations; provided,
however, that in the case of a transfer by lease, the
56
62
predecessor shall not be released from the payment of principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes.
ARTICLE 6
DEFAULTS AND REMEDIES
---------------------
SECTION 6.01 EVENTS OF DEFAULT. An "Event of Default" occurs if one of the
following shall have occurred and be continuing:
(1) the Company defaults in the payment, when due and payable, of (i)
interest on or Liquidated Damages, if any, with respect to any Note and the
default continues for a period of 30 days, or (ii) principal of or premium,
if any, on any Notes when the same becomes due and payable at maturity, by
acceleration, on the Redemption Date, on the Change of Control Payment
Date, on any payment date respecting an Excess Proceeds Offer or otherwise;
(2) the Company fails to comply with any of its covenants or
agreements under Article 5 hereof.
(3) the Company fails to comply with any of its covenants or
agreements in the Notes or this Indenture (other than those referred to in
clause (1) or (2) above), or any Subsidiary Guarantor fails to comply with
any of its covenants or agreements in this Indenture or its Subsidiary
Guaranty, and in either case such failure continues for the period and
after receipt by the Company of the notice specified below;
(4) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), whether such indebtedness or guaranty is
now existing or hereafter created, if such default shall constitute a
failure to pay any portion of the principal of such indebtedness when due
and payable or if as a result of such default the maturity of such
indebtedness has been accelerated prior to its stated maturity and, in
either case, the principal amount of such indebtedness, together with the
principal amount of any other such indebtedness for money borrowed which
has not been paid when due and payable or the maturity of which has been
accelerated as a result of such default, aggregates $15,000,000 or more;
(5) the Company or any of its Significant Subsidiaries that is a
Restricted Subsidiary (or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary) pursuant to or within
the meaning of any Bankruptcy Law:
(a) commences a voluntary case or proceeding;
57
63
(b) consents to the entry of an order for relief against it in an
involuntary case or proceeding;
(c) consents to the appointment of a Custodian of it or for all
or substantially all of its property;
(d) makes a general assignment for the benefit of its creditors;
or
(e) admits in writing its inability to pay its debts generally as
they become due;
(6) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(a) is for relief against the Company or any of its Significant
Subsidiaries that is a Restricted Subsidiary (or any group of
Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary) in an involuntary case or proceeding;
(b) appoints a Custodian of the Company or any of its Significant
Subsidiaries that is a Restricted Subsidiary (or any group of
Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary) for all or substantially all of its
properties;
(c) orders the liquidation of the Company or any of its
Significant Subsidiaries that is a Restricted Subsidiary (or any group
of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary); and
(d) in each case the order or decree remains unstayed and in
effect for 60 days;
(7) final judgments for the payment of money which in the aggregate
exceed $15,000,000 shall be rendered against the Company or any of its
Restricted Subsidiaries by a court and shall remain unstayed or
undischarged for a period of 60 days; or
(8) any Subsidiary Guaranty ceases to be in full force and effect or
is declared null and void, or any Subsidiary Guarantor denies that it has
any further liability under any Subsidiary Guaranty or gives notice to such
effect (in each case other than by reason of the termination of this
Indenture or the release of such Subsidiary Guaranty in accordance with the
terms of this Indenture and such Subsidiary Guaranty) and such condition
shall have continued for the period and after receipt by the Company of the
notice specified below.
"Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar Federal
or state law for the relief of debtors. "Custodian" means any receiver, trustee,
assignee, liquidator, sequestrator, custodian or similar official under any
Bankruptcy Law.
58
64
A Default under clause (3) or (8) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Notes at the time outstanding notify the Company and the
Trustee, of the Default and the Company does not cure such Default within 30
days after receipt of such notice. Any such notice must specify the Default,
demand that it be remedied and state that such notice is a "Notice of Default."
In the case of any Event of Default (other than as a result of the failure
to comply with Section 4.11) 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 which the Company would have to pay if the
Company then had elected to redeem the Notes, an equivalent premium shall also
become and be immediately due and payable to the extent permitted by law,
anything in this Indenture or in the Notes contained to the contrary
notwithstanding.
In the case of an Event of Default as a result of a failure to comply with
Section 4.11 hereof 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 which the Company would have to pay pursuant to
Section 4.11, such premium shall also become and be immediately due and payable
at such time as the principal and interest on the Notes become due and payable
pursuant to Section 6.02 hereof to the extent permitted by law, anything in this
Indenture or in the Notes contained to the contrary notwithstanding.
SECTION 6.02 ACCELERATION. If any Event of Default (other than an Event of
Default specified in clause (5) or (6) of Section 6.01 hereof) occurs and is
continuing, the Trustee may, by Notice to the Company, or the Holders of at
least 25% in aggregate principal amount of the Notes then outstanding, by notice
to the Company and the Trustee, and the Trustee shall, upon the request of such
Holders, declare the unpaid principal, premium, if any, and accrued interest on
and Liquidated Damages, if any, with respect to, the Notes to be due and payable
immediately. If any Event or Default under clause (5) or (6) of Section 6.01
hereof occurs, all unpaid principal, premium, if any, accrued interest on and
Liquidated Damages, if any, with respect to the Notes then outstanding shall
IPSO FACTO become and be immediately due and payable without declaration or
other act on the part of the Trustee or any Holder. The Holders of at least a
majority in aggregate principal amount of the Notes then outstanding by written
notice to the Trustee and to the Company may rescind an acceleration and its
consequences (except an acceleration due to a default in payment of principal
of, premium, if any, and accrued interest on and Liquidated Damages, if any,
with respect to, the Notes) if all existing Events of Default have been cured or
waived except non-payment of principal of, premium, if any, and accrued interest
on and Liquidated Damages, if any, that has become due solely because of the
acceleration.
SECTION 6.03 OTHER REMEDIES. If any Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the payment of principal of, premium, if any, or interest
on the Notes or to enforce the performance of any provision of the Notes or this
Indenture.
59
65
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Notes or does not produce any of the Notes 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. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04 WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in aggregate principal amount of the Notes at the time outstanding, by
notice to the Trustee (and without notice to any other Holder), may waive an
existing Default or Event of Default and its consequences except (i) an Event of
Default described in Section 6.01(1) hereof, or (ii) a Default in respect of a
provision that under Section 9.02 hereof cannot be amended without the consent
of each Holder affected. When a Default or Event of Default is waived, it is
deemed cured and shall cease to exist, but no such wavier shall extend to any
subsequent or other Default or Event of Default or impair any consequent right.
SECTION 6.05 CONTROL BY MAJORITY. The Holders of not less than a majority
in aggregate principal amount of the Notes at the time outstanding may direct,
by an instrument or concurrent instruments in writing delivered to the Trustee,
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or of exercising any trust or power conferred on the Trustee.
However, the Trustee may refuse to follow any direction that conflicts with law
or this Indenture or that the Trustee determines in good faith is unduly
prejudicial to the rights of other Holders or would involve the Trustee in
personal liability. Subject to the provisions of Section 315 of the TIA, the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
SECTION 6.06 LIMITATION ON SUITS. Except as provided in Section 6.07
hereof, a Holder may not pursue any remedy with respect to this Indenture or the
Notes unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in aggregate principal amount of the
Notes at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense satisfactory to the
Trustee;
(4) the Trustee does not comply with the request within 30 days after
receipt of the notice, the request and the offer of security or indemnity;
and
(5) the Holders of a majority in aggregate principal amount of the
Notes at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 30-day period.
60
66
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over any other Holder.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount, premium, if any, or interest, or Liquidated Damages, if
any, in respect of the Notes held by such Holder, on or after the respective due
dates expressed in the Notes, any Redemption Date, any Change in Control Payment
Date or any payment date respecting an Excess Proceeds Offer, or to bring suit
for the enforcement of any such payment on or after such respective dates shall
not be impaired or affected adversely without the consent of each such Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default described
in Section 6.01(1) hereof occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Notes for the whole amount owing with respect to the
Notes and the amounts provided for in Section 7.07 hereof.
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or the property of the Company or to any other obligor on the Notes
or the property of such obligor, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(1) to file and prove a claim for the whole amount of the principal
amount, premium, if any, and interest on the Notes and to file such other
papers or documents and to take other actions, including participating as a
member of any committee of creditors, as it may deem necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding; and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian or other official in any such judicial proceeding is hereby
authorized by each Holder to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof.
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
61
67
or composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 6.10 PRIORITIES. If the Trustee collects any money pursuant to this
Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to Holders for amounts due and unpaid on the Notes for the
principal amount, premium, if any, interest, if any, and Liquidated Damages, if
any, as the case may be, ratably, without preference or priority of any kind,
according to such amounts due and payable on the Notes; and
THIRD: the balance, if any, to the Company or to the Person or Persons
otherwise entitled thereto.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as Trustee, a court in its discretion may require
the filing by any party litigant (other than the Trustee) 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 and expenses,
against any party litigant in the suit, having due regard to the merit and good
faith of the claims or defense made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 hereof or a suit by Holder of more than 10% in aggregate principal amount
of the Notes at the time outstanding.
SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture, any Note or any Subsidiary Guaranty and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Company, each
Subsidiary Guarantor, if any, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
62
68
ARTICLE 7
TRUSTEE
-------
SECTION 7.01 DUTIES OF TRUSTEE.
(1) If an Event of Default has occurred and is continuing (and is not
cured), the Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in its exercise as
a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(2) Except during the continuance of an Event of Default:
(a) the Trustee need perform only those duties that are
specifically set forth in this Indenture and not others and no implied
covenants or obligations shall be read into this Indenture against the
Trustee and the duties of the Trustee shall be determined solely by
the express provisions of this Indenture; and
(b) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, in the case of any such certificate or
opinion which by any provision hereof is specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirement of this Indenture.
The Trustee shall not be liable for any interest on any money received by
it.
(3) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its willful
misconduct, except that:
(a) this paragraph (3) does not limit the effect of paragraph (2)
of this Section 7.01;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by any Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.04 or 6.05 hereof.
63
69
(4) Whether or not expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs
(1), (2), (3), (5) and (7) of this Section 7.01 and Section 7.02.
(5) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives reasonable security or indemnity satisfactory
to it against any loss, liability or expense.
(6) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money held by it
hereunder.
(7) The Trustee shall not be deemed to have knowledge of the existence
of any fact or matter unless such fact or matter is actually known to one
of its Trust Officers.
(8) The Trustee shall not be required to examine any reports or
financial information filed with it by the Company pursuant to Section 4.02
to determine whether the limitations set forth in Sections 4.06 through
4.13 have been exceeded.
SECTION 7.02 RIGHTS OF TRUSTEE.
(1) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need
not investigate any fact or matter stated in any such document but the
Trustee may, in its discretion, make such further inquiry or investigation
into such facts or matters stated in any such document as it sees fit.
(2) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate and an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on such Officers' Certificate and Opinion of Counsel.
(3) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(4) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers.
(5) The Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
64
70
(6) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security and indemnity satisfactory
to it against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction.
SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Company or its Affiliates with the same rights it would have if it
were not Trustee. Any Paying Agent, Registrar or co-registrar may do the same
with like rights. However, the Trustee must comply with Section 7.10 and 7.11
hereof.
SECTION 7.04 TRUSTEE'S DISCLAIMER. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes, and it shall
not be responsible for any statement in the registration statement for the Notes
under the Securities Act of 1933, as amended (the "Securities Act") (other than
statements contained in the Form T-1 filed with the SEC under the TIA) or in
this Indenture or the Notes (other than its certificate of authentication), or
the determination as to which beneficial owners are entitled to receive any
notices hereunder.
SECTION 7.05 NOTICE OF DEFAULTS. If a Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to each Holder as their
names and addresses appear on the Note Register, notice of the Default within 90
days after it becomes known to the Trustee unless such Default shall have been
cured or waived. Except in the case of a Default described in Section 6.01(1)
hereof, the Trustee may withhold such notice if and so long as a committee of
Trust Officers in good faith determines that the withholding of such notice is
in the interests of Holders.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each May
15th beginning with May 15, 1997, the Trustee shall mail to each Holder a brief
report dated as of such May 15th in accordance with and to the extent required
under Section 313 of the TIA.
A copy of each report at the time of its mailing to Holders shall be filed
with the Company, the SEC and each stock exchange on which the Notes are listed.
The Company agrees to promptly notify the Trustee whenever the Notes become
listed on any stock exchange and of any delisting thereof.
SECTION 7.07 COMPENSATION AND INDEMNITY. The Company agrees:
(1) To pay to the Trustee from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
65
71
(2) To reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, disbursements and advances of its agents and
counsel and other persons not regularly in its employ), including all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in connection with any membership on any creditor's committee,
except any such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) To indemnify the Trustee, its officers, directors and
shareholders, for, and to hold it harmless against, any and all loss,
liability or expense, incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder.
The Trustee shall have a claim and lien prior to the Notes as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 7.07, except with respect to funds
held in trust for the payment of principal of, premium, if any, or interest on
particular Notes.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee renders services or
incurs expenses after the occurrence of a Default specified in Section 6.01(5)
or (6) hereof, the compensation for services and expenses are intended to
constitute expenses of administration under any Bankruptcy Law, provided that,
if not paid as such expenses, such compensation and expenses shall remain
payable as provided under Section 6.10.
SECTION 7.08 REPLACEMENT OF TRUSTEE. The Trustee may resign by so notifying
the Company in writing at least 30 days prior to the date of the proposed
resignation; PROVIDED, HOWEVER, no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this Section 7.08.
The Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may remove the Trustee by so notifying the Trustee in writing and
may appoint a successor Trustee subject to the consent of the Company. The
Trustee shall resign if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
66
72
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by a Board
Resolution, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Holders. Subject to
payment of all amounts owing to the Trustee under Section 7.07 hereof and
subject further to its lien under Section 7.07, the retiring Trustee shall
promptly transfer all property held by it as Trustee to successor Trustee.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Notes at the time
outstanding may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets (including this Trusteeship) to, another corporation,
the resulting, surviving or transferee corporation without any further act shall
be the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION. The Trustee shall at all times
satisfy the requirements of TIA Section 310(a)(1) and (5). The Trustee shall
have a combined capital and surplus of at least $50,000,000 as set forth in its
most recently published annual report of condition. The Trustee shall comply
with TIA Section 310(b). In determining whether the Trustee has conflicting
interests as defined in TIA Section 310(b)(1), the provisions contained in the
proviso to TIA Section 310(b)(1) shall be deemed incorporated herein.
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor under the Notes), the Trustee shall be subject to the provisions of the
TIA regarding the collection of claims against the Company (or any such other
obligor).
67
73
ARTICLE 8
DISCHARGE OF INDENTURE
----------------------
SECTION 8.01 DISCHARGE OF LIABILITY ON NOTES. When (i) the Company delivers
to the Trustee all outstanding Notes (other than Notes replaced pursuant to
Section 2.07 hereof or Notes which are purchased pursuant to Section 4.11 or
4.12 hereof or Notes for whose payment money has theretofore been held in trust
and thereafter repaid to the Company, as provided in Section 8.02 hereof) for
cancellation or (ii) the Company irrevocably deposits with the Trustee money
and/or direct non-callable obligations of, or non-callable obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligation the full faith and credit of the United States is pledged ("U.S.
Government Obligations"), maturing as to principal and interest in such amounts
and at such times as are sufficient, without consideration of any reinvestment
of such interest, to pay principal of, premium, if any, interest on, or
Liquidated Damages with respect to the outstanding Notes (other than Notes
replaced pursuant to Section 2.07 hereof) to maturity or redemption, as the case
may be, in accordance with the terms of this Indenture and the Notes issued
hereunder, and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Sections 2.06
and 7.07 hereof, and each Subsidiary Guaranty, if any, shall except as to the
obligations of the Subsidiary Guarantor thereunder in respect of such Sections,
cease to be of further effect. The Trustee shall join in the execution of any
documents prepared by the Company acknowledging satisfaction and discharge of
this Indenture and each such Subsidiary Guaranty on written demand of the
Company accompanied by an Officers' Certificate and Opinion of Counsel and at
the cost and expense of the Company. In the case of any such deposit pursuant to
clause (ii) above, the obligation to pay the principal of and any interest on
such Notes and the obligations under Section 7.07 hereof shall continue until
the Notes are paid in full (provided that the provisions of Section 7.07 hereof
shall survive the payment of the Notes and discharge of the Indenture). The
Company will be entitled to make such a deposit if the Company has delivered to
the Trustee (i)(A) a ruling directed to the Trustee from the Internal Revenue
Service to the effect that the holders of the Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such deposit and
defeasance of this Indenture and will be subject to federal income tax on the
same amount and in the same manner and at the same times, as would have been the
case if such deposit and defeasance had not occurred, or (B) an opinion of
counsel, reasonably satisfactory to the Trustee, to the same effect as clause
(i)(A) above, (ii) an Opinion of Counsel (who may be an employee of or counsel
for the Company), and an Officers' Certificate in accordance with this Indenture
and (iii) a report from a nationally recognized firm of independent public
accountants stating that the amount of such deposit is sufficient to pay and
discharge the amounts described in clause (ii) above with respect to the Notes.
If the Trustee or Paying Agent is unable to apply any money in accordance
with this Section 8.01 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the obligations of the Company and each Subsidiary Guarantor
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to this Section 8.01 until such time as the
68
74
Trustee or Paying Agent is permitted to apply all such money in accordance with
this Section 8.01; PROVIDED, HOWEVER, that if the Company or any Subsidiary
Guarantor, as the case may be, makes any payment of interest on or principal of
any Note following the reinstatement of its obligations, the Company or any
Subsidiary Guarantor, as the case may be, shall be subrogated to the right of
the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
SECTION 8.02 REPAYMENT TO THE COMPANY OR SUBSIDIARY GUARANTORS. Subject to
Section 7.07 hereof, the Trustee and the Paying Agent shall promptly pay to the
Company, or if deposited with the Trustee by any Subsidiary Guarantor, to such
Subsidiary Guarantor, upon written request, set forth in an Officer's
Certificate accompanied by an Opinion of Counsel, any excess money or U.S.
Government Obligations held by them at any time. The Trustee and the Paying
Agent shall adhere to applicable law and appropriate regulations in the
disposition of any unclaimed funds. After return to the Company or any
Subsidiary Guarantor, 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.
ARTICLE 9
AMENDMENTS
----------
SECTION 9.01 WITHOUT CONSENT OF HOLDERS. From time to time, when authorized
by Board Resolutions of each of them, the Company and the Trustee, without
notice to or the consent of the Holders of the Notes issued hereunder, may amend
or supplement this Indenture or the Notes as follows:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article 5 hereof;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes so long as such uncertificated Notes are in registered
form for purposes of the Internal Revenue Code of 1986, as amended;
(4) to make any other change that does not adversely affect the rights
of any Holder;
(5) to comply with any requirement of the SEC in connection with the
qualification of this Indenture under the TIA; or
(6) to add any Subsidiary of the Company as a Subsidiary Guarantor.
69
75
SECTION 9.02 WITH CONSENT OF HOLDERS. With the consent of the Holders of at
least a majority in aggregate principal amount of the Notes at the time
outstanding, the Company and the Trustee may amend this Indenture or the Notes
or may waive future compliance by the Company or any Subsidiary Guarantor with
any provisions of this Indenture, the Notes or such Subsidiary Guarantor's
Subsidiary Guaranty. However, without the consent of each Holder affected, a
waiver or an amendment to this Indenture or the Notes may not:
(1) reduce the percentage of principal amount of the Notes whose
Holders must consent to an amendment or waiver; or
(2) make any change to the Stated Maturity of the principal of,
premium, if any, or any interest on or Liquidated Damages, if any, with
respect to, the Notes or any Redemption Price thereof, or impair the right
to institute suit for the enforcement of any such payment or make any Note
payable in money or securities other than that stated in the Note; or
(3) waive a default in the payment of the principal of, premium, if
any, interest on, or Liquidated Damages with respect to any Note;
(4) release any Subsidiary Guarantor from any of its obligations under
its Subsidiary Guaranty or the Indenture other than in compliance with the
terms of the Indenture and such Subsidiary Guaranty; or
(5) make any change in the provisions of Sections 4.11, 4.12, 6.04 or
6.07 hereof;
or
(6) make any change to Section 9.01 or 9.02 hereof.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
In the event that certain Holders are willing to defer or waive certain
obligations of the Company hereunder with respect to Notes held by them, such
deferral or waiver shall not be deemed to affect any other Holder who receives
the subject payment or performance in a timely manner.
After an amendment or waiver under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment 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
amendment or waiver.
70
76
SECTION 9.03 COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article 9 shall comply with the TIA.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS. Until
an amendment, waiver or other action by Holders becomes effective, a consent to
it or any other action by a Holder of a Note hereunder is a continuing consent
by the Holder and every subsequent Holder of that Note or portion of the Note
that evidences the same obligation as the consenting Holder's Note, even if
notation of the consent, waiver or action is not made on the Note. However, any
such Holder or subsequent Holder may revoke the consent, waiver or action as to
such Holder's Note or portion of the Note if the Trustee receives the notice of
revocation before the consent of the requisite aggregate principal amount of the
Notes then outstanding has been obtained and not revoked. After an amendment,
waiver or action becomes effective, it shall bind every Holder, except as
provided in Section 9.02 hereof.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment or
waiver. If a record date is fixed, then, notwithstanding the first two sentences
of the immediately preceding paragraph, those Persons who were Holders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment, supplement or waiver or to revoke any
consent previously given, whether or not such Persons continue to be Holders
after such record date. No such consent shall be valid or effective for more
than 90 days after such record date.
SECTION 9.05 NOTATION ON OR EXCHANGE OF NOTES. Notes authenticated and made
available for delivery after the execution of any supplemental indenture
pursuant to this Article 9 may, and shall, if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Board of Directors of the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and made available for delivery by the Trustee in
exchange for outstanding Notes.
SECTION 9.06 TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 9 if the
supplemental indenture does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. If it does, the Trustee may, but need not, sign
it. In signing such amendment the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officers' Certificate and Opinion
of Counsel stating that such supplemental indenture is authorized or permitted
by this Indenture.
SECTION 9.07 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture under this Article 9, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter
authenticated and made available for delivery hereunder shall be bound thereby.
71
77
ARTICLE 10
MISCELLANEOUS
-------------
SECTION 10.01 TRUST INDENTURE ACT CONTROLS. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by operation of
subsection (c) of Section 318 of the TIA, the imposed duties shall control. The
provisions of Sections 310 to 317, inclusive, of the TIA that impose duties on
any Person (including provisions automatically deemed included in an indenture
unless the indenture provides that such provisions are excluded) are a part of
and govern this Indenture, except as, and to the extent, expressly excluded from
this Indenture, as permitted by the TIA.
SECTION 10.02 NOTICES. Any notice or communication shall be in writing and
delivered in Person or mailed by first-class mail, postage prepaid, addressed as
follows:
if to the Company:
Nortek, Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxxx X. Xxxxxx
if to any Subsidiary Guarantor:
[Name of Guarantor]
c/o Nortek Inc.
00 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: President
if to the Trustee:
State Street Bank and Trust Company
00 Xxxxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
72
78
-with a copy to-
State Street Bank and Trust Company
Xxx Xxxxxxxxxxxxx Xxxxx - 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Corporate Trust Department - Nortek Notes
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the Holder
at the Holder's address as it appears on the registration books of the Registrar
and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a 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, it is duly given, whether
or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent or co-registrar.
SECTION 10.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS. Holders may
communicate pursuant to TIA Section 312(b) with other Holders with respect to
their rights under this Indenture or the Notes. The Company, the Trustee, the
Registrar, the Paying Agent and anyone else shall have the protection of TIA
Section 312(c).
SECTION 10.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon any
request or application by the Company to the Trustee to take any action under
this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION . Each
Officers' Certificate and Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
73
79
(1) a statement that each Person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of examination or
investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such Person, he has made
such examination or investigation as is necessary to enable such Person to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement that, in the opinion of such Person, such covenant or
condition has been complied with; provided, however, that with respect to
matters of fact, an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
SECTION 10.06 SEPARABILITY CLAUSE. In case any provision in this Indenture,
the Notes or any Subsidiary Guaranty 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 10.07 RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR. The Trustee may
make reasonable rules for action by or a meeting of Holders. The Registrar and
Paying Agent may make reasonable rules for their functions.
SECTION 10.08 LEGAL HOLIDAYS. A "Legal Holiday" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and, if the action to be taken on such date is a payment in
respect of the Notes, no principal, premium, if any, interest installment or
Liquidated Damages, if any, shall accrue for the intervening period.
SECTION 10.09 GOVERNING LAW. THIS INDENTURE, THE NOTES AND EACH SUBSIDIARY
GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH OF THE
PARTIES AGREES TO SUBMIT TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS OF
THE STATE OF NEW YORK IN NEW YORK CITY IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS INDENTURE.
SECTION 10.10 NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company or any Subsidiary Guarantor shall not have
any liability for any obligations of the Company under the Notes or this
Indenture or for any obligations of such Subsidiary Guarantor under its
Subsidiary Guaranty or for any claim based on, in respect of or by reason of
such obligations or their creation. By accepting a Note, each Holder shall waive
and
74
80
release all such liability. The waiver and release shall be part of the
consideration for the issue of the Notes.
SECTION 10.11 SUCCESSORS. All agreements of the Company and any Subsidiary
Guarantor in this Indenture, the Notes and any Subsidiary Guaranties shall bind
their successors. All agreements of the Trustee in this Indenture shall bind its
successor.
SECTION 10.12 MULTIPLE ORIGINALS. The parties may sign any number of copies
of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
75
81
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
NORTEK, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------------
Title: Vice President and General Counsel
-----------------------------------
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
-----------------------------------
Title: Vice President
-----------------------------------
76
82
EXHIBIT A
[FORM OF FACE OF NOTE]
NORTEK, INC.
9 1/8% [Series A/B] Senior Note due September 1, 2007
No. ___ CUSIP No. _______
$____________
Nortek, Inc., a Delaware corporation ("the Company", which term includes
any successor corporation under the Indenture hereinafter referred to), promises
to pay to _________________ or its registered assigns, the principal amount of
________________ Dollars on September 1, 2007.
Interest Payment Dates: September 1 and March 1, commencing March 1, 1998.
Record Dates: August 15 and February 15.
Reference is hereby made to the further provisions of this Note set forth
on the following pages which further provisions shall for all purposes have the
same effect as if set forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually
or by facsimile by its duly authorized officers and a facsimile of its corporate
seal to be affixed hereto or imprinted hereon.
NORTEK, INC.
By:______________________
Name:
Title:
ATTESTED:
By:______________________
Name:
Title:
A-1
83
[SEAL]
Dated:________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in
the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By:__________________________
Authorized Officer
A-2
84
[UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"),
TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS NOTE IS A GLOBAL NOTE WITHIN
THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER. THIS GLOBAL NOTE MAY NOT
BE EXCHANGED, IN WHOLE OR IN PART, FOR A NOTE REGISTERED IN THE NAME OF ANY
PERSON OTHER THAN THE DEPOSITORY TRUST COMPANY OR A NOMINEE THEREOF EXCEPT IN
THE CIRCUMSTANCES SET FORTH IN SECTION 2.06 OF THE INDENTURE, AND MAY NOT BE
TRANSFERRED, IN WHOLE OR IN PART, EXCEPT IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.06 OF THE INDENTURE. BENEFICIAL INTEREST IN THIS GLOBAL NOTE
MAY NOT BE TRANSFERRED EXCEPT IN ACCORDANCE WITH SECTION 2.06 OF THE
INDENTURE.(1)]
["THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD TO, OR FOR
THE ACCOUNT OR BENEFIT OF, ANY PERSON EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (a) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT), (B) IT IS AN "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) WHO IS AN INSTITUTION (AN "INSTITUTIONAL
ACCREDITED INVESTOR"), OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (2) AGREES THAT IT WILL NOT PRIOR TO THE DATE WHICH IS TWO YEARS
-------------------
(1) This paragraph should be included only if the Note is issued in global
form.
A-3
85
AFTER THE LATER OF THE DATE OF ORIGINAL ISSUANCE OF THIS NOTE AND THE LAST DATE
ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE
(THE "RESALE RESTRICTION TERMINATION DATE") OFFER, SELL OR OTHERWISE TRANSFER
THIS NOTE, EXCEPT (A) TO THE ISSUER, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER PURCHASING FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH THE
RESALE PROVISIONS OF RULE 144A UNDER THE SECURITIES ACT, (C) TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A
WRITTEN CERTIFICATION CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE), (D) PURSUANT TO THE RESALE LIMITATIONS PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (F) OUTSIDE THE U.S. TO A
FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF REGULATION S UNDER
THE SECURITIES ACT OR (G) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (BASED, IN THE CASE OF CLAUSES
(C), (D), (F) AND (G) ABOVE, UPON AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE ISSUER IF THE ISSUER SO REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES TO
ANY REQUIREMENT OF LAW THAT THE DISPOSITION OF ITS PROPERTY OR THE PROPERTY OF
SUCH ACCOUNT BE AT ALL TIMES WITHIN ITS CONTROL AND TO COMPLIANCE WITH
APPLICABLE STATE SECURITIES LAWS AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THIS NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE ISSUER
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE FOREGOING RESTRICTIONS ON RESALE WILL
NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE."](2)
---------------------
(2) This paragraph should not be included on Exchange Notes received in an
Exchange Offer.
A-4
86
["THIS SECURITY MAY NOT BE OFFERED OR SOLD TO A U.S. PERSON (AS SUCH TERM IS
DEFINED IN REGULATION S UNDER THE SECURITIES ACT) OR FOR THE ACCOUNT OR BENEFIT
OF A U.S. PERSON PRIOR TO THE EXPIRATION OF THE OFFSHORE NOTES EXCHANGE DATE (AS
DEFINED IN THE INDENTURE), AND NO TRANSFER OR EXCHANGE OF THIS SECURITY MAY BE
MADE FOR AN INTEREST IN A CERTIFICATED SECURITY UNTIL AFTER THE LATER OF THE
DATE OF EXPIRATION OF THE OFFSHORE NOTES EXCHANGE DATE AND THE DATE ON WHICH THE
PROPER REQUIRED CERTIFICATION RELATING TO SUCH INTEREST HAS BEEN PROVIDED IN
ACCORDANCE WITH THE TERMS OF THE INDENTURE, TO THE EFFECT THAT THE BENEFICIAL
OWNER OR OWNERS OF SUCH INTEREST ARE NOT U.S. PERSONS."](3)
---------------------------------------
(3) This paragraph should only be included on the Temporary Regulation S
Global Note.
A-5
87
[FORM OF REVERSE SIDE OF NOTE]
9 1/8% [Series A/B] Senior Note due September 1, 2007
(1) INTEREST.
Nortek, Inc., a Delaware corporation ("the Company") promises to pay
interest on the principal amount of this Note at the rate per annum shown above
and to pay Liquidated Damages, if any, payable pursuant to Section 2 of the
Registration Rights Agreement referred to below. Interest will be payable
semi-annually on each interest payment date, commencing March 1, 1998. Interest
and Liquidated Damages, if any, on the Notes will accrue from the most recent
date to which interest has been paid, or if no interest has been paid, from
August 26, 1997; provided that, if there is no existing Event of Default in the
payment of interest and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding interest payment date,
interest shall accrue from such interest payment date. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
The Company shall pay interest on overdue principal and interest on overdue
installments of interest and Liquidated Damages, to the extent lawful, at 2%
above the rate per annum borne by the Notes.
(2) METHOD OF PAYMENT
The Company will pay interest on the Notes (except defaulted interest) and
Liquidated Damages to the persons who are registered Holders at the close of
business on March 1, and September 1, as the case may be, immediately preceding
the interest payment date even if the Note is canceled on registration of
transfer or registration of exchange (other than with respect to the purchase of
Notes pursuant to an offer to purchase Notes made in connection with Section
4.11 or 4.12 of the Indenture after such record date). Holders must surrender
Notes to a Paying Agent to collect principal payments. 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. However, the Company may pay principal, premium, if
any, interest and Liquidated Damages, if any, by its check payable in such
money; provided, that payment by wire transfer of immediately available/same day
funds will be required with respect to principal, premium, if any, interest and
Liquidated Damages, if any, on all Global Notes. It may mail an interest payment
to a Holder's address as it appears on the Register.
A-6
88
(3) PAYING AGENT AND REGISTRAR
Initially, the Trustee will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent or Registrar without notice, other than
notice to the Trustee. The Company or any Subsidiary or an Affiliate of either
of them may act as Paying Agent, Registrar or co-registrar.
(4) INDENTURE
The Company issued the Notes under an Indenture, dated as of August 26,
1997 (the "Indenture"), between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended and as in effect on
the date of the Indenture (the "TIA") and as provided in the Indenture.
Capitalized terms used herein and not defined herein have the meaning ascribed
thereto in the Indenture. The Notes are subject to all such terms, and Holders
are referred to the Indenture and the TIA for a statement of those terms.
The Notes are unsecured obligations of the Company limited to $310,000,000
aggregate principal amount.
To the extent permitted by the terms of the Company's 9 7/8% Senior
Subordinated Notes due 2004 (the "9 7/8% Notes") and the indenture governing the
9 7/8% Notes (the "9 7/8% Indenture"), all obligations owing under the Indenture
and the Notes, including interest accruing after the occurrence of an event
described in clause (5) or (6) of Section 6.01 of the Indenture, shall
constitute "Specified Senior Indebtedness" or similarly-designated indebtedness
under the 9 7/8% Notes and the 9 7/8% Indenture and under any other existing or
future subordinated indebtedness of the Company.
(5) GUARANTIES
This Note may be entitled after the date hereof to certain senior
Subsidiary Guaranties made for the benefit of the Holders. Reference is hereby
made to Section 4.14 of the Indenture and to Exhibits E and F to the Indenture
for the terms of any such Subsidiary Guaranty.
(6) OPTIONAL REDEMPTION
The Notes are redeemable as a whole, or from time to time in part, at any
time on and after September 1, 2002 at the option of the Company at the
following redemption prices (expressed as a percentage of principal) together
with accrued and unpaid interest and Liquidated Damages, if any, thereon to the
Redemption Date (the "Redemption Price") if redeemed in the twelve-month period
commencing:
A-7
89
September 15, REDEMPTION PRICE
2002 104.563%
2003 103.042%
2004 101.521%
2005 and thereafter 100.000%
(7) NOTICE OF REDEMPTION
Notice of redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Notes to be redeemed at the
Holder's registered address. Notes in denominations larger than $1,000 of
principal amount may be redeemed in part but only in integral multiples of
$1,000 of principal amount.
(8) REQUIREMENT THAT THE COMPANY OFFER TO PURCHASE NOTES UNDER CERTAIN
CIRCUMSTANCES
Subject to the terms and conditions of the Indenture, the Company shall
become immediately obligated to offer to purchase the Notes pursuant to Section
4.11 of the Indenture after the occurrence of a Change in Control of the Company
at a price equal to 101% of aggregate principal amount plus accrued and unpaid
interest and Liquidated Damages, if any, to the date of purchase. In addition,
to the extent that there are Net Cash Proceeds from Asset Sales which are not
reinvested, the Company will be obliged to offer to purchase Securities at 100%
of principal amount plus accrued and unpaid interest and Liquidated Damages, if
any, in accordance with Section 4.12 of the Indenture.
(9) DENOMINATIONS: TRANSFER: EXCHANGE
The Notes are in registered form, without coupons, in denominations of
$1,000 of principal amount and integral multiples of $1,000. A Holder may
transfer or exchange Notes in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Notes selected
for redemption (except, in the case of a Note to be redeemed in part, the
portion of the Note not to be redeemed) or any Notes for a period of 15 days
before selection of Notes to be redeemed.
(10) PERSONS DEEMED OWNERS
The registered Holder of this Note may be treated as the owner of this Note
for all purposes.
(11) AMENDMENT: WAIVER
A-8
90
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Notes may be amended with the written consent of the Holders of at least
a majority in aggregate principal amount of the Notes at the time outstanding
and (ii) certain defaults or noncompliance with certain provisions may be waived
with the written consent of the Holders of a majority in aggregate principal
amount of the Notes at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Holder, the Company and the
Trustee may amend the Indenture or the Notes to cure any ambiguity, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Notes in addition to certificated Notes, or to comply with any
requirements of the Securities and Exchange Commission in connection with the
qualification of the Indenture under the TIA, or to make any change that does
not adversely affect the rights of any Holder.
(12) DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) default in payment of
the principal amount, premium, if any, interest or Liquidated Damages, if any,
in respect of the Notes when the same becomes due and payable subject, in the
case of interest and Liquidated Damages, to the grace period contained in the
Indenture; (ii) failure by the Company to comply with other agreements in the
Indenture or the Notes, subject to notice and lapse of time; (iii) certain
events of acceleration prior to maturity of certain indebtedness; (iv) certain
final judgments which remain undischarged; (v) certain events of bankruptcy or
insolvency; or (vi) certain failures of Subsidiary Guaranties. If an Event of
Default occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes at the time outstanding, may declare all
the Notes to be due and payable immediately. Certain events of bankruptcy or
insolvency are Events of Default which will result in the Notes becoming due and
payable immediately upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Notes except as provided in
the Indenture. The Trustee may refuse to enforce the Indenture or the Notes
unless it receives reasonable indemnity or security. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the Notes at
the time outstanding may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing Default
(except a Default in payment of amounts specified in clause (i) above) if it
determines that withholding notice is in their interests.
(13) TRUSTEE DEALINGS WITH THE COMPANY
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
A-9
91
(14) NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company or
any Subsidiary Guarantor shall not have any liability for any obligations of the
Company under the Notes or the Indenture or for any obligations of a Subsidiary
Guarantor under its Subsidiary Guaranty or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Note, each
Holder waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Notes.
(15) AUTHENTICATION
This Note shall not be valid until an authorized officer of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note.
(16) ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT
TEN (=joint tenants with right of survivorship and not as tenants in common),
CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
(17) UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed for two
years, the Trustee or Paying Agent will pay the money back to the Company or, if
applicable, a Subsidiary Guarantor upon request. After that, Holders entitled to
money must look to the Company or such Subsidiary Guarantor for payment.
(18) DISCHARGE PRIOR TO MATURITY
If the Company or any Subsidiary Guarantor deposits with the Trustee or
Paying Agent money or U.S. Government Obligations sufficient to pay the
principal of, premium, if any, interest and Liquidated Damages, if any, on the
Notes to maturity, the Company and the Subsidiary Guarantors will be discharged
from the Indenture except for certain Sections thereof.
(19) REGISTRATION RIGHTS AGREEMENT.
In addition to the rights provided to and the obligations of Holders of
Notes under the Indenture, Holders of Transfer Restricted Securities shall have
all the rights and shall be subject to all the obligations set forth in the
Registration Rights Agreement, dated as of the date of the Indenture.
A-10
92
(20) CUSIP NUMBERS.
Pursuant to a recommendation promulgated by the Committee on Uniform Note
Identification Procedures, the Company will cause CUSIP numbers to be printed on
the Notes as a convenience to Holders of the Notes. No representation is made as
to the accuracy of such numbers as printed on the Notes and reliance may be
placed only on the other identification numbers printed hereon.
(21) SUCCESSOR.
When a successor Person to the Company or a Subsidiary Guarantor assumes
all the obligations of its predecessor under the Notes, a Subsidiary Guaranty
and the Indenture such predecessor shall be released from those obligations.
(22) GOVERNING LAW
THE INDENTURE, THIS NOTE AND ANY SUBSIDIARY GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED
TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
(23) INDENTURE.
Each Holder, by accepting a Note, agrees to be bound by all of the terms
and provisions of the Indenture, as the same may be amended from time to time.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture or Registration Rights Agreement.
A-11
93
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to:
--------------------------------------------------------------------------------
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX I.D. NUMBER))
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(PRINT OR TYPE ASSIGNEE'S NAME, ADDRESS AND ZIP CODE)
and irrevocably appoint_________________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated:_________________________ Signature:_________________________________
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE OTHER SIDE OF THIS NOTE)
Signature
Guarantee:______________________________________________________________________
(PARTICIPANT IN RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM)
NOTICE: Your Signature must be guaranteed by an Institution which is a member of
one of the following recognized signature Guarantee Programs: (i) the Securities
Transfer Agent Medallion Program; (ii) The New York Stock Exchange Medallion
Program; (iii) The Stock Exchange Medallion Program; or (iv) any other guarantee
program acceptable to the Trustee.
In connection with any transfer of this Note the Holder hereof may be required
by the Indenture to deliver to the Trustee and the Registrar a certification
substantially in the form of Exhibit B to the Indenture.
A-12
94
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this Note purchased by
the Company pursuant to Section 4.11 ("Change of Control Offer") or Section 4.12
("Excess Proceeds Offer") of the Indenture, check the applicable boxes:
[ ] Change of Control Offer: [ ] Excess Proceeds
Offer:
in whole [ ] in whole [ ]
in part [ ] in part [ ]
Amount to be Amount to be
purchased: $__________ purchased: $____________
Dated:_________________________ Signature:_________________________________
(SIGN EXACTLY AS YOUR NAME APPEARS
ON THE OTHER SIDE OF THIS NOTE)
Signature
Guarantee:______________________________________________________________________
(PARTICIPANT IN RECOGNIZED SIGNATURE GUARANTEE MEDALLION PROGRAM)
Social Security Number/
or Taxpayer Identification Number:
A-13
95
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTES
The following increases or decreases in this Global Note have been made:
DATE OF AMOUNT OF AMOUNT OF PRINCIPAL SIGNATURE
EXCHANGE DECREASE IN INCREASE IN AMOUNT OF OF
PRINCIPAL PRINCIPAL THIS GLOBAL AUTHORIZED
AMOUNT OF AMOUNT OF NOTE OFFICER OF
THIS GLOBAL THIS GLOBAL FOLLOWING TRUSTEE OR
NOTE NOTE SUCH DECREASE NOTE
(OR INCREASE) CUSTODIAN
--------- ------------- ------------ -------------- -------------
96
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: 9 1/8% [Series [A/B] Senior Notes due 2007 of Nortek, Inc.
This Certificate relates to $______ principal amount of Notes held in **
_____________ book-entry or * / _________ definitive form by ___________________
__________ (the "Transferor").
The Transferor:*/
[ ] has requested the Registrar by
written order to exchange or register the transfer of a
Note or Notes; or
[ ] has requested the Trustee by written order to exchange its Note or
Notes in definitive, registered form for a beneficial interest in a
Global Note held by the Depository equal to the principal amount of
Notes it holds (or the portion thereof indicated above); or
[ ] has requested the Trustee by
written order to deliver in exchange for its beneficial interest in a
Global Note held by the Depository a Note or Notes in definitive,
registered form equal to its beneficial interest in such Global Note
(or the portion thereof indicated above).
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with the
Indenture relative to the above captioned Notes and that the transfer
of this Note does not require registration under the Securities Act (as
defined below) because:*/
[ ] Such Note is being acquired for the Transferor's own account without
transfer (in satisfaction of Section 2.06(1)(b)(i), Section 2.06(2)(a)
or Section 2.06(4)(a)(i) of the Indenture).
-----------------------------------
**/ Check applicable box.
B-1
97
[ ] Such 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 a transaction meeting the requirements of Rule
144A under the Securities Act.
[ ] Such Note is being transferred outside the U.S. to a foreign person
pursuant to an exemption from registration in a transaction meeting the
requirements of Regulation S under the Securities Act (based on an
opinion of counsel if the Company so requests and together with a
certification in substantially the form of Exhibit D to the Indenture).
[ ] Such Note is being transferred in a transaction meeting the
requirements of Rule 144 under the Securities Act (based on an opinion
of counsel if the Company so requests).
[ ] Such Note is being transferred pursuant to an effective registration
statement under the Securities Act.
[ ] Such 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 (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 Note is being transferred in reliance on and in compliance with
another exemption from the registration requirements of the Securities
Act (based on an opinion of counsel if the Company so requests).
--------------------------------
[INSERT NAME OF TRANSFEROR]
By:_____________________________
Name:
Title:
Address:
Date:__________________
TO BE COMPLETED BY TRANSFEREE IF SECOND BOX ABOVE IS CHECKED
B-2
98
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as the undersigned has requested
pursuant to Rule 144A or has determined not to request such information and that
it is aware that the transferor is relying upon the undersigned's foregoing
representations in order to claim the exemption from registration provided by
Rule 144A.
Date:_______________________ Signed:________________________________
NOTICE: To be executed by an
executive officer
B-3
99
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
ACCREDITED INSTITUTIONS
----------------- --, ----
State Street Bank and Trust Company,
as Registrar
Attn: Corporate Trust Department
Dear Sirs:
In connection with our proposed purchases of $________ aggregate principal
amount of 9 1/8% Series [A/B] Senior Notes due 2007 (the "Notes") of Nortek,
Inc. (the "Issuer"), a Delaware corporation, we confirm that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor," and we are acquiring the Notes for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act or the laws of any
state or other jurisdiction, and we have such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and
risks of our investment in the Notes, and we and any accounts for which we are
acting are each able to bear the economic risk of our or its investment.
2. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture relating to the
Notes (the "Indenture") and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Notes except in compliance with, such
restrictions and conditions of the Securities Act.
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as described below. We agree, on our own behalf and on behalf of any
account for which we are purchasing the Notes, and each subsequent holder of the
Notes by its acceptance thereof will agree, not to offer, sell or otherwise
transfer such Notes prior to the date which is two years after the later of the
date of original issue of such Notes and the last date on which the Issuer or
any affiliate of the Issuer was the owner of such Notes (the "Resale Restriction
Termination Date"), except (A) to the Issuer, (B) in accordance with Rule 144A
under the Securities Act to
C-1
100
a "qualified institution buyer" (as defined therein) in a transaction meeting
the requirements of Rule 144A, (C) to an institutional "accredited investor" (as
defined above) that is purchasing for his own account or for the account of such
an "accredited investor" and that, prior to such transfer, furnishes to the
Trustee (as defined in the Indenture) a signed letter, substantially identical
to this letter, containing certain representations and agreements relating to
the restrictions on transfer of the Notes (the form of which letter can be
obtained from the Trustee), (D) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act, if available, (E) pursuant to an
effective registration statement under the Securities Act, (F) outside the U.S.
to a foreign person in a transaction meeting the requirements of Regulation S
under the Securities Act, or (G) pursuant to any other available exemption from
the registration requirements of the Securities Act (based, in the cases of
clauses (C), (D), (F) and (G), upon an opinion of counsel reasonably acceptable
to the Issuer if the Issuer so requests), subject in each of the foregoing
cases, to any requirement of law that the disposition of our property or the
property of such investor account or accounts be at all times within our or
their control and to compliance with applicable securities laws of any state of
other jurisdiction. The foregoing restrictions on resale will not apply
subsequent to the Resale Restriction Termination Date, and we further agree to
provide to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We understand that, on any proposed offer, sale or other transfer of any
Notes prior to the Resale Restriction Termination Date, we will be required to
furnish to the Trustee and the Issuer such certifications, legal opinions, and
other information as either of them may reasonably require to confirm that the
proposed transaction complies with the foregoing restrictions. We further
understand that the Notes purchased by us will bear a legend reflecting the
substance of this and the preceding paragraph.
5. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an institutional "accredited investor")
as to each of which we exercise sole investment discretion.
We acknowledge that you, the Trustee and others are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
thereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. We agree to notify
you promptly in writing if any of our representations or warranties 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.
-----------------------------------
(Name of Purchaser)
By:_____________________________
Name:
Title:
Address:
C-2
101
EXHIBIT D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
------------------ --, ----
State Street Bank and Trust Company,
as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed sale of $___________ aggregate principal
amount of 9 1/8% Series [A/B] Senior Notes due 2007 (the "Notes") of Nortek,
Inc., a Delaware corporation (the "Company"), we represent that:
(i) the offer of the Notes was not made to a person in the United
States;
(ii) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf
reasonably believed that the transferee was outside the United States;
(iii) no directed selling efforts have been made by us, any of our
affiliates or any person acting on our or their behalf in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(iv) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
D-1
102
You and the Company are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
---------------------------
[Name of Transferor]
By:________________________
Name:
Date:
Title:
D-2
103
EXHIBIT E
ARTICLE 11
GUARANTY OF NOTES
-----------------
SECTION 11.01. SUBSIDIARY GUARANTY. Subject to the provisions of this
Article 11, each Subsidiary Guarantor hereby unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
that: (i) the principal of, premium, if any, interest on and Liquidated Damages,
if any, with respect to the Notes will be duly and punctually paid in full when
due, whether at maturity, by acceleration or otherwise, and interest on the
overdue principal and (to the extent permitted by law) interest, if any, on the
Notes and all other obligations of the Company or the Subsidiary Guarantors to
the Holders or the Trustee hereunder or thereunder (including fees and expenses)
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and (ii) in case of any extension of time of payment or
renewal of any Notes or any such obligations with respect to the Notes, the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at Stated Maturity, by acceleration or
otherwise. This Subsidiary Guaranty is a present and continuing guaranty of
payment and performance, and not of collectibility. Accordingly, failing payment
when due of any amount so guaranteed, or failing performance of any other
obligation of the Company to the Holders under this Indenture or the Notes, for
whatever reason, each Subsidiary Guarantor shall be obligated to pay, or to
perform or cause the performance of, the same immediately.
Each Subsidiary Guarantor hereby agrees that its obligations under its
Subsidiary Guaranty shall be absolute and unconditional, irrespective of any
invalidity, irregularity or unenforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, any release of
any other Subsidiary Guarantor or any other obligor under the Notes, the
recovery of any judgment against the Company, any action to enforce the same,
whether or not a Subsidiary Guaranty is affixed to any particular Note, or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives the
benefit of diligence, presentment, demand of payment, filing of claims with a
court in the event of insolvency or bankruptcy of the Company or any other
obligor under the Notes, any right to require a proceeding first against the
Company or any such obligor, protest, notice and all demands whatsoever and
covenants that its Subsidiary Guaranty will not be discharged except by complete
performance the obligations contained in the Notes, this Indenture and its
Subsidiary Guaranty. If any Holder or the Trustee is required by any court or
otherwise to return to the Company or to any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or such Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Holder, each Subsidiary Guaranty, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary
X-0
000
Xxxxxxxxx further agrees that, as between it, on the one hand, and the Holders
of Notes and the Trustee, on the other hand, (i) subject to this Article 11, the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article 6 hereof for the purposes of each Subsidiary Guaranty, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed by this Subsidiary Guaranty, and (ii) in
the event of any acceleration of such obligations as provided in Article 6
hereof, such obligations (whether or not due and payable) shall forthwith become
due and payable by each Subsidiary Guarantor for the purpose of its Subsidiary
Guaranty. Upon the effectiveness of any acceleration of the obligations
guaranteed by this Subsidiary Guaranty the Trustee shall promptly make a demand
for payment of such obligations by each Subsidiary Guarantor under this
subsidiary Guaranty. The obligations of the Subsidiary Guarantors under this
Subsidiary Guaranty shall be joint and several.
Each Subsidiary Guaranty shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded, or reduced in amount, or must otherwise
be restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Notes shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
No stockholder, officer, director, employer or incorporator, past, present
or future, of any Subsidiary Guarantor, as such, shall have any personal
liability under such Subsidiary Guarantor's Subsidiary Guaranty by reason of
his, her or its status as such stockholder, officer, director, employer or
incorporator.
The Subsidiary Guarantors shall have the right to seek contribution from
any non-paying Subsidiary Guarantor so long as the exercise of such right does
not impair the rights of the Holders under any Subsidiary Guaranty.
Each Subsidiary Guaranty may be modified from time to time, without the
consent of the Holders, to reflect such fraudulent conveyance savings
provisions, net worth or maximum amount limitations as to recourse or similar
provisions as are set forth in, and after giving effect to, any guaranty by any
Subsidiary Guarantor of any Senior Indebtedness with respect to the Company
Credit Facility as such guaranty may be amended or otherwise modified from time
to time, PROVIDED that no such modification of this Subsidiary Guaranty shall
adversely affect the Holders in any respect or shall disadvantage the Holders
relative to the holders of Indebtedness of such Subsidiary Guarantor with
respect to the Company Credit Facility.
E-2
105
SECTION 11.02. EXECUTION DELIVERY OF SUBSIDIARY GUARANTY. The validity and
enforceability of this Subsidiary Guaranty shall not be affected by the fact
that it is not affixed to any particular Note, and each Subsidiary Guarantor
hereby agrees that its Subsidiary Guaranty shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guaranty.
If an Officer of a Subsidiary Guarantor whose signature is on the Indenture
or a Subsidiary Guaranty no longer holds that office at the time the Trustee
authenticates any Note or at any time thereafter, such Subsidiary Guarantor's
Subsidiary Guaranty of such Note shall be valid nevertheless.
The delivery by any Subsidiary Guarantor to the Trustee of any Subsidiary
Guaranty as required by Section 4.14 shall constitute due delivery of such
Subsidiary Guaranty on behalf of such Subsidiary Guarantor to and for the
benefit of all Holders of the Notes.
SECTION 11.03. ADDITIONAL GUARANTORS. Any person may become a guarantor of
the Notes by executing and delivering to the Trustee (i) a supplemental
indenture in form and substance satisfactory to the Trustee, which subjects such
person to the provisions of this Indenture as a guarantor of the Notes, and (ii)
an Opinion of Counsel to the effect that such supplemental indenture has been
duly authorized and executed by such person and constitutes the legal, valid,
binding and enforceable obligation of such person (subject to such customary
exceptions concerning fraudulent conveyance laws, creditors' rights and
equitable principles as may be acceptable to the Trustee in its discretion).
SECTION 11.04. RELEASE OF SUBSIDIARY GUARANTOR. Notwithstanding anything to
the contrary contained in this Indenture in the event that Section 4.14 of the
Indenture ceases to have further force or effect each Subsidiary Guarantor shall
be, and in the event a Subsidiary Guarantor is released from all obligations
which pursuant to Section 4.14 hereof would obligate it to become a Subsidiary
Guarantor (if it was not already a Subsidiary Guarantor) such Subsidiary
Guarantor shall be, automatically and unconditionally released from all
obligations under its Subsidiary Guaranty without any further action required on
the part of the Trustee or any Holder, PROVIDED that, to the extent the
provisions of Section 4.14 remain in force and effect, the provisions of Section
4.14 hereof shall apply anew in the event that such Subsidiary Guarantor
subsequent to being released incurs any obligations that pursuant to Section
4.14 hereof obligate it to become a Subsidiary Guarantor. In addition, upon (i)
the designation of any Subsidiary Guarantor as an Unrestricted Subsidiary in
compliance with the terms of this Indenture or (ii) the sale or other
disposition (by merger or otherwise) of a Subsidiary Guarantor by the Company or
a Restricted Subsidiary of the Company to any Person that is not an Affiliate of
the Company or any of its Restricted Subsidiaries which is otherwise in
compliance with the terms of this Indenture, such Subsidiary Guarantor shall be
automatically and unconditionally released from all obligations under its
Subsidiary Guaranty without any further action required on the part of the
Trustee or any Holder, PROVIDED that such sale or other disposition, or
consolidation or merger is made in
E-3
106
accordance with the terms of this Indenture, including Sections 4.12 and 5.01
hereof; PROVIDED, HOWEVER, that the foregoing proviso shall not apply to the
sale or disposition of a Subsidiary Guarantor or of the Capital Stock thereof in
a foreclosure proceeding (whether or not judicial) to the extent that such
proviso would be inconsistent with the requirements of the Uniform Commercial
Code. Notwithstanding the immediately preceding sentence, upon receipt of a
request of the Company accompanied by an Officers' Certificate certifying as to
the compliance with this Section 11.04, the Trustee shall deliver an appropriate
instrument evidencing the release of such Subsidiary Guarantor. Any Subsidiary
Guarantor not so released or the entity surviving such Subsidiary Guarantor, as
applicable, shall remain or be liable under its Subsidiary Guaranty as provided
in this Article 11.
E-4
107
EXHIBIT F
SENIOR GUARANTY
---------------
For value received. the undersigned hereby unconditionally guarantees to
the holder of a Note (as that term is defined in the Indenture dated as of
August 26, 1997 (the "Indenture"), between Nortek, Inc. (the "Company") and
State Street Bank and Trust Company, as trustee (the "Trustee") and the Trustee,
the payments of principal of, premium, if any, interest on and Liquidated
Damages, if any, with respect to such Note in the amounts and at the time when
due and interest on the overdue principal, premium, if any, interest and
Liquidated Damages, if any, of such Note, if lawful, and the payments or
performance of all other obligations of the Company under the Indenture or the
Notes, all in accordance with and subject to the terms and limitations of such
Note, Article 11 of the Indenture and this Guaranty. This Guaranty shall become
effective in accordance with Article 11 of the Indenture. The validity and
enforceability of this Guaranty shall not be affected by the fact that it is not
affixed to any particular Note.
The obligations of the undersigned to the holders of Notes and to the
Trustee pursuant to this Guaranty and the Indenture are expressly set forth in
Article 11 of the Indenture and reference is hereby made to the Indenture for
the precise terms of this Guaranty and all of the other provisions of the
Indenture to which this Guaranty relates. Each holder of a Note, by accepting
the same, agrees to and shall be bound by such provisions.
This Guaranty is subject to release upon the terms set forth in the
Indenture.
[NAME OF SUBSIDIARY GUARANTOR]
By:_______________________
Name:
Title:
F-1
108
EXHIBIT G
FORM OF CERTIFICATE TO BE DELIVERED
-----------------------------------
UPON TERMINATION OF RESTRICTED PERIOD
-------------------------------------
State Street Bank and Trust Company,
as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
This letter relates to Notes represented by the Temporary Regulation S
Global Note certificate (the "Temporary Certificate"). Pursuant to Section 2.01
of the Indenture dated as of August 26, 1997 relating to the Notes (the
"Indenture"), we hereby certify that (1) we are the beneficial owner of
$[__________] principal amount of Original Notes represented by the Temporary
Certificate and (2) we are a person outside the United States to whom the
Original Notes could be transferred in accordance with Rule 904 of Regulation S
promulgated under the Securities Act of 1933, as amended. Accordingly, you are
hereby requested to issue a Definitive Note representing the undersigned's
interest in the principal amount of Original Notes represented by the Temporary
Certificate, all in the manner provided by the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
----------------------------
[Name of Holder]
By: ________________________
Name:
Date:
Title:
G-1
109
CROSS REFERENCE TABLE(5)
TIA INDENTURE
SECTION SECTION
310(a)(1)............................................... 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.(6)
(a)(4)............................................ N.A.
(a)(5)............................................ 7.10
(b)............................................... 7.08; 7.10
(c)............................................... N.A.
311(a) 7.11
(b)............................................... 7.11
(c)............................................... N.A.
312(a) 2.05
(b)............................................... 10.03
(c)............................................... 10.03
313(a) 7.06
(b)(1)............................................ N.A.
(b)(2)............................................ 7.06
(c)............................................... 10.02
(d)............................................... 7.06
314(a) 4.02; 10.02
(b)............................................... N.A.
(c)(1)............................................ 10.04
(c)(2)............................................ 10.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 10.05
(f)............................................... 4.03
315(a) 7.01
(b)............................................... 7.05; 10.02
(c)............................................... 7.01
(d)............................................... 7.07
(e)............................................... 6.11
316(a) (last sentence).................................. 2.08
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
---------------------------------
(5) Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of this Indenture.
(6) N.A. means Not Applicable.
G-i
110
(b)............................................... 6.07
(c)............................................... N.A.
317(a)(1)............................................... 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
318(a).................................................. 10.01
