Kinetek Industries, Inc.,
as Issuer
Kinetek, Inc.,
as Guarantor
The Guarantor Subsidiaries,
as Guarantors
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$15,000,000 5% SENIOR SECURED NOTES DUE 2007
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INDENTURE
DATED AS OF APRIL 12, 2002
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U.S. BANK NATIONAL ASSOCIATION
Trustee
This Indenture, dated as of April 12, 2002, is among Kinetek
Industries, Inc., a Delaware corporation (the "Company"), Kinetek, Inc.
(the "Parent"), the Guarantor Subsidiaries (as defined herein), and U.S.
Bank National Association, as trustee (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
5% Senior Notes due 2007 ("Senior Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Affiliate" means any of the following: (i) any Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company, (ii) any spouse, immediate family
member or other relative who has the same principal residence as any Person
described in clause (i) above, (iii) any trust in which any such Persons
described in clause (i) or (ii) above has a beneficial interest, and (iv)
any corporation or other organization of which any such Persons described
above collectively own 50% or more of the equity of such entity.
"Agent" means any Registrar, Paying Agent or
co-registrar.
"Asset Sale" means the sale, lease, conveyance or other
disposition by the Parent, the Company or a Restricted Subsidiary of assets
or property whether owned on the date of original issuance of the Senior
Notes or thereafter acquired, in a single transaction or in a series of
related transactions, that are outside of the ordinary course of business
of the Parent, the Company or such Restricted Subsidiary; provided that
Asset Sales will not include such sales, leases, conveyances or
dispositions in connection with (i) the sale or disposition of any
Restricted Investment, (ii) any Equity Offering by (a) the Company or (b)
any Restricted Subsidiary if the proceeds therefrom are used to make
mandatory prepayments of Indebtedness under the Credit Facility or
Indebtedness of the Restricted Subsidiaries or redeem Senior Notes as
described in Section 3.07, (iii) the sale or lease of equipment, inventory,
accounts receivable or other assets in the ordinary course of business,
(iv) Receivables Financings, (v) the surrender or waiver of contract rights
or the settlement, release or surrender of contract, tort or other claims
of any kind, (vi) the grant of any license of patents, trademarks,
registration therefor and other similar intellectual property, (vii) a
transfer of assets by the Parent, the Company or a Restricted Subsidiary to
any of the Parent, the Company, a Restricted Subsidiary or a Non-Restricted
Subsidiary, (viii) the designation of a Restricted Subsidiary as a
Non-Restricted Subsidiary pursuant to Section 4.17, (ix) the sale, lease,
conveyance or other disposition of all or substantially all of the assets
of the Parent or the Company as permitted under Section 5.01, (x) the sale
or disposition of obsolete equipment or other obsolete assets, or (xi)
Restricted Payments permitted by Section 4.05.
"Average Life" means, as of the date of determination,
with respect to any Debt or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date
of determination to the dates of each successive scheduled principal
payment of such Debt or redemption payment on such Preferred Stock
multiplied by the amount of such payment by (ii) the sum of all such
payments.
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the Company's board of
directors or any authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Stock" means any and all shares, interests,
participations or other equivalents (however designated) of corporate
stock, including any preferred stock.
"Cash Flow" means, for any given period and Person, the
sum of, without duplication, Consolidated Net Income, plus (a) the portion
of Net Income attributable to the minority interests in its Subsidiaries,
to the extent not included in calculating Consolidated Net Income, plus (b)
any provision for taxes based on income or profits to the extent such
income or profits were included in computing Consolidated Net Income, plus
(c) Consolidated Interest Expense, to the extent deducted in computing
Consolidated Net Income, plus (d) the amortization of all intangible
assets, to the extent such amortization was deducted in computing
Consolidated Net Income (including, but not limited to, inventory
write-ups, goodwill, debt and financing costs, and Incentive Arrangements),
plus (e) any non-capitalized transaction costs incurred in connection with
financings, acquisitions or divestitures (including, but not limited to,
financing and refinancing fees, including those in connection with the
Offering, in each case, to the extent deducted in computing Consolidated
Net Income), plus (f) all depreciation and all other non-cash charges
(including, without limitation, those charges relating to purchase
accounting adjustments and LIFO adjustments), to the extent deducted in
computing Consolidated Net Income, plus (g) any interest income, to the
extent such income was not included in computing Consolidated Net Income,
plus (h) all dividend payments on preferred stock (whether or not paid in
cash) to the extent deducted in computing Consolidated Net Income, plus (i)
any extraordinary or non-recurring charge or expense arising out of the
implementation of SFAS 106 or SFAS 109 to the extent deducted in computing
Consolidated Net Income, plus (j) to the extent not covered in clause (e)
above, fees paid or payable in respect of the Jordan Agreements to the
extent deducted in computing Consolidated Net Income, plus (k) the net loss
of any Person, other than those of a Restricted Subsidiary, to the extent
deducted in computing Consolidated Net Income, plus (l) net losses in
respect of any discontinued operations as determined in accordance with
GAAP, to the extent deducted in computing Consolidated Net Income;
provided, however, that if any such calculation includes any period during
which an acquisition or sale of a Person or the incurrence or repayment of
Indebtedness occurred, then such calculation for such period shall be made
on a Pro Forma Basis.
2
"Cash Flow Coverage Ratio" means, for any given period
and Person, the ratio of: (i) Cash Flow, divided by (ii) the sum of
Consolidated Interest Expense and the amount of all dividend payments on
any series of preferred stock of such Person (except dividends paid or
payable in additional shares of Capital Stock (other than Disqualified
Stock)), in each case, without duplication; provided, however, that if any
such calculation includes any period during which an acquisition or sale of
a Person or the incurrence or repayment of Indebtedness occurred, then such
calculation for such period shall be made on a Pro Forma Basis.
"Change of Control" means the occurrence of each of the
following: (i) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), excluding the Jordan Stockholders and
the Parent and Holdings, is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall
be deemed to have "beneficial ownership" of all securities that such Person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than 50%
of the total Voting Stock of the Company; and (ii) the Company consolidates
with, or merges with or into, another Person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of its
assets to any Person, or any Person consolidates with, or merges with or
into, the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is converted into or exchanged for
cash, securities or other property, other than any such transaction where
(A) the outstanding Voting Stock of the Company is converted into or
exchanged for (1) Voting Stock (other than Redeemable Capital Stock) of the
surviving or transferee corporation or (2) cash, securities and other
property in an amount which could be paid by the Company as a Restricted
Payment under the Indenture and (B) immediately after such transaction no
"person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), excluding the Jordan Stockholders, is the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a Person shall be deemed to have "beneficial ownership" of all
securities that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of more than 50% of the total Voting Stock of the surviving or
transferee corporation; and (iii) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by
such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who are entitled to vote to elect such new
director and were either directors at the beginning of such period or
Persons whose election as directors or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the Board of Directors of the Company then in office.
The definition of Change of Control includes a phrase
relating to the sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of the Company's assets. Although there is a
developing body of case law interpreting the phrase "substantially all,"
there is no precise established definition of the phrase under applicable
law. Accordingly, the ability of a holder of Senior Notes to require the
Company to repurchase such Senior Notes as a result of a sale, lease,
transfer, conveyance or other disposition of less than all of the assets of
the Company and its subsidiaries to another Person may be uncertain.
Furthermore, an acquisition of the Company by the Jordan Stockholders
including pursuant to a spin-off to the Jordan Stockholders by Jordan
Industries, Inc., directly or indirectly of its investment in the Company,
would not constitute a Change of Control.
3
"Collateral" means any assets of the Company, the Parent
or any Guarantor Subsidiary that is defined as "Collateral" in any of the
Security Documents and assets from time to time on which a Lien exists as
security for any of the Obligations hereunder or under the Senior Notes or
the Security Documents; provided that in no event shall Collateral include
Excluded Assets.
"Commission" means the Securities and Exchange Commission.
"Company" means Kinetek Industries, Inc., a Delaware
corporation.
"Consolidated Interest Expense" means, for any given
period and Person, the aggregate of the interest expense in respect of all
Indebtedness of such Person and its Subsidiaries for such period, on a
consolidated basis, determined in accordance with GAAP (including
amortization of original issue discount on any such Indebtedness, all
non-cash interest payments, the interest portion of any deferred payment
obligation and the interest component of capital lease obligations, but
excluding amortization of deferred financing fees if such amortization
would otherwise be included in interest expense); provided, however, that
for the purpose of the Cash Flow Coverage Ratio, Consolidated Interest
Expense shall be calculated on a Pro Forma Basis; provided further that any
premiums, fees and expenses (including the amortization thereof) payable in
connection with the Offering and the application of the net proceeds
therefrom or any other refinancing of Indebtedness will be excluded.
"Consolidated Net Income" means, for any given period and
Person, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with
GAAP; provided, however, that: (i) the Net Income of any Person acquired in
a pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, and (ii) Consolidated Net Income of any
Person will not include, without duplication, any deduction for: (A) any
increased amortization or depreciation resulting from the write-up of
assets pursuant to Accounting Principles Board Opinion Nos. 16 and 17, as
amended or supplemented from time to time, (B) the amortization of all
intangible assets (including amortization attributable to inventory
write-ups, goodwill, debt and financing costs, and Incentive Arrangements),
(C) any non-capitalized transaction costs incurred in connection with
financings, acquisitions or divestitures (including, but not limited to,
financing and refinancing fees), (D) any extraordinary or nonrecurring
charges relating to any premium or penalty paid, write-off of deferred
financing costs or other financial recapitalization charges in connection
with redeeming or retiring any Indebtedness prior to its stated maturity,
and (E) any Restructuring Charges; provided, however, that for purposes of
determining the Cash Flow Coverage Ratio, Consolidated Net Income shall be
calculated on a Pro Forma Basis.
"Consolidated Net Worth" with respect to any Person
means, as of any date, the consolidated equity of the common stockholders
of such Person (excluding the cumulated foreign currency translation
adjustment), all determined on a consolidated basis in accordance with
GAAP, but without any reduction in respect of the payment of dividends on
any series of such Person's preferred stock if such dividends are paid in
additional shares of Capital Stock (other than Disqualified Stock);
provided, however, that Consolidated Net Worth shall also include, without
duplication: (a) the amortization of all write-ups of inventory, (b) the
amortization of all intangible assets (including amortization of goodwill,
debt and financing costs, and Incentive Arrangements), (c) any
4
non-capitalized transaction costs incurred in connection with financings,
acquisitions or divestitures (including, but not limited to, financing and
refinancing fees), (d) any increased amortization or depreciation resulting
from the write-up of assets pursuant to Accounting Principles Board Opinion
Nos. 16 and 17, as amended and supplemented from time to time, (e) any
extraordinary or nonrecurring charges or expenses relating to any premium
or penalty paid, write-off of deferred financing costs or other financial
recapitalization charges incurred in connection with redeeming or retiring
any Indebtedness prior to its stated maturity, (f) any Restructuring
Charges, and (g) any extraordinary or non-recurring charge arising out of
the implementation of SFAS 106 or SFAS 109; provided, however, that
Consolidated Net Worth shall be calculated on a Pro Forma Basis.
"Credit Facility" means the credit facility, dated
December 18, 2001, as amended as of the date hereof among the Company,
certain of its subsidiaries and the lenders party thereto in their
capacities as lenders thereunder and Fleet Capital Corporation, as agent,
together with all loan documents and instruments thereunder (including,
without limitation, any guarantee agreements and security documents), in
each case as such agreements may be amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time,
including any agreement extending the maturity of, refinancing, replacing
or otherwise restructuring (including, without limitation, increasing the
amount of available borrowings thereunder, and all Obligations with respect
thereto, in each case, to the extent permitted by Section 4.07, or adding
Subsidiaries of the Company as additional borrowers or guarantors
thereunder) all or any portion of the Indebtedness under such agreement or
any successor or replacement agreement and whether by the same or any other
agent, lender or group of lenders.
"Default" means any event that is, or after notice or
passage of time or both would be, an Event of Default.
"Definitive Notes" means Senior Notes that are in the
form of Exhibit A attached hereto (but without including the text referred
to in footnotes 1 and 2 thereto).
"Depositary" means, with respect to the Senior Notes
issuable or issued in whole or in part in global form, the Person specified
in Section 2.03 hereof as the Depositary with respect to the Senior Notes,
and any and all successors thereto appointed as depositary hereunder and
having become such pursuant to the applicable provisions of this Indenture.
"Disqualified Stock" means any Capital Stock that by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole
or in part on, or prior to, the maturity date of the Senior Notes.
"Equity Interests" means Capital Stock or partnership
interests or warrants, options or other rights to acquire Capital Stock or
partnership interests (but excluding (i) any debt security that is
convertible into, or exchangeable for, Capital Stock or partnership
interests, and (ii) any other Indebtedness or Obligation) provided,
however, that Equity Interests will not include any Incentive Arrangements
or obligations or payments thereunder.
5
"Equity Offering" means a public or private offering by
the Company and/or its Subsidiaries for cash of Capital Stock or other
Equity Interests and all warrants, options or other rights to acquire
Capital Stock, other than (i) an offering of Disqualified Stock or (ii)
Incentive Arrangements or obligations or payments thereunder.
"Excluded Assets" means any real property acquired or
owned by the Parent, the Company or any Restricted Subsidiary after the
date of original issuance of the Senior Notes in an amount not to exceed
$3.5 million in the aggregate and $1 million per property; provided that
the Board of Directors will determine which properties will be Excluded
Assets, if more than $3.5 million of property would otherwise be included
under this definition, by a resolution adopted by a majority of the Board
of Directors stating that it has made such designation in accordance with
the Indenture, and the Company is required to deliver to the Trustee such
resolution together with an Officers' Certificate certifying that the
designation complies with the Indenture.
"GAAP" means generally accepted accounting principles,
consistently applied, as of the date of original issuance of the Senior
Notes. All financial and accounting determinations and calculations under
the Indenture will be made in accordance with GAAP.
"Global Note" means a Senior Note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to
in footnote 2 to the form of the Senior Note attached hereto as Exhibit A.
"Guarantors" means, collectively, each of the Guarantor
Subsidiaries and the Parent.
"Guarantor Security Agreement" means each Guarantor
Security Agreement between the Trustee and a certain Guarantor Subsidiary,
dated the date hereof, as the same may be amended in accordance with the
terms thereof and the Indenture and any such security agreements entered
into in the future by the Trustee and any additional guarantors, securing
the Obligations of the Guarantors under this Indenture.
"Guarantor Subsidiary" means each Subsidiary of the
Company that is a party to this Indenture on the date hereof and any other
Subsidiary of the Company that guarantees payment of the Senior Notes by
executing and delivering a Subsidiary Guarantee.
"Hedging Obligations" means, with respect to any Person,
the Obligations of such Persons under (i) interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, (ii)
foreign exchange contracts, currency swap agreements or similar agreements,
and (iii) other agreements or arrangements designed to protect such Person
against fluctuations, or otherwise to establish financial xxxxxx in respect
of, exchange rates, currency rates or interest rates.
"Holder" means a Person in whose name a Senior Note is
registered.
"Holdings" means Motors and Gears Holdings, Inc., a Delaware
corporation and corporate parent of the Parent.
6
"Incentive Arrangements" means any earn-out agreements,
stock appreciation rights, "phantom" stock plans, employment agreements,
non-competition agreements, subscription and stockholders agreements and
other incentive and bonus plans and similar arrangements made in connection
with acquisitions of Persons or businesses by the Parent, the Company or
the Restricted Subsidiaries or the retention of executives, officers or
employees by the Parent, the Company or the Restricted Subsidiaries.
"Indebtedness" means, with respect to any Person, any
indebtedness, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or representing the
deferred and unpaid balance of the purchase price of any property
(including pursuant to capital leases), except any such balance that
constitutes an accrued expense or a trade payable, and any Hedging
Obligations, if and to the extent such indebtedness (other than a Hedging
Obligation) would appear as a liability upon a balance sheet of such Person
prepared on a consolidated basis in accordance with GAAP, and also
includes, to the extent not otherwise included, the guarantee of items that
would be included within this definition; provided, however, that
"Indebtedness" will not include any Incentive Arrangements or obligations
or payments thereunder.
"Indenture" means this Indenture, as amended or
supplemented from time to time.
"Insolvency or Liquidation Proceeding" means (i) any
insolvency or bankruptcy or similar case or proceeding, or any
reorganization, receivership, liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, or (ii) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities of
the Company.
"Intellectual Property Mortgage" means each certain
Copyright, Patent, Trademark and License Mortgage between the Trustee and
each Guarantor Subsidiary, dated the date hereof, as the same may be
amended in accordance with the terms thereof and the Indenture and all
other copyright, patent, trademark and license mortgages and comparable
documents now or at any time hereafter securing the whole or any part of
the Obligations of the Guarantors under this Indenture.
"Intercreditor Agreement" means the intercreditor
agreement among the Trustee, on behalf of the Holders and the
Representative, as agent for the various lenders party to the Credit
Facility, dated the date hereof, including any amended or supplemented
agreement, or any replacement or substitute agreement.
"Investment" means any capital contribution to, or other
debt or equity investment in, any Person.
"Issue" means create, issue, assume, guarantee, incur or
otherwise become directly or indirectly liable for any Indebtedness or
Capital Stock, as applicable; provided, however, that any Indebtedness or
Capital Stock of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be issued by such Restricted Subsidiary at
the time it becomes a Restricted Subsidiary. For this definition, the terms
"issuing," "issuer," "issuance" and "issued" have meanings correlative to
the foregoing.
7
"JI Properties Services Agreement" means the properties
services agreement, dated December 14, 2001, between JI Properties, Inc.,
the Parent, the Company and each of its Subsidiaries and Jordan Industries,
Inc., as in effect on the date of original issuance of the Senior Notes.
"Jordan Agreements" means the JI Properties Services
Agreement, the Subsidiary Advisory Agreement, the Subsidiary Consulting
Agreement and the Tax Sharing Agreement.
"Jordan Stockholders" means Jordan Industries, Inc., The
Jordan Company and Jordan/Zalaznick Capital Corporation and their
respective affiliates, principals, partners and employees, family members
of any of the foregoing and trusts for the benefit of any of the foregoing,
including, without limitation, MCIT PLC and Leucadia National Corporation
and their respective Subsidiaries.
"Junior Seller Notes" means the subordinated promissory
note, dated September 22, 1995, issued by Xxxxxx-Xxxxx Industries, Inc., in
the principal amount of $5.0 million, and maturing on December 31, 2003 and
the subordinated promissory notes, each dated October 27, 1997, issued by
Electrical Design and Control Company, a wholly owned Subsidiary of the
Company, in the aggregate principal amount of $3.85 million, and maturing
on December 31, 2002, each as in effect on the date of original issuance of
the Senior Notes.
"Legal Holiday" means a Saturday, a Sunday or a day on
which banking institutions in the City of New York, the city in which the
principal corporate trust office of the Trustee is located or at a place of
payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment
may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in
respect of such asset, whether or not filed, recorded or otherwise
perfected under applicable law (including any conditional sale or other
title retention agreement, any lease in the nature thereof, any option or
other agreement to sell and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent
statutes) of any jurisdiction).
"Make-Whole Price" means, with respect to the Senior
Notes at any Redemption Date, the amount of the aggregate present value of
the sum of the principal amount of such Senior Note and the amount of
interest (exclusive of interest accrued to the Redemption Date) that would
have been payable in respect of such principal amount if such redemption
had not been made, discounted on a semi-annual bond equivalent basis to the
Redemption Date from the respective dates on which such principal and
interest would have been payable at a per annum interest rate equal to the
sum of the Treasury Yield (determined on the Business Day immediately
preceding the Redemption Date), plus 450 basis points.
8
"Net Income" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP,
excluding, however, any gain or loss, together with any related provision
for taxes, realized in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions).
"Net Proceeds" means, with respect to any Asset Sale, the
aggregate amount of cash proceeds (including any cash received by way of
deferred payment pursuant to a note receivable issued in connection with
such Asset Sale, other than the portion of such deferred payment
constituting interest, and including any amounts received as disbursements
or withdrawals from any escrow or similar account established in connection
with any such Asset Sale, but, in either such case, only as and when so
received) received by the Company or any of its Restricted Subsidiaries in
respect of such Asset Sale, net of: (i) the cash expenses of such Asset
Sale (including, without limitation, the payment of principal of, and
premium, if any, and interest on, Indebtedness required to be paid as a
result of such Asset Sale (other than the Senior Notes) and legal,
accounting, management and advisory and investment banking fees and sales
commissions), (ii) taxes paid or payable as a result thereof, (iii) any
portion of cash proceeds that the Company determines in good faith should
be reserved for post-closing adjustments, it being understood and agreed
that on the day that all such post-closing adjustments have been
determined, the amount (if any) by which the reserved amount in respect of
such Asset Sale exceeds the actual post-closing adjustments payable by the
Company or any of its Restricted Subsidiaries shall constitute Net Proceeds
on such date, (iv) any relocation expenses and pension, severance and
shutdown costs incurred as a result thereof, and (v) any deduction or
appropriate amounts to be provided by the Company or any of its Restricted
Subsidiaries as a reserve in accordance with GAAP against any liabilities
associated with the asset disposed of in such transaction and retained by
the Company or such Restricted Subsidiary after such sale or other
disposition thereof, including, without limitation, pension and other
post-employment benefit liabilities and liabilities related to
environmental matters or against any indemnification obligations associated
with such transaction.
"Non-Restricted Subsidiary" means any Subsidiary of the
Company other than a Restricted Subsidiary.
"Obligations" means, with respect to any Indebtedness,
all principal, interest, premiums, penalties, fees, indemnities, expenses
(including legal fees and expenses), reimbursement obligations and other
liabilities payable to the holder of such Indebtedness under the
documentation governing such Indebtedness, and any other claims of such
holder arising in respect of such Indebtedness.
"Offering" means the offer and sale of the Senior Notes
as contemplated by the Offering Circular.
"Offering Circular" means the Offering Circular, dated
April 11, 2002, relating to the Company's offering and placement of the
Senior Notes.
"Officer" means, with respect to any Person, the Chairman
of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, any
Assistant Treasurer, the Controller, the Secretary or any Vice-President of
such Person.
9
"Officer's Certificate" means a certificate signed on
behalf of the Company by two Officers of the Company, one of whom must be
the principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Company, that meets
the requirements of Section 11.04 hereof.
"Opinion of Counsel" means an opinion from legal counsel
who is reasonably acceptable to the Trustee, that meets the requirements of
Section 11.05 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
"Other Permitted Indebtedness" means: (i) Indebtedness of
the Parent, the Company and the Restricted Subsidiaries existing as of the
date of original issuance of the Series D Senior Notes; (ii) Indebtedness
of the Parent, the Company and the Restricted Subsidiaries in respect of
bankers acceptances and letters of credit (including, without limitation,
letters of credit in respect of workers' compensation claims) issued in the
ordinary course of business, or other Indebtedness in respect to
reimbursement-type obligations regarding workers' compensation claims;
(iii) Refinancing Indebtedness, provided that: (A) the principal amount of
such Refinancing Indebtedness shall not exceed the outstanding principal
amount of Indebtedness (including unused commitments) extended, refinanced,
renewed, replaced, substituted or refunded plus any amounts incurred to pay
premiums, fees and expenses in connection therewith, (B) the Refinancing
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness
being extended, refinanced, renewed, replaced, substituted or refunded;
provided, however, that this limitation in this clause (B) does not apply
to Refinancing Indebtedness of Senior Indebtedness, and (C) in the case of
Refinancing Indebtedness of Subordinated Indebtedness, such Refinancing
Indebtedness shall be subordinated to the Senior Notes at least to the same
extent as the Subordinated Indebtedness being extended, refinanced,
renewed, replaced, substituted or refunded; (iv) intercompany Indebtedness
of and among the Company, the Parent and the Restricted Subsidiaries
(excluding guarantees by Restricted Subsidiaries of Indebtedness of the
Company not issued in compliance with Section 4.15; (v) Indebtedness of the
Parent, the Company and the Restricted Subsidiaries incurred in connection
with making permitted Restricted Payments under clauses (iii) or (iv), but
only to the extent that such Indebtedness is provided by the Parent, the
Company or a Restricted Subsidiary, or (x) of Section 4.05(b); (vi)
Indebtedness of any Non-Restricted Subsidiary created after the date of
original issuance of the Series D Senior Notes, provided that such
Indebtedness is nonrecourse to the Company and its Restricted Subsidiaries
and the Company and its Restricted Subsidiaries have no Obligations with
respect to such Indebtedness; (vii) Indebtedness of the Parent, the Company
and the Restricted Subsidiaries under Hedging Obligations; (viii)
Indebtedness of the Parent, the Company and the Restricted Subsidiaries
arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently (except in the case of
daylight overdrafts, which will not be, and will not be deemed to be,
inadvertent) drawn against insufficient funds in the ordinary course of
business; (ix) Indebtedness of any Person at the time it is acquired as a
Restricted Subsidiary, provided that such Indebtedness was not issued by
such Person in connection with or in anticipation of such acquisition; (x)
guarantees by Restricted Subsidiaries of Indebtedness of any Restricted
Subsidiary if such Indebtedness so guaranteed is permitted under the
10
Indenture; (xi) guarantees by a Restricted Subsidiary or the Parent of
Indebtedness of the Company if the Indebtedness so guaranteed is permitted
under the Indenture and the Senior Notes are guaranteed by such Restricted
Subsidiary to the extent required by Section 4.15; (xii) guarantees by the
Parent or the Company of Indebtedness of any Restricted Subsidiary if the
Indebtedness so guaranteed is permitted under the Indenture; (xiii)
Indebtedness of the Parent, the Company and the Restricted Subsidiaries in
connection with performance, surety, statutory, appeal or similar bonds in
the ordinary course of business; (xiv) Indebtedness of the Parent, the
Company and the Restricted Subsidiaries in connection with agreements
providing for indemnification, purchase price adjustments and similar
obligations in connection with the sale or disposition of any of their
business, properties or assets; and (xv) Indebtedness of the Restricted
Subsidiaries in respect of the Junior Seller Notes.
"Parent" means Kinetek, Inc., a Delaware corporation and
corporate parent of the Company, and a guarantor of the Senior Notes.
"Parent Guarantee" means the guarantee by the Parent of
the obligations of the Company under the Senior Notes and this Indenture.
"Permitted Liens" means:
(a) with respect to the Parent, the Company and its Restricted
Subsidiaries, (i) Liens for taxes, assessments, governmental charges or
claims which are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted and if a 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's, mechanics', suppliers', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and with respect to amounts not yet delinquent or being contested in good
faith by appropriate proceedings, if a reserve or other appropriate
provision, if-any as shall be required in conformity with GAAP shall have
been made therefor; (iii) Liens incurred on deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security; (iv) Liens incurred on
deposits made to secure the performance of tenders, bids, leases, statutory
obligations, surety and appeal bonds, government contracts, performance and
return of money bonds and other obligations of a like nature incurred in
the ordinary course of business (exclusive of obligations for the payment
of borrowed money); (v) easements, rights-of-way, zoning or other
restrictions, minor defects or irregularities in title and other similar
charges or encumbrances not interfering in any material respect with the
business of the Company or any of its Restricted Subsidiaries incurred in
the ordinary course of business; (vi) Liens (including extensions, renewals
and replacements thereof) upon property acquired (the "Acquired Property")
after the date of original issuance of the Series D Senior Notes, provided
that: (A) any such Lien is created solely for the purpose of securing
Indebtedness representing, or issued to finance, refinance or refund, the
cost (including the cost of construction) of the Acquired Property, (B) the
principal amount of the Indebtedness secured by such Lien does not exceed
100% of the cost of the Acquired Property, (C) such Lien does not extend to
or cover any property other than the Acquired Property and any improvements
on such Acquired Property, and (D) the issuance of the Indebtedness to
purchase the Acquired Property is permitted by Section 4.07; (vii) 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
11
goods; (viii) judgment and attachment Liens not giving rise to an Event of
Default; (ix) leases or subleases granted to others not interfering in any
material respect with the business of the Company or any of its Restricted
Subsidiaries; (x) Liens securing Indebtedness under Hedging Obligations;
(xi) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements; (xii) Liens
arising out of consignment or similar arrangements for the sale of goods
entered into by the Company or its Restricted Subsidiaries in the ordinary
course of business; (xiii) any interest or title of a lessor in property
subject to any capital lease obligation or operating lease; (xiv) Liens
arising from filing Uniform Commercial Code financing statements regarding
leases; (xv) Liens existing on the date of original issuance of the Series
D Senior Notes and any extensions, refinancings, renewals, replacements,
substitutions or refundings thereof; (xvi) any Lien granted to the Trustee
and any substantially equivalent Lien granted to any trustee or similar
institution under any indenture for Senior Indebtedness permitted by the
terms of the Indenture; and (xvii) additional Liens at any one time
outstanding in respect of properties or assets where aggregate fair market
value does not exceed $10,000,000 (the fair market value to be determined
on the date such Lien is granted on such properties or assets);
(b) with respect to the Restricted Subsidiaries, (i) Liens
securing Restricted Subsidiaries' 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; (ii) Liens
securing Indebtedness issued by Restricted Subsidiaries if such
Indebtedness is (A) under the Credit Facility, or (B) permitted by Section
4.07(a), clauses (i), (ii), (iii) or (iv) of Section 4.07(b), or clauses
(i), (iii) (to the extent the Indebtedness subject to such Refinancing
Indebtedness was subject to Liens), (vi), (vii), (ix), (x) or (xvi) of the
definition of Other Permitted Indebtedness; (iii) Liens securing
intercompany Indebtedness issued by any Restricted Subsidiary to the
Company or another Restricted Subsidiary; and (iv) Liens securing
guarantees by Restricted Subsidiaries of Indebtedness issued by the Company
if such guarantees permitted by clause (xi) (but only in respect of the
property, rights and assets of the Restricted Subsidiaries issuing such
guarantees) of the definition of Other Permitted Indebtedness;
(c) with respect to the Parent or the Company, (i) Liens
securing Indebtedness issued by the Parent or the Company if such
Indebtedness is (A) under the Credit Facility, or (B) if such Indebtedness
is permitted by Section 4.07 (including, but not limited to, Indebtedness
issued by the Company under the Credit Facility pursuant to clause (i)
and/or clause (iv) of Section 4.07(b)); (ii) Liens securing Indebtedness of
the Parent or the Company if such Indebtedness is permitted by clauses (i),
(iii) (to the extent the Indebtedness subject to such Refinancing
Indebtedness was subject to Liens) or (vii) of the definition of Other
Permitted Indebtedness; (iii) Liens securing guarantees by the Parent or
the Company of Indebtedness issued by Restricted Subsidiaries if such
Indebtedness is permitted by Section 4.07 (including, but not limited to,
Indebtedness issued by Restricted Subsidiaries under the Credit Facility
pursuant to clause (i) and/or clause (iv) of Section 4.07(b)) and if such
guarantees are permitted by clause (xii) (but only in respect of
Indebtedness issued by the Restricted Subsidiaries under the Credit
Facility pursuant to Section 4.07) of the definition of Other Permitted
Indebtedness; and (iv) Liens securing the Parent's or the Company's
reimbursement obligations with respect to letters of credit that encumber
documents and other property relating to such letters of credit and the
12
products and proceeds thereof provided, however, that, notwithstanding any
of the foregoing, the Permitted Liens referred to in clause (c) of this
definition shall not include any Lien on Capital Stock of Restricted
Subsidiaries held directly by the Company or the Parent (as distinguished
from Liens on Capital Stock of Restricted Subsidiaries held by other
Restricted Subsidiaries) other than Liens securing (A) Indebtedness of the
Company issued under the Credit Facility pursuant to Section 4.07 and any
permitted Refinancing Indebtedness of such Indebtedness, and (B) guarantees
by the Company or the Parent of Indebtedness issued by Restricted
Subsidiaries under the Credit Facility pursuant to Section 4.07 and any
permitted Refinancing Indebtedness of such Indebtedness.
"Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Pledge Agreement" means those certain Pledge Agreements
between the Trustee and each of the Company, the Parent, Advanced D.C.
Holdings, Inc., The Imperial Electric Company and Motion Holdings, Inc.,
each dated the date hereof, as the same may be amended in accordance with
the terms thereof and the Indenture and all other pledge agreements and
comparable documents now or at any time hereafter securing the whole or any
part of the Obligations of the Guarantors under this Indenture.
"Pro Forma Basis" means, for purposes of determining
Consolidated Net Income in connection with the Cash Flow Coverage Ratio
(including in connection with Section 4.05, Section 4.16, Section 5.01, the
incurrence of Indebtedness pursuant to Section 4.07(a) and Consolidated Net
Worth for purposes of Section 5.01, giving pro forma effect to (x) any
acquisition or sale of a Person, business or asset, related incurrence,
repayment or refinancing of Indebtedness or other related transactions,
including any Restructuring Charges which would otherwise be accounted for
as an adjustment permitted by Regulation S-X under the Securities Act or on
a pro forma basis under GAAP, or (y) any incurrence, repayment or
refinancing of any Indebtedness and the application of the proceeds
therefrom, in each case, as if such acquisition or sale and related
transactions, restructurings, consolidations, cost savings, reductions,
incurrence, repayment or refinancing were realized on the first day of the
relevant period permitted by Regulation S-X under the Securities Act or on
a pro forma basis under GAAP. Furthermore, in calculating the Cash Flow
Coverage Ratio, (1) interest on outstanding Indebtedness determined on a
fluctuating basis as of the determination date and which will continue to
be so determined thereafter shall be deemed to have accrued at a fixed rate
per annum equal to the rate of interest on such Indebtedness in effect on
the determination date; (2) if interest on any Indebtedness actually
incurred on the determination date may optionally be determined at an
interest rate based upon a factor of a prime or similar rate, a
eurocurrency interbank offered rate, or other rates, then the interest rate
in effect on the determination date will be deemed to have been in effect
during the relevant period; and (3) notwithstanding clause (1) above,
interest on Indebtedness determined on a fluctuating basis, to the extent
such interest is covered by agreements relating to interest rate swaps or
similar interest rate protection Hedging Obligations, shall be deemed to
accrue at the rate per annum resulting after giving effect to the operation
of such agreements.
13
"Real Property Mortgage" means those certain Real Property
Mortgages between the Trustee and Advanced D.C. Motors, Inc., Gear
Research, Inc. and The Imperial Electric Company, each dated the date
hereof, as the same may be amended in accordance with the terms thereof and
this Indenture.
"Receivables" means, with respect to any Person, all of
the following property and interests in property of such Person, whether
now existing or existing in the future or hereafter acquired or arising:
(i) accounts, (ii) accounts receivable (including, without limitation, all
rights to payment created by or arising from sales of goods, leases of
goods or leased or the rendition of services rendered no matter how
evidenced, whether or not earned by performance), (iii) all unpaid seller's
or lessor's rights (including, without limitation, recession, replevin,
reclamation and stoppage in transit, relating to any of the foregoing or
arising therefrom), (iv) all rights to any goods or merchandise represented
by any of the foregoing (including, without limitation, returned or
repossessed goods), (v) all reserves and credit balances with respect to
any such accounts receivable or account debtors, (vi) all letters of
credit, security or guarantees of any of the foregoing, (vii) all insurance
policies or reports relating to any of the foregoing, (viii) all collection
or deposit accounts relating to any of the foregoing, (ix) all proceeds of
any of the foregoing, and (x) all books and records relating to any of the
foregoing.
"Receivables Financing" means (i) the sale, factoring or
other disposition of Receivables that arise in the ordinary course of
business, or (ii) the sale, factoring or other disposition of Receivables
that arise in the ordinary course of business to a Receivables Subsidiary
followed by a financing transaction in connection with such sale or
disposition of such Receivables.
"Receivables Subsidiary" means any Subsidiary of the
Company or any other corporation trust or entity that is exclusively
engaged in Receivables Financings and activities reasonably related
thereto.
"Redeemable Preferred Stock" means preferred stock that
by its terms or otherwise is required to be redeemed or is redeemable at
the option of the holder thereof on, or prior to, the maturity date of the
Senior Notes.
"Refinancing Indebtedness" means (i) Indebtedness of the
Parent, the Company and the Restricted Subsidiaries issued or given in
exchange for, or the proceeds of which are used to, extend, refinance,
renew, replace, substitute or refund any Indebtedness permitted under this
Indenture or any Indebtedness issued to so extend, refinance, renew,
replace, substitute or refund such Indebtedness, (ii) any refinancings of
Indebtedness issued under the Credit Facility, and (iii) any additional
Indebtedness issued to pay premiums and fees in connection with clauses (i)
and (ii).
"Representative" means the agent or other representative
in respect of the Credit Facility, with the Representative originally being
Fleet Capital Corporation.
"Restricted Investment" means Investment in any Person,
provided that Restricted Investments will not include: (i) Investments in
marketable securities and other negotiable instruments permitted by this
Indenture; (ii) any Incentive Arrangements; (iii) Investments in the Parent
or the Company; or (iv) Investments in any Restricted Subsidiary (provided
that any Investment in a Restricted Subsidiary was made for fair market
value (as determined by the Board of Directors in good faith)). The amount
of any Restricted Investment shall be the amount of cash and the fair
14
market value at the time of transfer of all other property (as determined
by the Board of Directors in good faith) initially invested or paid for
such Restricted Investment, plus all additions thereto, without any
adjustments for increases or decreases in value of or write-ups,
write-downs or write-offs with respect to, such Restricted Investment.
"Restricted Subsidiary" means: (i) any Subsidiary of the
Company existing on the date of issuance of the Senior Notes, and (ii) any
other Subsidiary of the Company formed, acquired or existing after the date
of issuance of the Senior Notes that is designated as a "Restricted
Subsidiary" by the Company pursuant to a resolution approved a majority of
the Board of Directors, provided, however, that the term Restricted
Subsidiary shall not include any Subsidiary of the Company that has been
redesignated by the Company pursuant to a resolution approved by a majority
of the Board of Directors as a Non-Restricted Subsidiary in accordance with
Section 4.16 unless such Subsidiary shall have subsequently been
redesignated a Restricted Subsidiary in accordance with clause (ii) of this
definition.
"Restructuring Charges" means any charges or expenses in
respect of restructuring or consolidating any business, operations or
facilities, any compensation or headcount reduction, or any other cost
savings, of any Persons or businesses either alone or together with the
Company or any Restricted Subsidiary, as permitted by GAAP or Regulation
S-X under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended.
"Security Agreement" means that certain Security
Agreement among the Trustee, the Company, the Parent and the Guarantor
Subsidiaries, dated the date hereof, as the same may be amended in
accordance with the terms thereof and this Indenture.
"Security Documents" means, collectively, the Security
Agreement, Pledge Agreements, Guarantor Security Agreements, Intellectual
Property Mortgages and Real Property Mortgages.
"Senior Indebtedness" means: (i) all Obligations
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable
law) on any Indebtedness of the Company, whether outstanding on the date of
original issuance of the Senior Notes or thereafter created, incurred or
assumed, of the following types: (A) all Indebtedness of the Company
(including without limitation the Senior Notes) for money borrowed, and (B)
all Indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which the Company is responsible or liable;
(ii) all capitalized lease obligations of the Company; (iii) all
Obligations of the Company: (A) for the reimbursement of any obligor on any
letter of credit, banker's acceptance or similar credit transaction, (B)
all constituting Hedging Obligations, or (C) issued as the deferred
purchase price of property and all conditional sale Obligations of the
Company and all Obligations of the Company under any title retention
agreement; (iv) all guarantees of the Company with respect to Obligations
of other Persons of the type referred to in clauses (ii) and (iii) and with
respect to the payment of dividends of other Persons; and (v) all
15
Obligations of the Company consisting of modifications, renewals,
extensions, replacements and refundings of any Obligations described in
clauses (i), (ii), (iii) or (iv) unless, in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
expressly provided that such Obligations are subordinated or junior in
right of payment to the Senior Notes; provided, however, that Senior
Indebtedness shall not be deemed to include: (1) any Obligation of the
Company to any Subsidiary, (2) any liability for federal, state, local or
other taxes owed or owing by the Company, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such liabilities),
(4) any Indebtedness, guarantee or Obligation of the Company that is
contractually subordinated or junior in any respect to any other
Indebtedness, guarantee or Obligation of the Company, or (5) any
Indebtedness to the extent the same is incurred in violation of the
Indenture. Senior Indebtedness shall include all Obligations in respect of
the Senior Notes and this Indenture and the Series D Senior Notes and. the
Series D Indenture.
To the extent any payment on the Senior Notes, whether by
or on behalf of the Company, as proceeds of security or enforcement of any
right of setoff or otherwise, is declared to be fraudulent or preferential,
set aside or required to be paid to a trustee, receiver or other similar
party under any bankruptcy, insolvency, receivership or similar law, then
if such payment is recovered by, or paid over to, such trustee, receiver or
other similar party, the Senior Notes or part thereof originally intended
to be satisfied by such payment shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
"Senior Notes" means the 5% Senior Notes due 2007 of the
Company.
"Series D Indenture" means the Indenture dated as of
December 17, 1997, as amended and supplemented, between the Parent and
State Street Bank and Trust Company as Trustee, providing for the issuance
of the Series D Senior Notes in the aggregate principal amount of
$270,000,000, as such may be amended and supplemented from time to time.
"Series D Senior Notes" means the 10.75% Senior Notes due
2006 of the Parent issued pursuant to the Series D Indenture.
"SFAS 106" means Statement of Financial Accounting Standards
No. 106.
"SFAS 109" means Statement of Financial Accounting Standards
No. 109.
"Significant Subsidiary" means any Restricted Subsidiary
of the Company that would be a "significant subsidiary" as defined in
clause (2) of the definition of such term in Rule 1-02 of Regulation S-X
under the Securities Act and the Exchange Act.
"Subordinated Indebtedness" means all Obligations of the
type referred to in clauses (i) through (v) of the definition of Senior
Indebtedness, if the instrument creating or evidencing the same, or
pursuant to which the same is outstanding, designates such Obligations as
subordinated or junior in right of payment to Senior Indebtedness.
16
"Subsidiary" of any Person means any entity of which the
Equity Interests entitled to cast at least a majority of the votes that may
be cast by all Equity Interests having ordinary voting power for the
election of directors or other governing body of such entity are owned by
such Person (regardless of whether such Equity Interests are owned directly
by such Person or through one or more Subsidiaries).
"Subsidiary Advisory Agreement" means the advisory
agreement, dated as of December 14, 2001, between the Company and each of
its Subsidiaries and Jordan Industries, Inc., as in effect on the date of
original issuance of the Senior Notes.
"Subsidiary Consulting Agreement" means the management
consulting agreement, dated as of December 14, 2001, between the Company
and each of its Subsidiaries and Jordan Industries, Inc., as in effect on
the date of original issuance of the Senior Notes.
"Subsidiary Guarantee" means the guarantee by each of the
Guarantor Subsidiaries of the obligations of the Company under the Senior
Notes and this Indenture.
"Tax Sharing Agreement" means the Agreement to Join in
the Filing of Consolidated Income Tax Returns, dated as of December 14,
2001, between the Company and each of its Subsidiaries and Jordan
Industries, Inc., as in effect on the date of original issuance of the
Senior Notes.
"Transfer Restricted Senior Notes" means securities that
bear or are required to bear the legend set forth in Section 2.06.
"Treasury Yield" means the yield to maturity at the time
of computation of United States Treasury securities with a constant
maturity (as complied by and published in the most recent Federal Reserve
Statistical Release H.15 (519) which has become publicly available at least
two Business Days prior to the date fixed for redemption (or, if such
Statistical Release is no longer published, any publicly available source
of similar data)) most nearly equal to the then remaining Average Life of
the Senior Notes; provided, that if the Average Life of the Senior Notes is
not equal to the constant maturity of a United States Treasury security for
which a weekly average yield is given, the Treasury Yield shall be obtained
by linear interpolation (calculated to the nearest one-twelfth of a year)
from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Average Life of the Senior
Notes is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one
year shall be used.
"Trustee" means U.S. Bank National Association until a
successor replaces it in accordance with the applicable provisions of this
Indenture, and thereafter means the successor.
17
"Voting Stock" means any class or classes of Capital
Stock pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect the board of directors.
"Weighted Average Life to Maturity" means, when applied
to any Indebtedness at any date, the number of years obtained by dividing
(i) the then outstanding principal amount of such Indebtedness into (ii)
the sum of the product(s) obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other
requirement payment of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) which will elapse between such date and the making of such
payment.
SECTION 1.02 OTHER DEFINITIONS
Defined in
Term Section
"Affiliate Transaction"....................................... 4.08
"Asset Sale Disposition Date"................................. 4.14
"Asset Sale Trigger Date"..................................... 4.14
"Change of Control Trigger Date".............................. 4.13
"covenant defeasance option".................................. 8.01
"Disposition"................................................. 5.01(a)
"Parent Disposition".......................................... 5.01(b)
"DTC"......................................................... 2.03
"Event of Default"............................................ 6.01
"Excess Proceeds"............................................. 4.14
"legal defeasance option"..................................... 8.01
"Notice of Default"........................................... 6.01
"Offer"....................................................... 3.08
"Other Indebtedness".......................................... 4.15
"Other Indebtedness Guarantee"................................ 4.15
"Paying Agent"................................................ 2.03
"Purchase Date"............................................... 3.08
"Registrar"................................................... 2.03
"Restricted Payments"......................................... 4.05
"Successor Corporation"....................................... 5.01
"Trustee Expenses"............................................ 6.08
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in, and made a part of, this
Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined
by SEC rule under the TIA have the meanings so assigned to them therein.
18
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has
the meaning assigned to it under GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2.
NOTES
SECTION 2.01 PRINCIPAL AMOUNT, FORM AND DATING.
(a) Principal Amount
The aggregate principal amount of Senior Notes which may
be issued, executed, authenticated and outstanding under this Indenture is
$15,000,000.
(b) Form and Dating
The Senior Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is
part of this Indenture. The Senior Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each Senior
Note shall be dated the date of its authentication. The Senior Notes shall
be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Senior Notes
shall constitute, and are hereby expressly made, a part of this Indenture
and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Each Global Note shall represent such of the outstanding
Senior Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Senior Notes from time
to time endorsed thereon and that the aggregate amount of outstanding
Senior Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges and redemptions. Any
endorsement of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Senior Notes represented thereby
shall be made by the Trustee in accordance with instructions given by the
Holder thereof as required by Section 2.06.
SECTION 2.02 EXECUTION AND AUTHENTICATION.
One Officer shall sign the Senior Notes for the Company
by manual or facsimile signature. The Company's seal shall be reproduced on
the Senior Notes and may be in facsimile form.
19
If an Officer whose signature is on a Senior Note no
longer holds that office at the time a Senior Note is authenticated, the
Senior Note shall nevertheless be valid.
A Senior Note shall not be valid until authenticated by
the manual signature of an authorized signatory of the Trustee, and the
Trustee's signature shall be conclusive evidence that the Senior Note has
been authenticated under this Indenture. The form of Trustee's certificate
of authentication to be borne by the Senior Notes shall be substantially as
set forth in Exhibit A.
The Trustee shall, upon a written order of the Company
signed by two Officers directing the Trustee to authenticate the Senior
Notes and certifying that all conditions precedent to the issuance of the
Senior Notes contained herein have been complied with, authenticate Senior
Notes for original issuance up to an aggregate principal amount stated in
paragraph 4 of the Senior Notes (the aggregate principal amount of
outstanding Senior Notes may not exceed that amount at any time, except as
provided in Section 2.07).
The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate Senior Notes. Unless limited by
the terms of such appointment, an authenticating agent may authenticate
Senior 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.
SECTION 2.03 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (the
"Registrar") where Senior Notes may be presented for registration of
transfer or for exchange and an office or agency (the "Paying Agent") where
Senior Notes may be presented for payment. The Registrar shall keep a
register of the Senior Notes and of their transfer and exchange. The
Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar, and the term
"Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar without prior notice to any Holder. The
Company shall notify in writing the Trustee and the Trustee shall notify
the Holders in writing of the name and address of any Agent not a party to
this Indenture. If the Company fails to appoint or maintain another entity
as Registrar or Paying Agent, the Trustee shall act as such. The Company
shall enter into an appropriate agency agreement with any Agent not a party
to this Indenture, and such agreement shall incorporate the TIA's
provisions and implement the provisions of this Indenture that relate to
such Agent.
The Company initially appoints The Depository Trust
Company ("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee as Registrar,
Paying Agent and agent for service of notices and demands in connection
with the Senior Notes and as note custodian with respect to the Global
Notes. The Company or any of its Subsidiaries may act as Paying Agent,
Registrar or co-registrar. If the Company fails to appoint or maintain a
Registrar and Paying Agent, the Trustee shall act as such, and shall be
entitled to appropriate compensation in accordance with Section 7.07.
20
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than
the Trustee to agree in writing that the Paying Agent will hold in trust
for the Holders' benefit or the Trustee all money the Paying Agent holds
for redemption or purchase of the Senior Notes or for the payment of
principal of, or premium, if any, or interest on, the Senior Notes, and
will promptly notify the Trustee of any Default by the Company in providing
the Paying Agent with sufficient funds to (i) purchase Senior Notes
tendered pursuant to an Offer arising under Section 4.13, (ii) redeem
Senior Notes called for redemption, or (iii) make any payment of principal,
premium or interest due on the Senior Notes. While any such Default
continues, the Trustee may require the Paying Agent to pay all money it
holds to the Trustee and to account for any funds disbursed. The Company at
any time may require the Paying Agent to pay all money it holds to the
Trustee and to account for any funds disbursed. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or any of its
Subsidiaries) shall have no further liability for the money it delivered to
the Trustee. If the Company or any of its Subsidiaries acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the
Holders' benefit or the Trustee all money it holds as Paying Agent.
SECTION 2.05 HOLDER LISTS.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names
and addresses of all Holders and shall otherwise comply with TIA ss.312(a).
If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and
at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require that sets
forth the names and addresses of, and the aggregate principal amount of
Senior Notes held by, each Holder, and the Company shall otherwise comply
with Section 312(a) of the TIA.
SECTION 2.06 TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) 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 exchange as requested
if its requirements for such transactions are met; provided, however, that
the Definitive Notes presented or surrendered for register of transfer or
exchange:
(i) shall be duly endorsed or accompanied by a
written instruction of transfer in form
satisfactory to the Registrar duly executed by
such Holder or by his attorney, duly authorized
in writing; and
21
(ii) in the case of a Definitive Note that is a
Transfer Restricted Senior Note, such request
shall be accompanied by the following additional
information and documents, as applicable:
(1) if such Transfer Restricted Senior Note
is being delivered to the Registrar by
a Holder for registration in the name
of such Holder, without transfer, a
certification to that effect from such
Holder (in substantially the form of
Exhibit B hereto); or
(2) if such Transfer Restricted Senior
Note is being transferred (1) to a
"qualified institutional buyer" (as
defined in Rule 144A under the
Securities Act) in accordance with Rule
144A under the Securities Act or (2)
pursuant to an exemption from
registration in accordance with Rule
144 under the Securities Act (and based
on an opinion of counsel if the Company
so 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);
(3) if such Transfer Restricted Senior
Note is being transferred to an
institutional "accredited investor,"
within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities
Act pursuant to a private placement
exemption from the registration
requirements of the Securities Act (and
based on an opinion of counsel if the
Company so requests), a certification
to that effect from such Holder (in
substantially the form of Exhibit B
hereto) and a certification from the
applicable transferee (in substantially
the form of Exhibit C hereto); or
(4) if such Transfer Restricted Senior Note
is being transferred in reliance on
another exemption from the registration
requirements of the Securities Act (and
based on an opinion of counsel if the
Company so requests), a certification
to that effect from such Holder (in
substantially the form of Exhibit B
hereto).
(b) Transfer of a Definitive 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 appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
22
(i) if such Definitive Note is a Transfer Restricted
Senior Note, a certification from the Holder
thereof (in substantially the form of Exhibit B
hereto) to the effect that such Definitive Note
is being transferred by such Holder to a
"qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities
Act; and
(ii) whether or not such Definitive Note is a
Transfer Restricted Senior Note, written
instructions from the Holder thereof directing
the Trustee to make an endorsement on the Global
Note to reflect an increase in the aggregate
principal amount of the Senior Notes represented
by the Global Note,
the Trustee shall cancel such Definitive Note in accordance with Section
2.11 and cause, in accordance with the standing instructions and procedures
existing between the Depository and the Trustee, the aggregate principal
amount of Senior 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, the Trustee shall authenticate a new Global Note in the
appropriate principal amount.
(c) 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.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) 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
Senior Note, the following additional
information and documents (all of which may be
submitted by facsimile):
(1) if such beneficial interest is being
transferred to the Person designated by
the Depository as being the beneficial
owner, a certification to that effect
from such Person (in substantially the
form of Exhibit B hereto); or
(2) if such beneficial interest is being
transferred (1) to a "qualified
institutional buyer" (as defined in
Rule 144A under the Securities Act) in
accordance with Rule 144A under the
Securities Act or (2) pursuant to an
exemption from registration in
accordance with Rule 144 under the
Securities Act (and based on an opinion
of counsel if the Company so 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
23
(3) if such beneficial interest is being
transferred to an institutional
"accredited investor," within the
meaning of Rule 501(a)(1), (2), (3) or
(7) under the Securities Act pursuant
to a private placement exemption from
the registration requirements of the
Securities Act (and based on an opinion
of counsel if the Company so requests),
a certification to that effect from
such Holder (in substantially the form
of Exhibit B hereto) and a
certification from the applicable
transferee (in substantially the form
of Exhibit C hereto); or
(4) if such beneficial interest is being
transferred in reliance on another
exemption from the registration
requirements of the Securities Act (and
based on an opinion of counsel if the
Company so requests), a certification
to that effect from such Holder (in
substantially the form of Exhibit B
hereto),
the Trustee shall, in accordance with the standing instructions and
procedures existing between the Depository and the Trustee, 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.
(ii) Definitive Notes issued in exchange for a
beneficial interest in a Global Note pursuant to
this Section 2.06(d) 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 in accordance with the
standard procedures of the Depository such
Definitive Notes to the Persons in whose names
such Senior Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.06), a Global Note
may not be transferred as a whole except by the Depository to a nominee of
the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee
to a successor Depository or a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of Depository.
If at any time:
(i) the Depository for the Senior Notes notifies the
Company that the Depository is unwilling or
unable to continue 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
(ii) The Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause
the issuance of Definitive Notes under this
Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02, 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.
24
(g) Legends.
(i) Except for any Transfer Restricted Senior Note
sold or transferred (including any Transfer
Restricted Senior Note represented by a Global
Note) as described in (ii) below, each Senior
Note certificate evidencing Global Notes and
Definitive Notes (and all Senior Notes issued in
exchange therefor or substitution thereof) shall
bear legends in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE
UNITED STATES TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO
A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE.
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE
DISCOUNT UNDER SECTIONS 1272, 1273 AND 1275 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
25
YOU MAY CONTACT XXXXXX XXXXX, THE CHIEF
FINANCIAL OFFICER OF THE ISSUER, AT OUR
EXECUTIVE OFFICES AT ARBORLAKE CENTRE, SUITE
550, 0000 XXXX XXXX XXXX, XXXXXXXXX, XXXXXXXX
00000, (000) 000-0000, WHO WILL PROVIDE YOU WITH
ANY REQUIRED INFORMATION REGARDING THE ORIGINAL
ISSUE DISCOUNT."
(ii) Upon any sale or transfer of a Transfer
Restricted Senior Note (including any Transfer
Restricted Senior Note represented by a Global
Note) pursuant to an effective registration
statement under the Securities Act, pursuant to
Rule 144 under the Securities Act or pursuant to
an opinion of counsel reasonably satisfactory to
the Company and the Registrar that no legend is
required:
(1) in the case of any Transfer Restricted
Senior Note that is a Definitive Note,
the Registrar shall permit the Holder
thereof to exchange such Transfer
Restricted Senior Note for a Definitive
Note that does not bear the legend set
forth in (i) above and rescind any
restriction on the transfer of such
Transfer Restricted Senior Note; and
(2) in the case of any Transfer Restricted
Senior Note represented by a Global
Note, such Transfer Restricted Senior
Note shall not be required to bear the
legend set forth in (i) 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 Senior Note
shall continue to be subject to the
provisions of Section 2.06(c);
provided, however, that with respect to
any request for an exchange of a
Transfer Restricted Senior Note that is
represented by a Global Note for a
Definitive Note that does not bear the
legend set forth in (i) above, which
request is made in reliance upon Rule
144, the Holder thereof shall certify
in writing to the Registrar that such
request is being made pursuant to Rule
144 (such certification to be
substantially in the form of Exhibit B
hereto).
(h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or canceled, all Global Notes shall
be returned to or retained and canceled by the Trustee in accordance with
Section 2.11. 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 Senior Notes represented
by such Global Note shall be reduced accordingly and an endorsement shall
be made on such Global Note, by the Trustee, to reflect such reduction.
26
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the
Trustee shall authenticate Definitive Notes and
Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for
any registration of transfer or exchange, but
the Company may require payment of a sum
sufficient to cover any transfer tax or similar
governmental charge payable in connection
therewith (other than any such transfer taxes or
similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07,
4.13, 4.14 and 9.05).
(iii) Neither the Company nor the Registrar shall be
required to register the transfer of or exchange
any Senior Note selected for redemption in whole
or in part, except the unredeemed portion of any
Senior Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued
upon any registration of transfer or exchange of
Definitive Notes or Global Notes in accordance
with this Indenture (including any increase in
the aggregate principal amount of the Senior
Notes represented by the Global Note pursuant to
subsection (b) above) shall be the valid
obligations of the Company, evidencing the same
debt, and entitled to the same benefits under
this Indenture, as the Definitive Notes or
Global Notes surrendered upon such registration
of transfer or exchange.
(v) Company shall not be required to issue Senior
Notes and the Registrar shall not be required to
register the transfer of or to exchange Senior
Notes during a period beginning at the opening
of business 15 days before the day of any
selection of Senior Notes for redemption under
Section 3.02 and ending at the close of business
on the day of selection, or to register the
transfer of or to exchange a Senior Note between
a record date and the next succeeding interest
payment date.
(vi) Prior to due presentment for the registration of
a transfer of any Senior Note, the Trustee, any
Agent and the Company may deem and treat the
Person in whose name any Senior Note is
registered as the absolute owner of such Senior
Note for the purpose of receiving payment of
principal of, premium, if any, accrued and
unpaid interest, on such Senior Notes, and
neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes
and Global Notes in accordance with the
provisions of Section 2.02.
27
SECTION 2.07 REPLACEMENT SENIOR NOTES.
If any mutilated Senior Note is surrendered to the
Trustee, or the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Senior Note, the
Company shall issue and the Trustee, upon the Company's written order
signed by two Officers, shall authenticate a replacement Senior Note if the
Trustee's requirements are met. If the Trustee or the Company requires it,
the Holder must supply an indemnity bond that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any
Agent or any authenticating agent from any loss that any of them may suffer
if a Senior Note is replaced. The Company and the Trustee may charge for
their expenses in replacing a Senior Note. Every replacement Senior Note is
an additional Obligation of the Company.
SECTION 2.08 OUTSTANDING SENIOR NOTES.
The Senior Notes outstanding at any time are all the
Senior Notes the Trustee has authenticated except for those it has
canceled, those delivered to it for cancellation, those representing
reductions in the interest in a Global Note effected by the Trustee in
accordance with the provisions hereof, and those described in this Section
as not outstanding.
If a Senior Note is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to
it that a bona fide purchaser holds the replaced Senior Note.
If the entire principal of, and premium, if any, and
accrued interest on, any Senior Note is considered paid under Section 4.01,
it ceases to be outstanding and interest on it cease to accrue.
Subject to Section 2.09, a Senior Note does not cease to
be outstanding because the Company or an Affiliate holds the Senior Note.
SECTION 2.09 TREASURY SENIOR NOTES.
In determining whether the Holders of the required
principal amount of Senior Notes have concurred in any direction, waiver or
consent, Senior Notes owned by the Company or an Affiliate shall be
considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Senior Notes that a Trust Officer of the
Trustee knows are so owned shall be so disregarded. Notwithstanding the
foregoing, Senior Notes that the Company or an Affiliate offers to purchase
or acquires pursuant to an Offer, exchange offer, tender offer or otherwise
shall not be deemed to be owned by the Company or an Affiliate until legal
title to such Senior Notes passes to the Company or such Affiliate, as the
case may be.
SECTION 2.10 TEMPORARY SENIOR NOTES.
Until Definitive Notes are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Senior
Notes. Temporary Senior Notes shall be substantially in the form of
Definitive Notes but may have variations that the Company considers
appropriate for temporary Senior Notes. Without unreasonable delay, the
Company shall prepare and the Trustee, upon receipt of the Company's
written order signed by two Officers which shall specify the amount of
temporary Senior Notes to be authenticated and the date on which the
temporary Senior Notes are to be authenticated, shall authenticate
Definitive Notes and deliver them in exchange for temporary Senior Notes.
Until such exchange, Holders of temporary Senior Notes shall be entitled to
the same rights, benefits and privileges as Definitive Notes.
28
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Senior Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward
to the Trustee any Senior Notes surrendered to them for registration of
transfer, exchange, replacement, payment (including all Senior Notes called
for redemption and all Senior Notes accepted for payment pursuant to an
Offer) or cancellation, and the Trustee shall cancel all such Senior Notes
and shall destroy all canceled Senior Notes (subject to the Exchange Act's
record retention requirements) and deliver a certificate of their
destruction to the Company unless by written order, signed by two Officers
of the Company, the Company shall direct that canceled Senior Notes be
returned to it. The Company may not issue new Senior Notes to replace any
Senior Notes that have been canceled by the Trustee or that have been
delivered to the Trustee for cancellation. If the Company or an Affiliate
acquires any Senior Notes (other than by redemption or pursuant to an
Offer), such acquisition shall not operate as a redemption or satisfaction
of the Indebtedness represented by such Senior Notes unless and until such
Senior Notes are delivered to the Trustee for cancellation.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the
Senior Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to
Holders on a subsequent special record date, in each case at the rate
provided in the Senior Notes and in Section 4.01. The Company shall fix or
cause to be fixed each such special record date and payment date. As early
as practicable prior to the special record date, the Company (or the
Trustee, in the name of and at the expense of the Company) shall mail a
notice that states the special record date, the related payment date and
the amount of interest to be paid.
SECTION 2.13 RECORD DATE.
The record date for purposes of determining the identity
of Holders of Senior Notes entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture shall be
determined as provided for in section 316(c) of the TIA.
SECTION 2.14 CUSIP NUMBER.
A "CUSIP" number shall be printed on the Senior Notes,
and the Trustee shall use the CUSIP number in notices of redemption,
purchase or exchange as a convenience to Holders, provided that any such
notice may state that no representation is made as to the correctness or
accuracy of the CUSIP number printed in the notice or on the Senior Notes
and that reliance may be placed only on the other identification numbers
printed on the Senior Notes. The Company shall promptly notify the Trustee
of any change in the CUSIP number.
29
ARTICLE 3.
OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE
SECTION 3.01 NOTICES TO TRUSTEE.
If the Company elects to redeem Senior Notes pursuant to
Section 3.07, it shall furnish to the Trustee, at least 40 days prior to
the redemption date and at least 10 days prior to the date that notice of
the redemption is to be mailed by the Company to Holders, an Officers'
Certificate stating that the Company has elected to redeem Senior Notes
pursuant to Section 3.07, the date notice of redemption is to be mailed to
Holders, the redemption date, the aggregate principal amount of Senior
Notes to be redeemed, the redemption price for such Senior Notes and the
amount of accrued and unpaid interest on such Senior Notes as of the
redemption date. If the Trustee is not the Registrar, the Company shall,
concurrently with delivery of its notice to the Trustee of a redemption,
cause the Registrar to deliver to the Trustee a certificate (upon which the
Trustee may rely) setting forth the name of, and the aggregate principal
amount of Senior Notes held by, each Holder.
If the Company is required to offer to purchase Senior
Notes pursuant to Section 4.13 or 4.14, it shall furnish to the Trustee, at
least 2 Business Days before notice of the Offer is to be mailed to
Holders, an Officers' Certificate setting forth that the Offer is being
made pursuant to Section 4.13 or 4.14, as the case may be, the Purchase
Date, the maximum principal amount of Senior Notes the Company is offering
to purchase pursuant to the Offer, the purchase price for such Senior
Notes, and the amount of accrued and unpaid interest on such Senior Notes
as of the Purchase Date.
The Company will also provide the Trustee with any
additional information that the Trustee reasonably requests in connection
with any redemption or Offer.
SECTION 3.02 SELECTION OF SENIOR NOTES TO BE REDEEMED OR PURCHASED.
If less than all outstanding Senior Notes are to be
redeemed or if less than all Senior Notes tendered pursuant to an Offer are
to be accepted for payment, the Trustee shall select the outstanding Senior
Notes to be redeemed or accepted for payment pro rata (also on a pro rata
basis with the holders of the Company's 10% Senior Secured Notes due 2007),
by lot or by a method that complies with the requirements of any stock
exchange on which the Senior Notes are listed and that the Trustee
considers fair and appropriate. If the Company elects to mail notice of a
redemption to Holders, the Trustee shall at least 5 business days prior to
the date notice of redemption is to be mailed, (i) select the Senior Notes
to be redeemed from Senior Notes outstanding not previously called for
redemption and (ii) notify the Company of the names of each Holder of
Senior Notes selected for redemption, the principal amount of Senior Notes
held by each such Holder and the principal amount of such Holder's Senior
Notes that are to be redeemed. If less than all Senior Notes tendered
30
pursuant to an Offer on the Purchase Date are to be accepted for payment,
the Trustee shall select on or promptly after the Purchase Date the Senior
Notes to be accepted for payment. The Trustee shall select for redemption
or purchase Senior Notes or portions of Senior Notes in principal amounts
of $1,000 or integral multiples of $1,000; except that if all of the Senior
Notes of a Holder are selected for redemption or purchase, the aggregate
principal amount of the Senior Notes held by such Holder, even if not a
multiple of $1,000, shall be redeemed or purchased. Except as provided in
the preceding sentence, provisions of this Indenture that apply to Senior
Notes called for redemption or tendered pursuant to an Offer also apply to
portions of Senior Notes called for redemption or tendered pursuant to an
Offer. The Trustee shall notify the Company promptly of the Senior Notes or
portions of Senior Notes to be called for redemption or selected for
purchase.
SECTION 3.03 NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a
redemption date, the Company shall mail a notice of redemption to each
Holder of Senior Notes or portions thereof that are to be redeemed.
The notice shall identify the Senior Notes or portions
thereof to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price for the Senior
Notes and separately stating the amount
of unpaid and accrued interest on, such
Senior Notes as of the date of
redemption;
(3) if any Senior Note is being redeemed in
part, the portion of the principal
amount of such Senior Notes to be
redeemed and that, after the redemption
date, upon surrender of such Senior
Note, a new Senior Note or Senior Notes
in principal amount equal to the
unredeemed portion will be issued;
(4) the name and address of the Paying Agent;
(5) that Senior Notes called for redemption
must be surrendered to the Paying Agent
to collect the redemption price for,
and any accrued and unpaid interest on,
such Senior Notes;
(6) that, unless the Company defaults in
making such redemption payment,
interest on Senior Notes called for
redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Senior Notes pursuant
to which the Senior Notes called for
redemption are being redeemed; and
(8) the CUSIP number; provided that no
representation is made as to the
correctness or accuracy of the CUSIP
number listed in such notice and
printed on the Senior Notes.
31
At the Company's request, the Trustee shall (at the
Company's expense) give the notice of redemption in the Company's name at
least 30 but not more than 60 days before a redemption; provided, however,
that the Company shall deliver to the Trustee, at least 45 days prior to
the redemption date and at least 10 days prior to the date that notice of
the redemption is to be mailed to Holders, an Officers' Certificate that
(i) requests the Trustee to give notice of the redemption to Holders, (ii)
sets forth the information to be provided to Holders in the notice of
redemption, as set forth in the preceding paragraph, (iii) states that the
Company has elected to redeem Senior Notes pursuant to Section 3.07, and
(iv) sets forth the aggregate principal amount of Senior Notes to be
redeemed and the amount of accrued and unpaid interest thereon as of the
redemption date. If the Trustee is not the Registrar, the Company shall,
concurrently with any such request, cause the Registrar to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the
name of, the address of, and the aggregate principal amount of Senior Notes
held by, each Holder.
SECTION 3.04 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed, Senior Notes called
for redemption become due and payable on the redemption date at the price
set forth in the Senior Note. Upon surrender to the Trustee or Paying
Agent, such Senior Notes called for redemption shall be paid at the
redemption price (which shall include accrued interest thereon to the
redemption date) but installments of interest, the maturity of which is on
or prior to the redemption date, shall be payable to Holders of record at
the close of business on the relevant record dates.
SECTION 3.05 DEPOSIT OF REDEMPTION PRICE.
On or prior to any redemption date, the Company shall
deposit with the Trustee or with the Paying Agent money sufficient to pay
the redemption price of, and accrued interest on, all Senior Notes to be
redeemed on that date. The Trustee or the Paying Agent shall return to the
Company any money that the Company deposited with the Trustee or the Paying
Agent in excess of the amounts necessary to pay the redemption price of,
and accrued interest on, all Senior Notes to be redeemed.
If the Company complies with the preceding paragraph,
interest on the Senior Notes to be redeemed will cease to accrue on such
Senior Notes on the applicable redemption date, whether or not such Senior
Notes are presented for payment. If a Senior Note is redeemed on or after
an interest record date but on or prior to the related interest payment
date, then any accrued and unpaid interest shall be paid to the Person in
whose name such Senior Note was registered at the close of business on such
record date. If any Senior Note called for redemption shall not be so paid
upon surrender for redemption because of the failure of the Company to
comply with the preceding paragraph, interest will be paid on the unpaid
principal, premium, if any, interest from the redemption date until such
principal, premium, interest is paid, at the rate of interest provided in
the Senior Notes and Section 4.01.
SECTION 3.06 SENIOR NOTES REDEEMED IN PART.
Upon surrender of a Senior Note that is redeemed in part,
the Company shall issue and the Trustee, upon receipt of an authentication
order shall authenticate for the Holder at the Company's expense a new
Senior Note equal in principal amount to the unredeemed portion of the
Senior Note surrendered.
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SECTION 3.07 OPTIONAL REDEMPTION PROVISIONS.
Senior Notes are redeemable, in whole or in part, at any
time, at the option of the Company at the Make-Whole Price, together with
all accrued and unpaid interest thereon, if any, to the Redemption Date.
SECTION 3.08 MANDATORY PURCHASE PROVISIONS.
(a) Within 30 days after any Change of Control Trigger Date or
Asset Sale Trigger Date, the Company shall mail a notice to each Holder at
such Holder's registered address stating (i) that an offer ("Offer") is
being made pursuant to Section 4.13 or Section 4.14, as the case may be,
the length of time the Offer shall remain open and the maximum aggregate
principal amount of Senior Notes that will be accepted for payment pursuant
to such Offer; (ii) the purchase price for the Senior Notes (as set forth
in Section 4.13 or Section 4.14, as the case may be), the amount of accrued
and unpaid interest on, such Senior Notes as of the purchase date, and the
purchase date (which shall be no earlier than 30 days and no later than 40
days from the date such notice is mailed (the "Purchase Date")); (iii) that
any Senior Note not accepted for payment will continue to accrue interest;
(iv) that, unless the Company fails to deposit with the Paying Agent on the
Purchase Date an amount sufficient to purchase all Senior Notes accepted
for payment, interest shall cease to accrue on such Senior Notes after the
Purchase Date; (v) that Holders electing to tender any Senior Note or
portion thereof will be required to surrender their Senior Note, with a
form entitled "Option of Holder to Elect Purchase" completed, to the Paying
Agent at the address specified in the notice prior to the close of business
on the Business Day preceding the Purchase Date, provided that Holders
electing to tender only a portion of any Senior Note must tender a
principal amount of $1,000 or integral multiples thereof; (vi) that Holders
will be entitled to withdraw their election to tender Senior Notes, if the
Paying Agent receives, not later than the close of business on the third
Business Day preceding the Purchase Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Senior Notes delivered for purchase, and a statement that such
Holder is withdrawing his election to have such Senior Note purchased; and
(vii) that Holders whose Senior Notes are accepted for payment in part will
be issued new Senior Notes equal in principal amount to the unpurchased
portion of Senior Notes surrendered; provided that only Senior Notes in a
principal amount of $1,000 or integral multiples thereof will be accepted
for payment in part.
(b) On the Purchase Date for any Offer, the Company shall, to
the extent required by this Indenture and such Offer, (i) in the case of an
Offer resulting from a Change of Control, accept for payment all Senior
Notes or portions thereof tendered pursuant to such Offer and, in the case
of an Offer resulting from an Asset Sale, accept for payment the maximum
principal amount of Senior Notes or portions thereof tendered pursuant to
such Offer that can be purchased out of Excess Proceeds from such Asset
Sale Trigger Date, (ii) deposit with the Paying Agent the aggregate
purchase price of all Senior Notes or portions thereof accepted for payment
and any accrued and unpaid interest on such Senior Notes as of the Purchase
Date, and (iii) deliver or cause to be delivered to the Trustee all Senior
Notes tendered pursuant to the Offer.
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(c) With respect to any Offer, if less than all of the Senior
Notes tendered pursuant to an Offer are to be purchased by the Company, the
Trustee shall select on the Purchase Date the Senior Notes or portions
thereof to be accepted for payment pursuant to Section 3.02.
(d) Promptly after consummation of an Offer, (i) the Paying
Agent shall mail (or cause to be transferred by book entry) to each Holder
of Senior Notes or portions thereof accepted for payment an amount equal to
the purchase price for, plus any accrued and unpaid interest on, such
Senior Notes, (ii) with respect to any tendered Senior Note not accepted
for payment in whole or in part, the Trustee shall return such Senior Note
to the Holder thereof, and (iii) with respect to any Senior Note accepted
for payment in part, the Trustee shall authenticate and mail to each such
Holder a new Senior Note equal in principal amount to the unpurchased
portion of the tendered Senior Note.
(e) The Company will publicly announce the results of the Offer
on or as soon as practicable after the Purchase Date.
(f) The Company shall comply with any tender offer rules under
the Exchange Act which may then be applicable, including Rule 14e-1, in
connection with an Offer required to be made by the Company to repurchase
the Senior Notes as a result of a Change of Control Trigger Date or an
Asset Sale Trigger Date. To the extent that the provisions of any
securities laws or regulations conflict with provisions of this Indenture,
the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under
this Indenture by virtue thereof.
(g) With respect to any Offer, if the Company deposits prior
to 10 a.m. New York City time with the Paying Agent on the Purchase Date an
amount in available funds sufficient to purchase all Senior Notes accepted
for payment, interest shall cease to accrue on such Senior Notes after the
Purchase Date; provided, however, that if the Company fails to deposit such
amount on the Purchase Date, interest shall continue to accrue on such
Senior Notes until such deposit is made.
ARTICLE 4.
COVENANTS
SECTION 4.01 PAYMENT OF SENIOR NOTES.
The Company shall pay the principal of, and premium, if
any, and accrued and unpaid interest on the Senior Notes on the dates and
in the manner provided in the Senior Notes. Holders of Senior Notes must
surrender their Senior Notes to the Paying Agent to collect principal
payments. Principal of, premium, if any, and accrued and unpaid interest,
shall be considered paid on the date due if the Paying Agent (other than
the Company or any of its Subsidiaries), the Global Note Holder or each
Holder that has specified an account, holds, as of 10:00 a.m. New York City
time, money the Company deposited in immediately available funds designated
for and sufficient to pay in cash all principal, premium, if any, and
34
accrued and unpaid interest, then due; provided that, to the extent that
the Holders have not specified accounts, such amounts shall be considered
paid on the date due if the Company mails a check for such amounts on such
date. The Paying Agent shall return to the Company, no later than five days
following the date of payment, any money (including accrued interest) that
exceeds the amount of principal, premium, if any, accrued and unpaid
interest, paid on the Senior Notes.
To the extent lawful, the Company shall pay interest
(including Post-Petition Interest) on (i) overdue principal and premium at
the rate equal to 2% per annum in excess of the then applicable interest
rate on the Senior Notes, compounded semiannually and (ii) overdue
installments of interest (without regard to any applicable grace period) at
the same rate as set forth in clause (i), compounded semiannually.
SECTION 4.02 SEC REPORTS.
(a) The Parent shall file with the Trustee, within 15 days after
it files them with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) that
the Parent is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act. If the Parent is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, the Parent shall file with the
Trustee, within 15 days after it would have been required to file with the
SEC, financial statements, including any notes thereto (and with respect to
annual reports, an auditor's report by a firm of established national
reputation), and a "Management's Discussion and Analysis of Financial
Condition and Results of Operations," both comparable to that which the
Parent would have been required to include in such annual reports,
information, documents or other reports if the Parent were subject to the
requirements of Section 13 or 15(d) of the Exchange Act. Subsequent to the
qualification of this Indenture under the TIA, if ever, the Parent and the
Company also shall comply with the provisions of section 314(a) of the TIA.
(b) If the Parent is required to furnish annual or quarterly
reports to its stockholders pursuant to the Exchange Act, the Parent shall
cause any annual report furnished to its stockholders generally and any
quarterly or other financial reports it furnishes to its stockholders
generally to be filed with the Trustee and the Parent shall mail to the
Holders at their addresses appearing in the register of Senior Notes
maintained by the Registrar. If the Parent is not required to furnish
annual or quarterly reports to its stockholders pursuant to the Exchange
Act, the Parent shall cause its financial statements referred to in Section
4.02(a), including any notes thereto (and with respect to annual reports,
an auditors' report by a firm of established national reputation), and a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," to be so mailed to the Holders within 120 days after the end
of each of the Parent's fiscal years and within 60 days after the end of
each of the first three fiscal quarters of each year. The Parent shall
cause to be disclosed in a statement accompanying any annual report or
comparable information as of the date of the most recent financial
statements in each such report or comparable information the amount
available for payments pursuant to Section 4.05. As of the date hereof, the
Parent's fiscal year ends on December 31.
35
(c) If the Parent is not subject to the requirements of
Section 13 or 15(d) of the Exchange Act, for so long as any Senior Notes
remain outstanding, the Parent shall furnish to the Holders and prospective
investors, upon their request, the information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 4.03 COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days
after the end of each fiscal year of the Company, an Officers' Certificate
stating that a review of the activities of the Company and its Subsidiaries
during the preceding fiscal year has been made under the supervision of the
signing Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Officer signing such certificate, that, to
the best of his or her knowledge, the Company has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and is
not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default
shall have occurred, describing all such Defaults or Events of Default of
which he or she may have knowledge and what action the Company has taken or
proposes to take with respect thereto) and that, to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of, premium, if any, and accrued and
unpaid interest on, the Senior Notes are prohibited or if such event has
occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.
So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants,
the financial statements delivered pursuant to Section 4.02 shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation
reasonably satisfactory to the Trustee) that in making the examination
necessary for certification of such financial statements nothing has come
to their attention that would lead them to believe that the Company has
violated any provisions of Section 4.01, 4.05, 4.06, 4.07, 4.08, 4.09,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15 or 4.16 or of Article 5 or, if any such
violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of
any such violation.
The Company shall, so long as any of the Senior Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming
aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.04 STAY, EXTENSION AND USURY LAWS.
Each of the Company and the Guarantors covenants (to the
extent that it may lawfully do so) that it will not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay, extension or usury law wherever enacted, now or at
any time hereafter in force, that might affect the covenants or the
performance of this Indenture; and the Company (to the extent it may
lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law has been enacted.
36
SECTION 4.05 LIMITATION ON RESTRICTED PAYMENTS.
(a) Neither the Parent nor the Company shall, and they shall
not permit any Restricted Subsidiary to, directly or indirectly, (i)
declare or pay any dividend or make any distribution on account of the
Parent's, the Company's or such Restricted Subsidiary's Capital Stock or
other Equity Interests (other than dividends or distributions payable in
Capital Stock or other Equity Interests (other than Disqualified Stock) of
the Parent, the Company or a Restricted Subsidiary and other than dividends
or distributions payable by a Restricted Subsidiary to another Restricted
Subsidiary or to the Company or to the Parent); (ii) purchase, redeem or
otherwise acquire or retire for value any Capital Stock or other Equity
Interests of the Parent, the Company or any of its Restricted Subsidiaries
(other than any such Equity Interest purchased from the Parent, the Company
or any Restricted Subsidiary for fair market value (as determined by the
Board of Directors in good faith); (iii) voluntarily prepay Subordinated
Indebtedness or the Parent or the Company, whether any such Subordinated
Indebtedness is outstanding on, or issued after, the date of original
issuance of the Senior Notes except as specifically permitted by the
covenants of this Indenture; (iv) make any Restricted Investment (all such
dividends, distributions, purchases, redemptions, acquisitions,
retirements, prepayments and Restricted Investments, being collectively
referred to as "Restricted Payments"), if, at the time of such Restricted
Payment:
(i) a Default or Event of Default shall have occurred
and be continuing or shall occur as a
consequence thereof, or
(ii) immediately after such Restricted Payment and
after giving effect thereto on a Pro Forma
basis, the Company shall not be able to issue
$1.00 of additional Indebtedness pursuant to
Section 4.07(a), or
(iii) such Restricted Payment, together with the
aggregate of all other Restricted Payments made
after the date of original issuance of the
Series D Senior Notes, without duplication,
exceeds the sum of (1) 50% of the aggregate
Consolidated Net Income (including, for this
purpose, gains from Asset Sales and, to the
extent not included in Consolidated Net Income,
any gain from a sale or disposition of a
Restricted Investment) of the Company (or, in
case such aggregate is a loss, 100% of such
loss) for the period (taken as one accounting
period) from the beginning of the first fiscal
quarter commencing immediately after the date of
original issuance of the Series D Senior Notes
and ended as of the Company's most recently
ended fiscal quarter at the time of such
Restricted Payment, plus (2) 100% of the
aggregate net cash proceeds and the fair market
value of any property or securities (as
determined by the Board of Directors in good
faith) received by the Company from the issue or
sale of Capital Stock or other Equity Interests
of the Company subsequent to the date of
original issuance of the Series D Senior Notes
(other than (x) Capital Stock or other Equity
Interests issued or sold to the Parent or a
Restricted Subsidiary and (y) the issuance or
sale of Disqualified Stock), plus (3)
37
$5,000,000, plus (4) the amount by which the
principal amount of and any accrued interest on
either (x) Senior Indebtedness of the Company or
(y) any Indebtedness of any Restricted
Subsidiary is reduced on the Company's
consolidated balance sheet upon the conversion
or exchange other than by a Restricted
Subsidiary subsequent to the date of original
issuance of the Series D Senior Notes of any
Indebtedness of the Company or any Restricted
Subsidiary (not held by the Company or any
Restricted Subsidiary) for Capital Stock or
other Equity Interests (other than Disqualified
Stock) of the Company or any Restricted
Subsidiaries (less the amount of any cash, or
the fair market value of any other property or
securities (as determined by the Board of
Directors in good faith), distributed by the
Company or any Restricted Subsidiary (to Persons
other than the Company or any other Restricted
Subsidiary) upon such conversion or exchange),
plus (5) if any Non-Restricted Subsidiary is
redesignated as a Restricted Subsidiary, the
value of the deemed Restricted Payment resulting
therefrom and determined in accordance with the
second sentence of Section 4.16; provided,
however, that for purposes of this clause (5),
the value of any redesignated Non-Restricted
Subsidiary shall be reduced by the amount that
any such redesignation replenishes or increases
the amount of Restricted Investments permitted
to be made pursuant to Section 4.05(b)(iii).
(b) Notwithstanding Section 4.05(a), the following Restricted
Payments may be made: (i) the payment of any dividend within 60 days after
the date of declaration thereof, if at said date of declaration, such
payment would comply with all the provisions hereof (including, but not
limited to, this Section 4.05); (ii) making Restricted Investments at any
time, and from time to time, in an aggregate outstanding amount of
$20,000,000 after the date of original issuance of the Series D Senior
Notes (it being understood that if any Restricted Investment after the date
of original issuance of the Series D Senior Notes pursuant to this Section
4.05(b)(ii) is sold, transferred or otherwise conveyed to any Person other
than the Company or a Restricted Subsidiary, the portion of the net cash
proceeds or fair market value of securities or properties paid or
transferred to the Company and its Restricted Subsidiaries in connection
with such sale, transfer or conveyance that relates or corresponds to the
repayment or return of the original cost of such a Restricted Investment
will replenish or increase the amount of Restricted Investments permitted
to be made pursuant to this Section 4.05(b)(ii), so that up to $20,000,000
of Restricted Investments may be outstanding under this Section 4.05(b)(ii)
at any given time; provided that any Restricted Investment in a Restricted
Subsidiary made pursuant to this Section 4.05(b)(ii) is made for fair
market value (as determined by the Board of Directors in good faith); (iii)
the repurchase, redemption, retirement or acquisition of the Parent's or
the Company's stock from the executives, management, employees or
consultants of the Parent, the Company or its Subsidiaries pursuant to the
terms of any subscription, stockholder or other agreement or plan, up to an
aggregate amount not to exceed $5,000,000; (iv) any loans, advances,
distributions or payments from the Parent or the Company to its Restricted
Subsidiaries, or any loans, advances, distributions or payments by a
Restricted Subsidiary to the Company, the Parent or to another Restricted
Subsidiary, in each case pursuant to intercompany Indebtedness,
38
intercompany management agreements and other intercompany agreements and
obligations; (v) the purchase, redemption, retirement or other acquisition
of (A) any Senior Indebtedness of the Company or the Parent or any
Indebtedness of a Restricted Subsidiaries required by its terms to be
purchased, redeemed, retired or acquired with the net proceeds from asset
sales (as defined in the instrument evidencing such Senior Indebtedness or
Indebtedness) or upon a change of control (as defined in the instrument
evidencing such Senior Indebtedness or Indebtedness) and (B) the Senior
Notes pursuant to Sections 4.13 and 4.14; (vi) to the extent constituting
Restricted Payments, payments under the Jordan Agreements; (vii) the
redemption, repurchase, retirement or the acquisition of any Capital Stock
or other Equity Interests of the Parent, the Company or any Restricted
Subsidiary in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company or the Parent)
of other Capital Stock or other Equity Interests of the Parent, the Company
or any Restricted Subsidiary (other than any Disqualified Stock); provided
that any net cash proceeds that are utilized for any such redemption,
repurchase, retirement or other acquisition, and any Net Income resulting
therefrom, shall be excluded from this Section 4.05(a)(iv)(c)(1) and
(c)(2); (viii) the defeasance, redemption or repurchase of pari passu or
Subordinated Indebtedness with the net cash proceeds from an issuance of
permitted Refinancing Indebtedness or the substantially concurrent sale
(other than to a Subsidiary of the Company or the Parent) of Capital Stock
or other Equity Interests of the Parent, the Company or of a Restricted
Subsidiary (other than Disqualified Stock); provided that any net cash
proceeds that are utilized for any such defeasance, redemption or
repurchase, and any Net Income resulting therefrom, shall be excluded from
this Section 4.05(a)(iv)(c)(1) and (c)(2); (ix) payments of fees, expenses
and indemnities in respect of the Company's and its Subsidiaries' directors
and such payments to Parent (and its parent companies) in respect of their
directors, provided that the aggregate amount of such fees payable to all
such directors does not exceed $250,000 in any fiscal year; (x) payments in
respect of the Junior Seller Notes, (xi) payments in connection with the
Offering; (xii) payments in respect of interest under the Series D Senior
Notes of the Parent and payments in respect of interest on any other
Indebtedness of the Parent permitted to be outstanding in accordance with
this Indenture in each case, as long as (A) no Default or Event of Default
has occurred and is continuing, (B) such payment is made not more than two
Business Days prior to the time such interest payment is due, (C) the
Company could issue at least $1 of additional Indebtedness pursuant to the
first sentence of the first paragraph of Section 4.07, and (D) the Parent
uses such amounts for the payment of such interest; (xiii) Restricted
Investments made or received in connection with the sale, transfer or
disposition of any business, properties or assets of the Parent, the
Company or any Restricted Subsidiary, provided, that if such sale, transfer
or disposition constitutes an Asset Sale, the Company complies with Section
4.14; (xiv) any Restricted Investment constituting securities or
instruments of a Person issued in exchange for trade or other claims
against such Person in connection with a financial reorganization or
restructuring of such Person; and (xv) any Restricted Investment
constituting an equity investment in a Receivables Subsidiary.
SECTION 4.06 CORPORATE EXISTENCE.
Subject to Section 4.14 and Article 5, the Company shall
do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or
other existence of each of its Restricted Subsidiaries in accordance with
the respective organizational documents of each of its Restricted
Subsidiaries and the rights (charter and statutory), licenses and
franchises of the Company and each of its Restricted Subsidiaries;
provided, however, that the Company shall not be required to preserve any
such right, license or franchise, or the corporate, partnership or other
existence of any Restricted Subsidiary, if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and its Restricted Subsidiaries
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
39
SECTION 4.07 LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF
DISQUALIFIED STOCK.
(a) Neither the Parent nor the Company shall, and they shall
not permit any Restricted Subsidiary to, issue (1) any Indebtedness (other
than the Indebtedness represented by the Senior Notes) or (2) any
Disqualified Stock; provided, that (A) the Parent and the Company shall be
permitted to issue such Indebtedness or such Disqualified Stock and (B) a
Restricted Subsidiary shall be permitted to issue such Indebtedness if the
Parent's Cash Flow Coverage Ratio for its four full fiscal quarters next
preceding the date such additional Indebtedness is issued would have been
at least 2.00 to 1 determined on a Pro Forma basis (including, for this
purpose, any other Indebtedness incurred since the end of the applicable
four quarter period) as if such additional Indebtedness and any other
Indebtedness issued since the end of such four-quarter period had been
issued at the beginning of such four-quarter period.
(b) Section 4.07(a) shall not apply to the issuance of
(i) Indebtedness of the Company and/or its Restricted Subsidiaries as
measured on such date of issuance in an aggregate principal amount
outstanding on any such date of issuance not exceeding the greater of (A)
$75,000,000 aggregate principal amount pursuant to the Credit Facility and
(B) an aggregate principal amount up to the sum of (1) 85% of the book
value of the Receivables of the Company and its Restricted Subsidiaries on
a consolidated basis and (2) 65% of the book value of the inventories of
the Company and its Restricted Subsidiaries on a consolidated basis;
provided that the aggregate principal amount of Indebtedness outstanding
under this clause (i) together with the aggregate principal amount of
Indebtedness outstanding under clause (iv) below shall not exceed $100.0
million in aggregate principal amount at any one time outstanding; (ii)
Indebtedness of the Parent, the Company and its Restricted Subsidiaries
pursuant to any Receivables Financing; (iii) Indebtedness of the Parent,
the Company and its Restricted Subsidiaries in connection with capital
leases, sale and leaseback transactions, purchase money obligations,
capital expenditures or similar financing transactions relating to (A)
their properties, assets and rights as of the date of original issuance of
the Senior Notes or (B) their properties, assets and rights acquired after
the date of original issuance of the Senior Notes, provided that the
aggregate principal amount of such Indebtedness under this Section
4.07(b)(iii)(B) does not exceed 100% of the cost of such properties, assets
and rights; (iv) additional Indebtedness of the Parent, the Company and its
Restricted Subsidiaries in an aggregate principal amount up to $25,000,000
(all or any portion of which may be issued as additional Indebtedness under
the Credit Facility); provided that the aggregate principal amount of
Indebtedness outstanding under this clause (iv) together with the aggregate
principal amount of Indebtedness outstanding under clause (i) above shall
not exceed $100.0 million in aggregate principal amount at any one time
outstanding; and (v) Other Permitted Indebtedness.
(c) Notwithstanding Sections 4.07(a) and (b), no Restricted
Subsidiary shall under any circumstances issue a guarantee of any
Indebtedness of the Company except for guarantees issued by Restricted
Subsidiaries pursuant to Section 4.15, provided, however, that the
foregoing will not limit or restrict guarantees issued by Restricted
Subsidiaries in respect of Indebtedness of other Restricted Subsidiaries.
40
SECTION 4.08 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) Except as otherwise set forth herein, neither the Parent,
the Company nor any Restricted Subsidiary shall make any loan, advance,
guarantee or capital contribution to, or for the benefit of, or sell,
lease, transfer or dispose of any properties or assets to, or for the
benefit of, or purchase or lease any property or assets from, or enter into
or amend any contract, agreement or understanding with, or for the benefit
of, an Affiliate (each such transaction or series of related transactions
that are part of a common plan, an "Affiliate Transaction"), except in good
faith and on terms that are no less favorable to the Parent, the Company or
the relevant Restricted Subsidiary than those that would have been obtained
in a comparable transaction on an arm's length basis from an unrelated
Person.
(b) The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Affiliate Transaction involving aggregate
payments or other transfers by the Company and its Restricted Subsidiaries
in excess of $5,000,000 (including cash and non-cash payments and benefits
valued at their fair market value by the Board of Directors of the Company
in good faith), unless the Company delivers to the Trustee: (i) a
resolution of the Board of Directors stating that the Board of Directors
(including a majority of the disinterested directors, if any) has, in good
faith, determined that such Affiliate Transaction complies with the
provisions of this Indenture; and (ii)(A) with respect to any Affiliate
Transaction involving the incurrence of Indebtedness, a written opinion of
a nationally recognized investment banking or accounting firm experienced
in the review of similar types of transactions, (B) with respect to any
Affiliate Transaction involving the transfer of real property, fixed assets
or equipment, either directly or by a transfer of 50% or more of the
Capital Stock of a Restricted Subsidiary which holds any such real
property, fixed assets or equipment, a written appraisal from a nationally
recognized appraiser experienced in the review of similar types of
transactions or (C) with respect to any Affiliate Transaction not otherwise
described in (A) or (B) above, a written certification from a nationally
recognized professional experienced in evaluating similar types of
transactions, in each case, stating that the terms of such transaction are
fair to the Company or such Restricted Subsidiary, as the case may be, from
a financial point of view.
(c) Notwithstanding Sections 4.08(a) and (b), this Section 4.08
shall not apply to (i) transactions between the Company, the Parent or any
Guarantor Subsidiary or between Guarantor Subsidiaries; (ii) payments under
the Jordan Agreements; (iii) any other payments or transactions permitted
pursuant to Section 4.05; (iv) reasonable compensation paid to officers,
employees or consultants of the Company or any Subsidiary as determined in
good faith by the Company's Board of Directors or executives; (v)
transactions in connection with a Receivables Financing; or (vi) payments
and transactions in connection with the Offering.
SECTION 4.09 LIMITATION ON LIENS.
Neither the Parent nor the Company shall, and they shall
not permit any Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien (other than Permitted Liens) upon
any property or asset now owned or hereafter acquired by them, or any
income or profits therefrom, or assign or convey any right to receive
income therefrom; provided, however, that in addition to creating Permitted
Liens on its properties or assets, the Parent, the Company and any of its
Restricted Subsidiaries may create any Lien upon any of their properties or
assets (including, but not limited to, any Capital Stock of its
Subsidiaries) if the Senior Notes are equally and ratably secured, subject
to the Intercreditor Agreement.
41
SECTION 4.10 COMPLIANCE WITH LAWS, TAXES.
The Company shall, and shall cause each of its Restricted
Subsidiaries to, comply with all statutes, laws, ordinances, or government
rules and regulations to which it is subject, the non-compliance with which
would materially adversely affect the business, prospects, earnings,
properties, assets or condition, financial or otherwise, of the Company and
its Restricted Subsidiaries taken as a whole.
The Company shall, and shall cause each of its Restricted
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except those contested in good faith by appropriate
proceedings.
SECTION 4.11 LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective, any encumbrance or
restriction on the ability of any 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 Restricted Subsidiary, or pay any Indebtedness owed to, the
Company or any Restricted Subsidiary; (ii) make loans or advances to the
Company; or (iii) transfer any of its properties or assets to the Company,
except for such encumbrances or restrictions existing under or by reason of
(A) applicable law; (B) Indebtedness permitted (1) under Section 4.07(a),
(2) under Sections 4.07(b)(i), (ii), (iii) and (iv) and clauses (i), (v),
(vi), (vii), (ix), (x), (xi) and (xv) of the definition of Other Permitted
Indebtedness, or (3) by agreements and transactions permitted under Section
4.05; (C) customary provisions restricting subletting or assignment of any
lease or license of the Company or any Restricted Subsidiary; (D) customary
provisions of any franchise, distribution or similar agreement; (E) any
instrument governing Indebtedness or any other encumbrance or restriction
of a Person acquired by the Company or any Restricted Subsidiary 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, or the property or assets of the Person, so acquired; (F)
Indebtedness or other agreements existing on the date of original issuance
of the Senior Notes; (G) any Refinancing Indebtedness of Indebtedness
described in Section 4.07(b) and clauses (i), (v), (vi), (vii), (ix), (x),
(xi) and (xv) of the definition of Other Permitted Indebtedness; provided
that the encumbrances and restrictions created in connection with such
Refinancing Indebtedness are no more restrictive in any material respect
with regard to the interests of the Holders of Senior Notes than the
encumbrances and restrictions in the refinanced Indebtedness; (H) any
restrictions, with respect to a Restricted Subsidiary, imposed pursuant to
an agreement that has been entered into for the sale or disposition of the
stock, business, assets or properties of such Restricted Subsidiary; (I)
the terms of any Indebtedness of the Company incurred in connection with
Section 4.07, provided that the terms of such Indebtedness constitute no
greater encumbrance or restriction on the ability of any Restricted
42
Subsidiary to pay dividends or make distributions, make loans or advances
or transfer properties or assets than is otherwise permitted by this
Section 4.11; and (J) the terms of purchase money obligations, but only to
the extent such purchase money obligations restrict or prohibit the
transfer of the property so acquired.
(b) Nothing contained in this Section 4.11 shall prevent the
Company from entering into any agreement or instrument providing for the
incurrence of Permitted Liens or restricting the sale or other disposition
of property or assets of the Company or any of its Restricted Subsidiaries
that are subject to Permitted Liens.
SECTION 4.12 MAINTENANCE OF OFFICE OR AGENCIES.
The Company shall maintain in the Borough of Manhattan,
the City of New York an office or an agency (which may be an office of any
Agent) where Senior Notes may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect
of the Senior Notes and this Indenture may be served. The Company shall
give prompt written notice to the Trustee of any change in the location of
such office or agency. If at any time the Company shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices
and demands may be made or served at the Corporate Trust Office.
The Company may also from time to time designate one or
more other offices or agencies where the Senior Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or
rescission shall in any matter relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, the City of New
York for such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office
of the Trustee located at U.S. Bank National Association, New York Regional
Office, 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx, 00000, as one such
office or agency of the Company in accordance with Section 2.03.
SECTION 4.13 CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control (such date
being the "Change of Control Trigger Date"), each Holder of Senior Notes
shall have the right to require the Company to purchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Senior
Notes pursuant to an Offer at a purchase price in cash equal to 101% of the
aggregate principal amount thereof, plus any accrued and unpaid interest to
the date of purchase. Although the failure of the Company to purchase all
Senior Notes tendered in such an Offer shall be a Default, if the Company
is unable to purchase all Senior Notes tendered in such an Offer, the
Company shall nevertheless purchase the maximum principal amount of Senior
Notes that it is able to purchase at that time.
(b) Prior to the mailing of the notice referred to in
Section 3.08(a), but in any event within 30 days following any Change of
Control Trigger Date, the Company shall (i) repay in full and terminate all
commitments under Indebtedness under the Credit Facility and all other
Senior Indebtedness the terms of which require repayment upon a Change of
Control or offer to repay in full and terminate all commitments under all
Indebtedness under the Credit Facility and all such other Senior
Indebtedness and to repay the Indebtedness owed to each lender which has
accepted such offer or (ii) obtain the requisite consents under the Credit
Facility and all such other Senior Indebtedness to permit the repurchase of
the Senior Notes as provided in Section 3.08(b). The Company shall first
comply with Section 4.13(b)(ii) before it shall be required to repurchase
Senior Notes pursuant to the provisions in Section 3.08. The Company's
failure to comply with this Section 4.13(b) shall constitute an Event of
Default described in clause (ii) and not in clause (iii) under Section
6.01(a)
43
(c) In the event of a Change of Control, the Company shall
not offer to purchase or redeem any Subordinated Indebtedness required or
entitled by its terms to be redeemed or purchased until the Change of
Control Offer for the Senior Notes has been consummated and all Senior
Notes tendered pursuant to such Offer have been accepted for payment.
SECTION 4.14 LIMITATION ON ASSET SALES.
(a) Neither the Company nor the Parent shall, and they shall
not permit any Restricted Subsidiary to, directly or indirectly, consummate
an Asset Sale (including the sale of any of the Capital Stock of any
Restricted Subsidiary) providing for Net Proceeds in excess of $2,500,000
unless at least 75% of the Net Proceeds from such Asset Sale are applied
(in any manner otherwise permitted by this Indenture) to one or more of the
following purposes in such combination as the Company shall elect: (i) an
investment in another asset or business in the same line of business as, or
a line of business similar to that of, the line of business of the Company
and its Restricted Subsidiaries at the time of the Asset Sale; provided
that such investment occurs on or prior to the 365th day following the date
of such Asset Sale (the "Asset Sale Disposition Date"), (ii) to reimburse
the Company or its Subsidiaries for expenditures made, and costs incurred,
to repair, rebuild, replace or restore property subject to loss, damage or
taking to the extent that the Net Proceeds consist of insurance proceeds
received on account of such loss, damage or taking, (iii) the purchase,
redemption or other prepayment or repayment of outstanding Senior
Indebtedness of the Company or Indebtedness of the Company's Restricted
Subsidiaries on or prior to the 365th day following the Asset Sale
Disposition Date, (iv) an Offer (as defined in the Series D Indenture)
relating to the Series D Senior Notes or (iv) an Offer expiring on or prior
to the Purchase Date.
(b) Neither the Company nor the Parent shall, and they shall
not permit any Restricted Subsidiary to, directly or indirectly, consummate
an Asset Sale unless at least 75% of the consideration thereof received by
the Parent, the Company or such Restricted Subsidiary is in the form of
cash, cash equivalents or marketable securities; provided that, solely for
purposes of calculating such 75% of the consideration, the amount of (i)
any liabilities (as shown on the Parent's, the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto, excluding
contingent liabilities and trade payables), of the Parent, the Company or
any Restricted Subsidiary (other than liabilities that are by their terms
subordinated to the Senior Notes) that are assumed by the transferee of any
such assets and (ii) any notes or other obligations received by the Parent,
the Company or any such Restricted Subsidiary from such transferee that are
promptly, but in no event more than 30 days after receipt, converted by the
Parent, the Company or such Restricted Subsidiary into cash (to the extent
of the cash received), shall be deemed to be cash and cash equivalents for
purposes of this provision. Any Net Proceeds from any Asset Sale that are
not applied or invested as provided in Section 4.14(a) shall constitute
"Excess Proceeds."
44
(c) When the aggregate amount of Excess Proceeds exceeds
$10,000,000 (such date being an "Asset Sale Trigger Date"), the Company
shall make an Offer to all Holders of Senior Notes to purchase the maximum
principal amount of the Senior Notes then outstanding (on a pro rata basis
with the holders of the Company's 10% Senior Secured Notes due 2007) that
may be purchased out of Excess Proceeds that remain upon completion of the
Excess Proceeds offer required under the Series D Indenture, at an offer
price in cash in an amount equal to 100% of principal amount thereof plus
any accrued and unpaid interest to the Purchase Date in accordance with the
procedures set forth in this Indenture. The Company's failure to comply
with this Section 4.14(c) shall constitute an Event of Default described in
clause (ii) and not in clause (iii) under Section 6.01(a).
(d) To the extent that any Excess Proceeds remain after
completion of an Offer, the Company may use such remaining amount for
general corporate purposes.
(e) If the aggregate principal amount of Senior Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Senior Notes to be purchased on a pro rata basis.
(f) Upon completion of an Asset Sale Offer, the amount of
Excess Proceeds shall be reset at zero.
(g) Notwithstanding the foregoing, to the extent that any or
all of the Net Proceeds of an Asset Sale is prohibited or delayed by
applicable local law from being repatriated to the United States, the
portion of such Net Proceeds so affected will not be required to be applied
pursuant to this Section 4.14, but may be retained for so long, but only
for so long, as the applicable local law prohibits repatriation to the
United States. The Company shall promptly take all reasonable actions
required by the applicable local law to permit such repatriation, and once
such repatriation of any affected Net Proceeds is not prohibited under
applicable local law, such repatriation will be immediately effected and
such repatriated Net Proceeds will be applied in the manner set forth above
as if such Asset Sale have occurred on the date of repatriation.
SECTION 4.15 LIMITATION ON GUARANTEES OF COMPANY INDEBTEDNESS BY
RESTRICTED SUBSIDIARIES.
(a) The Company shall not permit any Restricted Subsidiary or
the Parent, directly or indirectly, to guarantee any Indebtedness of the
Company other than the Senior Notes (the "Other Company Indebtedness")
unless (i) such Restricted Subsidiary or the Parent contemporaneously
executes and delivers a supplemental indenture to the Indenture providing
for a guarantee of payment of the Senior Notes then outstanding by such
Restricted Subsidiary or the Parent, subject to the Intercreditor Agreement
and otherwise to the same extent as the guarantee of payment (the "Other
Company Indebtedness Guarantee") of the Other Company Indebtedness
(including waiver of subrogation, if any) and (ii) if the Other Company
45
Indebtedness guaranteed by such Restricted Subsidiary or the Parent is (A)
Senior Indebtedness, the guarantee for the Senior Notes shall be pari passu
in right of payment with the Other Company Indebtedness Guarantee and (B)
Subordinated Indebtedness, the guarantee for the Senior Notes shall be
senior in right of payment to the Other Company Indebtedness Guarantee;
provided that the foregoing will not limit or restrict guarantees issued by
Restricted Subsidiaries in respect of Indebtedness of other Restricted
Subsidiaries.
(b) Each guarantee of the Senior Notes created by a Restricted
Subsidiary or the Parent pursuant to Section 4.15(a) shall be in form and
substance reasonably satisfactory to the Trustee and shall be delivered to
the Trustee and shall provide, among other things, that it will be
automatically and unconditionally released and discharged upon (i) any
sale, exchange or transfer that complies with the terms of this Indenture
of (A) all of the Company's Capital Stock in such Restricted Subsidiary or
(B) the sale of all or substantially all of the assets of the Restricted
Subsidiary or (ii) the release or discharge of the Other Company
Indebtedness Guarantee that resulted in the creation of such guarantee of
the Senior Notes, except a discharge or release by or as a result of direct
payment under such Other Company Indebtedness Guarantee.
SECTION 4.16 DESIGNATION OF RESTRICTED AND NON-RESTRICTED SUBSIDIARIES.
(a) From and after the date of original issuance of the Senior
Notes, either the Parent or the Company may designate any existing or newly
formed or acquired Subsidiary as a Non-Restricted Subsidiary, provided that
(i) either (A) the Subsidiary to be so designated has total assets of
$1,000,000 or less or (B) immediately before and after giving effect to
such designation on a Pro Forma Basis; (1) the Company could incur $1.00 of
additional Indebtedness pursuant to Section 4.07(a) determined on a Pro
Forma Basis; and (2) no Default or Event of Default shall have occurred and
be continuing, and (ii) all transactions between the Subsidiary to be so
designated and its Affiliates remaining in effect are permitted pursuant to
Section 4.08. Any Investment made by the Company or any Restricted
Subsidiary which is redesignated from a Restricted Subsidiary to a
Non-Restricted Subsidiary shall thereafter be considered as having been a
Restricted Payment (to the extent not previously included as a Restricted
Payment) made on the day such Subsidiary is designated a Non-Restricted
Subsidiary in the amount of the greater of (i) the fair market value (as
determined by the Board of Directors of the Company in good faith) of the
Equity Interests of such Subsidiary held by the Company and its Restricted
Subsidiaries on such date, and (ii) the amount of the Investments
determined in accordance with GAAP made by the Company and any of its
Restricted Subsidiaries in such Subsidiary.
(b) A Non-Restricted Subsidiary may be redesignated as a
Restricted Subsidiary. The Company shall not, and shall not permit any
Restricted Subsidiary to, take any action or enter into any transaction or
series of transactions that would result in a Person becoming a Restricted
Subsidiary (whether through an acquisition, the redesignation of a
Non-Restricted Subsidiary or otherwise, but not including through the
creation of a new Restricted Subsidiary) unless, immediately before and
after giving effect to such action, transaction or series of transactions
on a Pro Forma Basis, (i) the Company could incur at least $1.00 of
additional Indebtedness pursuant to Section 4.07(a) and (ii) no Default or
Event of Default shall have occurred and be continuing.
46
(c) The designation of a Subsidiary as a Restricted Subsidiary
or the removal of such designation is required to be made by a resolution
adopted by a majority of the Board of Directors of the Company stating that
the Board of Directors has made such designation in accordance with this
Indenture, and the Company is required to deliver to the Trustee such
resolution together with an Officers' Certificate certifying that the
designation complies with this Indenture. Such designation shall be
effective as of the date specified in the applicable resolution, which may
not be before the date the applicable Officers' Certificate is delivered to
the Trustee.
SECTION 4.17 LIMITATION ON ISSUANCE OF PREFERRED EQUITY INTERESTS.
No Restricted Subsidiary shall issue any preferred Equity
Interests to any Person other than the Parent, the Company or another
Restricted Subsidiary.
ARTICLE 5.
SUCCESSORS
SECTION 5.01 MERGER OR CONSOLIDATION.
(a) The Company shall not consolidate or merge with or into,
or sell, lease, convey or otherwise dispose of all or substantially all of
its assets to, any Person (any such consolidation, merger or sale being a
"Disposition") unless (i) the successor corporation of such Disposition or
the corporation to which such Disposition shall have been made is a
corporation organized or existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) the successor corporation
of such Disposition or the corporation to which such Disposition shall have
been made expressly assumes the Obligations of the Company, pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee,
under the Indenture and the Senior Notes; (iii) immediately after such
Disposition, no Default or Event of Default shall exist; and (iv) the
corporation formed by or surviving any such Disposition, or the corporation
to which such Disposition shall have been made, shall (A) have Consolidated
Net Worth (immediately after the Disposition but prior to giving any pro
forma effect to purchase accounting adjustments or Restructuring Charges
resulting from the Disposition) equal to or greater than the Consolidated
Net Worth of the Company immediately preceding the Disposition, (B) be
permitted immediately after the Disposition by the terms of this Indenture
to issue at least $1.00 of additional Indebtedness determined on a Pro
Forma Basis, and (C) have a Cash Flow Coverage Ratio, for the four fiscal
quarters immediately preceding the applicable Disposition, and determined
on a Pro Forma Basis, equal to or greater than the actual Cash Flow
Coverage Ratio of the Company for such four quarter period. The limitations
in this Section 5.01(a) on the Company's ability to make a Disposition do
not restrict the Company's ability to sell less than all or substantially
all of its assets, such sales being governed by Section 4.14.
(b) The Parent shall not consolidate or merge with or into,
or sell, lease, convey or otherwise dispose of all or substantially all of
its assets to, any Person (any such consolidation, merger or sale being a
"Parent Disposition") unless (i) the successor corporation of such Parent
Disposition or the corporation to which such Parent Disposition shall have
been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia; (ii) the
successor corporation of such Parent Disposition or the corporation to
which such Parent Disposition shall have been made expressly assumes the
Obligations of the Parent, pursuant to a supplemental indenture in a form
reasonably satisfactory to the Trustee, under the Indenture and the Senior
Notes; (iii) immediately after such Parent Disposition, no Default or Event
of Default shall exist; and (iv) the corporation formed by or surviving any
such Parent Disposition, or the corporation to which such Parent
Disposition shall have been made, shall (A) have Consolidated Net Worth
(immediately after the Parent Disposition but prior to giving any pro forma
47
effect to purchase accounting adjustments or Restructuring Charges
resulting from the Parent Disposition) equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the Parent
Disposition, (B) be permitted immediately after the Parent Disposition by
the terms of this Indenture to issue at least $1.00 of additional
Indebtedness determined on a Pro Forma Basis, and (C) have a Cash Flow
Coverage Ratio, for the four fiscal quarters immediately preceding the
applicable Disposition, and determined on a Pro Forma Basis, equal to or
greater than the actual Cash Flow Coverage Ratio of the Parent for such
four quarter period. The limitations in this Section 5.01(b) on the
Parent's ability to make a Disposition do not restrict the Parent's ability
to sell less than all or substantially all of its assets, such sales being
governed by Section 4.14.
(c) Prior to the consummation of any proposed Disposition
or Parent Disposition, the Company or the Parent, as applicable, shall
deliver to the Trustee an Officers' Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed Disposition or Parent
Disposition and such supplemental indenture comply with this Indenture.
SECTION 5.02 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any Disposition, the Successor Corporation resulting
from such Disposition shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with
the same effect as if such Successor has been named as the Company herein;
provided, however, that neither the Company nor any Successor Corporation
shall be released from its Obligation to pay the principal of, premium, if
any, and accrued and unpaid interest on, the Senior Notes.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01 EVENTS OF DEFAULT.
(a) An Event of Default is:
(i) a default for 30 days in payment of interest
on the Senior Notes;
(ii) a default in payment when due of principal or
premium, if any, with respect to, the Senior
Notes;
(iii) the failure of the Company to comply with any of
its other agreements or covenants in, or
provisions of, this Indenture or the Senior
Notes outstanding or the Security Documents and
the Default continues for the period, if
applicable, and after the notice specified in
Section 6.01(b) (except for failure to comply
with Sections 3.5.1 and 3.5.3 of the Security
Agreement for which the 30-day period specified
in the Section 6.01(b) shall be 10 days);
48
(iv) a default by the Company or any Restricted
Subsidiary under any mortgage, indenture or
instrument under which there may be issued or by
which there may be secured or evidenced any
Indebtedness for money borrowed by the Company
or any Restricted Subsidiary (or the payment of
which is guaranteed by the Company or any
Restricted Subsidiary), whether such
Indebtedness or guarantee now exists or shall be
created hereafter, if (A) either (1) such
default results from the failure to pay
principal of or interest on any such
Indebtedness at or after the final maturity
thereof (after giving effect to any extensions
thereof) and such default continues for 30 days
beyond any applicable grace period or (2) as a
result of such default the maturity of such
Indebtedness has been accelerated prior to its
expressed maturity, and (B) the principal amount
of such Indebtedness, together with the
principal amount of any other such Indebtedness
in default for failure to pay principal or
interest thereon at final maturity, or because
of the acceleration of the maturity thereof,
aggregates in excess of $10,000,000;
(v) a failure by the Company or any Restricted
Subsidiary to pay final judgments (not covered
by insurance) aggregating in excess of
$10,000,000 which judgments a court of competent
jurisdiction does not rescind, annul or stay
within 45 days after their entry;
(vi) any of the Security Documents shall cease, for
any reason (other than pursuant to the terms
thereof), to be in full force and effect, or the
Company or any Guarantor shall so assert, or any
Lien created by any of the Security Documents
shall cease to be enforceable and of the same
effect and priority purported to be created
thereby (other than as a result of any action or
inaction by the Trustee or any Holder);
(vii) in existence when the Company or any Significant
Subsidiary pursuant to or within the meaning of
any Bankruptcy Law:
(1) commences a voluntary case,
(2) consents to the entry of an order for
relief against it in an involuntary case,
(3) consents to the appointment of a Custodian
of it or for all or substantially all of
its property, or
(4) makes a general assignment for the benefit
of its creditors; and
49
(viii) in existence when a court of competent
jurisdiction enters an order or decree under any
Bankruptcy Law that:
(1) is for relief against the Company or any
Significant Subsidiary in an involuntary
case,
(2) appoints a Custodian of the Company or any
Significant Subsidiary or for all or
substantially all of the property of the
Company or any Significant Subsidiary, or
(3) orders the liquidation of the Company or
any Significant Subsidiary,
and any such order or decree remains unstayed and in effect for 60 days.
(b) A Default or Event of Default under Section 6.01(a)(iii)
(other than an Event of Default arising under Section 5.01 which shall be
an Event of Default with the notice but without the passage of time
specified in this Section 6.01(b)) is not an Event of Default under this
Indenture until the Trustee or the Holders of at least 25% in principal
amount of the Senior Notes then outstanding notify the Company of the
Default and the Company does not cure the Default within 30 days after
receipt of the notice. The notice must specify the Default, demand that it
be remedied, and state that the notice is a "Notice of Default."
(c) In the case of any Event of Default pursuant to
Section 6.01(a) or Section 6.01(b) occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company
would have to pay if the Company then had elected to redeem the Senior
Notes pursuant to paragraph 5 of the Senior Notes, an equivalent premium
shall also become and be immediately due and payable to the extent
permitted by law, anything contained in this Indenture or in the Senior
Notes to the contrary notwithstanding.
(d) The Trustee shall not be charged with knowledge of any
Default or Event of Default unless written notice thereof shall have been
given to a Trust Officer at the Corporate Trust Office of the Trustee by
the Company or any other Person.
SECTION 6.02 ACCELERATION.
(a) Upon the occurrence of an Event of Default (other than
an Event of Default under Section 6.01(a)(vii) or (viii)), the Trustee or
the holders of at least 25% in principal amount of the then outstanding
Senior Notes may declare all Senior Notes (i) to be due and payable
immediately and, upon such declaration, the principal of, premium, if any,
and any accrued and unpaid interest on, all Senior Notes shall be due and
payable immediately; or (ii) if there are any amounts outstanding under the
Credit Facility, to be due and payable immediately upon the first to occur
of (A) an acceleration under the Credit Facility or (B) five business days
after receipt by the Company and the Representative under the Credit
Facility of such notice of acceleration but only if such Event of Default
is then continuing; provided, however, that if an Event of Default arises
under Section 6.01(a)(vii) or (viii), the principal of, premium, if any,
and any accrued and unpaid interest on, all Senior Notes, shall ipso facto
become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders of Senior Notes.
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(b) The holders of a majority in principal amount of the Senior
Notes then outstanding, by notice to the Trustee, may rescind any
declaration of acceleration of such Senior Notes and its consequences (if
the rescission would not conflict with any judgment or decree) if all
existing Events of Default (other than the nonpayment of principal of or
interest on such Senior Notes that shall have become due by such
declaration) shall have been cured or waived.
(c) If there has been a declaration of acceleration of the
Senior Notes because an Event of Default under Section 6.01(a)(iv) has
occurred and is continuing, such declaration of acceleration shall be
automatically annulled if the holders of the Indebtedness described in
Section 6.01(a)(iv) have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 Business Days thereof and if (i) the
annulment of such acceleration would not conflict with any judgment or
decree of a court of competent jurisdiction, (ii) all existing Events of
Default, except non-payment of principal, premium or interest that shall
have become due solely because of the acceleration, have been cured or
waived, and (iii) the Company has delivered an Officers' Certificate to the
Trustee to the effect of clauses (i) and (ii) above.
SECTION 6.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of principal
of, premium, if any, or any accrued and unpaid interest on, the Senior
Notes or to enforce the performance of any provision of the Senior Notes or
this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Senior Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder in exercising
any right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of
Default. All remedies are cumulative to the extent permitted by law.
SECTION 6.04 WAIVER OF PAST DEFAULTS.
The holders of a majority in aggregate principal amount
of the Senior Notes then outstanding by notice to the Trustee may on behalf
of all Holders of Senior Notes waive any existing Default or Event of
Default under this Indenture and its consequences, except a continuing
Default in the payment of the principal of, premium, if any, and interest
on, such Senior Notes, which may only be waived with the consent of each
Holder of Senior Notes affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured for every purpose of this Indenture; provided that no
such waiver shall extend to any subsequent or other Default or impair any
right consequent thereon.
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SECTION 6.05 CONTROL BY MAJORITY.
Subject to Section 7.01(e), the Holders of a majority in
principal amount of the then outstanding Senior Notes may direct the time,
method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it by this
Indenture. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines may be
unduly prejudicial to the rights of other Holders or would involve the
Trustee in personal liability.
SECTION 6.06 LIMITATION ON SUITS.
A Holder may pursue a remedy with respect to this
Indenture or the Senior Notes only if (i) the Holder gives to the Trustee
notice of a continuing Event of Default; (ii) the Holders of at least 25%
in principal amount of the then outstanding Senior Notes make a request to
the Trustee to pursue the remedy; (iii) such Holder or Holders offer to the
Trustee indemnity satisfactory to the Trustee against any loss, liability
or expense; (iv) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of indemnity; and (v)
during such 60-day period the Holders of a majority in principal amount of
the then outstanding Senior Notes do not give the Trustee a direction
inconsistent with the request.
A Holder may not use this Indenture to prejudice the
rights of another Holder or to obtain a preference or priority over another
Holder.
Holders of the Senior Notes may not enforce this
Indenture, except as provided herein.
SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of principal of, premium, if
any, and any accrued and unpaid interest on, a Senior Note, on or after a
respective due date expressed in the Senior Note, or to bring suit for the
enforcement of any such payment on or after such respective date, shall not
be impaired or affected without the consent of the Holder.
SECTION 6.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or
(ii) occurs and is continuing, the Trustee is authorized to recover
judgment in its own name and as trustee of an express trust against the
Company for (i) the principal, premium and interest remaining unpaid on the
Senior Notes, (ii) interest on overdue principal and premium, if any, and,
to the extent lawful, interest, and (iii) such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel ("Trustee Expenses").
SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable to have the claims of
the Trustee (including any claim for Trustee Expenses) and the Holders
allowed in any Insolvency or Liquidation Proceeding or other judicial
proceeding relative to the Company (or any other obligor upon the Senior
Notes), its creditors or its property and shall be entitled and empowered
to collect, receive and distribute to Holders any money or other property
payable or deliverable on any such claims and each Holder authorizes any
Custodian in any such Insolvency or Liquidation Proceeding or other
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judicial proceeding to make such payments to the Trustee, and if the
Trustee shall consent to the making of such payments directly to the
Holders any such Custodian is hereby authorized to make such payments
directly to the Holders, and to pay to the Trustee any amount due to it
hereunder for Trustee Expenses, and any other amounts due the Trustee under
Section 7.07. To the extent that the payment of any such Trustee Expenses,
and any other amounts due the Trustee under Section 7.07 out of the estate
in any such proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and all
distributions, dividends, money, securities and other properties which the
Holders may be entitled to receive in such proceeding, whether in
liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Senior Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any Insolvency or
Liquidation Proceeding.
SECTION 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the
Senior Notes for principal, premium and
interest, ratably, without preference or
priority of any kind, according to the amounts
due and payable on the Senior Notes for
principal, premium and interest, respectively;
and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for
any payment to Holders.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as a Trustee, a court in its discretion may require
the filing by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in
the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section does not apply to a suit
by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by
Holders of more than 10% in principal amount of the then outstanding Senior
Notes.
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ARTICLE 7.
TRUSTEE
SECTION 7.01 DUTIES OF TRUSTEE.
(a) If an Event of Default occurs (and has not been cured) the
Trustee shall (i) exercise the rights and powers vested in it by this
Indenture, and (ii) use the same degree of care and skill in exercising
such rights and powers as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee's duties shall be determined solely
by the express provisions of this Indenture and
the Trustee need perform only those duties that
are specifically set forth in this Indenture and
the Security Documents and no others, and no
implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the 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 and the
Security Documents. However, the Trustee shall
examine the certificates and opinions to
determine whether they conform to this
Indenture's and the Security Document's
requirements.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
Section 7.01(b);
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good
faith in accordance with a direction it receives
pursuant to Section 6.05.
(d) Whether or not expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), (c), (e) and (f) of this Section and Section 7.02.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall
be under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders unless such Holders shall have
offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
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(f) The Trustee shall not be liable for interest on any money
it receives except as the Trustee may agree in writing with the Company.
Money the Trustee holds in trust need not be segregated from other funds
except to the extent required by law.
(g) The Trustee is hereby authorized and directed to enter
into the Intercreditor Agreement upon execution thereof by the other
parties thereto.
SECTION 7.02 RIGHTS OF TRUSTEE.
(a) In connection with the Trustee's rights and duties under
this Indenture, the Trustee may rely on any document it believes to be
genuine and to have been signed or presented by the proper Person. The
Trustee shall not be obligated to investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting under
this Indenture, it may reasonably require an Officers' Certificate or an
Opinion of Counsel, or both. The Trustee shall not be liable for any action
it takes or omits to take in good faith in reliance on such Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel and
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any Agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes
or omits to take, except to the extent that such action or omission to act
constitutes negligence or willful misconduct on the part of the Trustee.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be
sufficient if signed by an Officer.
(f) Except with respect to Section 4.01 hereof, the Trustee
shall have no duty to inquire as to the performance of the Company's
covenants in Article 4 hereof. In addition, the Trustee shall not be deemed
to have knowledge of any Default or Event of Default except (i) any Event
of Default occurring pursuant to Sections 6.01(a)(i), 6.01(a)(ii) and 4.01
or (ii) any Default or Event of Default of which the Trustee shall have
received written notification or obtained actual knowledge.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee may, in its discretion, make such further inquiry
or investigation into such facts or matters as it may see fit and if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company
personally or by agent or attorney.
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SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Senior Notes and may otherwise deal with the
Company or an Affiliate with the same rights it would have if it were not
Trustee. However, if the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the Commission for
permission to continue as Trustee or resign. Any Agent may do the same with
like rights. The Trustee is also subject to Sections 7.10 and 7.11.
SECTION 7.04 TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Senior Notes, it shall not be accountable for the Company's use of the
proceeds from the Senior Notes or for any money paid to the Company or upon
the Company's direction under any provisions hereof, it shall not be
responsible for the use or application of any money any Paying Agent other
than the Trustee receives, and it shall not be responsible for any
statement or recital herein or any statement in the Senior Notes or any
other document furnished or issued in connection with the sale of the
Senior Notes or pursuant to this Indenture, other than its certificate of
authentication.
SECTION 7.05 NOTICE TO HOLDERS OF DEFAULTS AND EVENTS OF DEFAULT.
If a Default or Event of Default occurs and is continuing
and if it is actually known to the Trustee, the Trustee shall mail to
Holders a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment on
any Senior Note (including any failure to redeem Senior Notes called for
redemption or any failure to purchase Senior Notes tendered pursuant to an
Offer that are required to be purchased by the terms of this Indenture),
the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in
the Holders' interests.
SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15 beginning with May 15,
2003, the Trustee shall mail to Holders a brief report dated as of such
reporting date that complies with section 313(a) of the TIA (but if no
event described in section 313(a) of the TIA has occurred within the twelve
months preceding the reporting date, no report need be transmitted). The
Trustee also shall comply with section 313(b)(2) of the TIA. The Trustee
shall also transmit by mail all reports as required by section 313(c) of
the TIA.
Commencing at the time this Indenture is qualified under
the TIA, a copy of each report at the time of its mailing to Holders shall
be filed with the SEC and each national securities exchange on which the
Senior Notes are listed. The Company shall notify the Trustee when the
Senior Notes are listed on any national securities exchange.
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SECTION 7.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee (in its capacities
as Trustee, Paying Agent and/or Registrar) from time to time reasonable
compensation for its services hereunder. The Trustee's compensation shall
not be limited by any law on compensation of a trustee of an express trust.
The Company shall reimburse the Trustee upon request for all reasonable
disbursements, advances, fees and expenses it incurs or makes in addition
to the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents
and counsel.
The Company shall indemnify and hold harmless the Trustee
(in its capacities as Trustee, Paying Agent and/or Registrar) against any
and all losses, liabilities or expenses the Trustee incurs arising out of
or in connection with the acceptance or administration of its duties under
this Indenture, except as set forth below. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Company shall not relieve the Company of its
Obligations hereunder. The Company shall defend the claim and the Trustee
shall reasonably cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The Company's Obligations under this Section 7.07 shall
survive the satisfaction and discharge of this Indenture.
The Company need not reimburse any expense or indemnify
against any loss or liability the Trustee incurs which is solely
attributable to its negligence or bad faith.
To secure the Company's payment of its Obligations in
this Section, the Trustee shall have a Lien prior to the Senior Notes on
all money or property the Trustee holds or collects. Such Lien shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 6.01(a)(vii) or (viii)
occurs, the expenses and the compensation for the services (including the
fees and expenses of its agents and counsel) are intended to constitute
administrative expenses under any Bankruptcy Law.
SECTION 7.08 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the successor
Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign and be discharged from the trust
hereby created by so notifying the Company. The Holders of a majority in
principal amount of the then outstanding Senior Notes may remove the
Trustee by so notifying the Trustee and the Company. The Company may remove
the Trustee if:
57
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee
under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, the Company shall promptly
appoint a successor Trustee, provided that the Holders of a majority in
principal amount of the then outstanding Senior Notes may appoint a
successor Trustee to replace any successor Trustee appointed by the
Company. Any Trustee that resigns or is removed hereunder shall also resign
or be removed under the Security Documents and if and when a successor
Trustee replaces the Trustee appointed hereunder, such successor Trustee
shall also replace the Trustee under the Security Documents.
If a successor Trustee does not take office within 60
days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or the Holders of at least 10% in principal amount of
the then outstanding Senior Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Holder may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its appointment to Holders. The retiring Trustee shall promptly transfer
all property it holds as Trustee to the successor Trustee, provided all
sums owing to the retiring Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07. Notwithstanding replacement of the
Trustee pursuant to this Section 7.08, the Company's obligations under
Section 7.07 shall continue for the retiring Trustee's benefit with respect
to expenses and liabilities it incurred prior to being replaced.
SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the successor corporation without any further act
shall be the successor Trustee.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times (i) be a corporation
organized and doing business under the laws of the United States of
America, of any state thereof, or the District of Columbia authorized under
such laws to exercise corporate trustee power, (ii) be subject to
supervision or examination by federal or state authority, (iii) have a
combined capital and surplus of at least $80,000,000 as set forth in its
most recent published annual report of condition, and (iv) satisfy the
requirements of sections 310(a)(1), (2) and (5) of the TIA. The Trustee is
subject to section 310(b) of the TIA.
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SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to section 311(a) of the TIA,
excluding any creditor relationship listed in section 311(b) of the TIA. A
Trustee who has resigned or been removed shall be subject to section 311(a)
of the TIA to the extent indicated therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.01 DISCHARGE OF LIABILITY ON SENIOR NOTES; DEFEASANCE.
(a) When (i) the Company delivers to the Trustee all
outstanding Senior Notes (other than Senior Notes replaced pursuant to
Section 2.07) for cancellation, or (ii) all outstanding Senior Notes have
become due and payable and the Company irrevocably deposits with the
Trustee funds sufficient to pay at maturity all outstanding Senior Notes,
including interest, premium thereon (other than Senior Notes replaced
pursuant to Section 2.07), and if in either case the Company, the Parent or
the Guarantor Subsidiaries pays all other sums payable under this Indenture
by the Company, then this Indenture shall, subject to Sections 8.01(c) and
8.06, cease to be of further effect.
(b) Subject to Sections 8.01(c), 8.02, and 8.06, each of the
Company, the Parent and the Subsidiary Guarantors at any time may terminate
(i) all of their respective obligations under the Senior Notes and this
Indenture ("legal defeasance option") or (ii) their respective obligations
under Sections 4.02, 4.03, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.13,
4.14, 4.15, 4.16 and 4.17, and the operation of Sections 5.01(a)(iii),
5.01(a)(iv), or 6.01(a)(iii) through (a)(vi) ("covenant defeasance
option"). The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option,
payment of the Senior Notes may not be accelerated because of an Event of
Default with respect thereto. If the Company exercises its covenant
defeasance option, payment of the Senior Notes shall not be accelerated
because of an Event of Default specified in 6.01(a)(iii) through (a)(vi) or
because of the Company's failure to comply with Section 5.01(a)(iii) and
5.01(a)(iv).
Upon satisfaction of the conditions set forth herein and
upon the Company's request (and at the Company's expense), the Trustee
shall acknowledge in writing the discharge of those obligations that the
Company has terminated.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 4.01, 4.04, 7.07,
7.08, 8.04, 8.05 and 8.06, and the Trustee's and the Paying Agent's
obligations in Section 8.04 shall survive until the Senior Notes have been
paid in full. Thereafter, the Company's obligations in Sections 7.07 and
8.05 and the Company's, the Trustee's and the Paying Agent's obligations in
Section 8.04 shall survive.
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SECTION 8.02 CONDITIONS TO DEFEASANCE.
The Company may exercise its legal defeasance option or its
covenant defeasance option only if:
(1) the Company irrevocably deposits in trust
the "defeasance trust") with the Trustee
money or U.S. Government Obligations
sufficient for the payment in full of the
principal of, premium, if any, and any
accrued and unpaid interest on, the Senior
Notes then outstanding, as of the maturity
date, the redemption date or the Purchase
Date, as the case may be;
(2) the Company delivers to the Trustee a
certificate from a nationally recognized
firm of independent accountants or
investment bankers expressing their opinion
that the payments of principal and interest
when due and without reinvestment of the
deposited U.S. Government Obligations plus
any deposited money without investment will
provide cash at such times and in such
amounts as will be sufficient to pay when
due principal of, premium, if any, and any
accrued and unpaid interest on, all the
Senior Notes to maturity or redemption, as
the case may be;
(3) since the Company's irrevocable deposit
provided for in Section 8.02(1), 91 days
have passed;
(4) no Default has occurred and is continuing
on the date of such deposit and after
giving effect to it;
(5) the deposit does not constitute a default
under any other agreement binding on the
Company;
(6) the Company delivers to the Trustee an
Opinion of Counsel to the effect that
the trust resulting from the deposit
does not constitute, or is qualified
as, a regulated investment company
under the Investment Company Act of
1940, as amended;
(7) in the case of the legal defeasance option,
the Company shall have delivered to the
Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there
has been published by, the Internal Revenue
Service a ruling or (ii) under applicable
federal income tax law, in either case, to
the effect that, and based thereon such
Opinion of Counsel shall confirm that,
the Holders will not recognize income, gain
or loss for federal income tax purposes as
a result of such deposit and defeasance and
will be subject to federal income tax on
the same amount, in the same manner and at
the same times as would have been the case
if such defeasance had not occurred;
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(8) in the case of the covenant defeasance
option, the Company shall have delivered
to the Trustee an Opinion of Counsel to the
effect that the Holders will not recognize
income, gain or loss for federal income
tax purposes as a result of such deposit
and covenant defeasance and will be subject
to federal income tax on the same amount,
in the same manner and at the same times as
would have been the case if such covenant
defeasance had not occurred (and, in the
case of legal defeasance only, such opinion
of counsel must be based on a ruling of the
Internal Revenue Service or other change in
applicable federal income tax law); and
(9) the Company delivers to the Trustee an
Officers' Certificate and an Opinion of
Counsel, each stating that all conditions
precedent to the defeasance and discharge
of the Senior Notes contemplated by this
Article 8 have been satisfied.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption or purchase of Senior Notes at a
future date in accordance with Article 3.
SECTION 8.03 APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to this Article 8. It shall apply
the deposited money and the money from U.S. Government Obligations through
the Paying Agent and in accordance with this Indenture to the payment of
principal of, premium, if any, and any accrued and unpaid interest on, the
Senior Notes.
SECTION 8.04 REPAYMENT TO THE COMPANY.
After the Senior Notes have been paid in full, the Trustee
and the Paying Agent shall promptly turn over to the Company any excess money
or securities they hold.
The Trustee and the Paying Agent shall pay to the Company
upon written request by the Company any money they hold for the payment of
principal, premium or interest that remains unclaimed for 1 year after the
date upon which such payment shall have become due; provided, however, that
the Company shall have either caused notice of such payment to be mailed to
each Holder entitled thereto no less than 30 days prior to such repayment
or within such period shall have published such notice in a financial
newspaper of widespread circulation published in The City of New York
(including, without limitation, The Wall Street Journal). After payment to
the Company, Holders entitled to the money must look to the Company for
payment as general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.
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SECTION 8.05 INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Company shall pay and shall indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against deposited U.S.
Government Obligations or the principal and interest received on such U.S.
Government Obligations.
SECTION 8.06 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money
or U.S. Government Obligations in accordance with this Article 8 by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Senior
Notes shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of principal of, premium, if any, and any accrued and unpaid interest
on, any Senior Notes because of the reinstatement of its Obligations, the
Company shall be subrogated to the Holders' rights to receive such payment from
the money or U.S. Government Obligations the Trustee or Paying Agent holds.
ARTICLE 9.
AMENDMENTS
SECTION 9.01 AMENDMENTS AND SUPPLEMENTS PERMITTED WITHOUT CONSENT OF
HOLDERS.
Notwithstanding Section 9.02, the Company, the Parent,
the Guarantor Subsidiaries and the Trustee may amend or supplement this
Indenture or the Senior Notes without the consent of any Holder (a) to cure
any ambiguity, defect or inconsistency; (b) to provide for uncertificated
Senior Notes in addition to or in place of certificated Senior Notes; (c)
to provide for the assumption by a Successor Corporation of the Company's
Obligations to the Holders in the event of a Disposition pursuant to
Article 5; (d) to comply with SEC's requirements to effect or maintain the
qualification of this Indenture under the TIA; (e) to provide for
additional Guarantees with respect to the Senior Notes; or (f) to make any
change that does not materially adversely affect any Holder's legal rights
under this Indenture.
Upon the Company's request, after receipt by the Trustee
of a resolution of the Board of Directors authorizing the execution of any
amended or supplemental indenture, the documents described in Section 9.06,
the Trustee shall join with the Company in the execution of any amended or
supplemental indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations
that may be contained in any such amended or supplemental indenture, but
the Trustee shall not be obligated to enter into an amended or supplemental
indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.
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SECTION 9.02 AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS.
Subject to Section 6.07, the Company, the Parent, the
Guarantor Subsidiaries and the Trustee may amend or supplement this
Indenture or the Senior Notes with the written consent of the Holders of at
least a majority in principal amount of the then outstanding Senior Notes
(including consents obtained in connection with a tender offer or exchange
offer for the Senior Notes). Subject to Sections 6.04 and 6.07, the Holders
of a majority in principal amount of the Senior Notes then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for the Senior Notes) may also waive any existing Default or Event of
Default (other than a payment Default) and its consequences or compliance
in a particular instance by the Company with any provision of this
Indenture or the Senior Notes.
Upon the Company's request and after receipt by the
Trustee of a resolution of the Board of Directors authorizing the execution
of any supplemental indenture, evidence of the Holders' consent, and the
documents described in Section 9.06, the Trustee shall join with the
Company in the execution of such amended or supplemental indenture unless
such amended or supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but not be obligated to, enter into such
amended or supplemental indenture.
It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment or waiver under this Section becomes
effective, the Company shall mail to each Holder affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
indenture or waiver. Without the consent of each Holder affected, an
amendment, supplement or waiver under this Section may not (1) reduce the
principal amount of Senior Notes whose Holders must consent to an
amendment, supplement or waiver; (2) reduce the rate of or change the time
for payment of interest, including default interest as set forth in Section
4.01, on any Senior Note or alter the redemption or purchase provisions
with respect thereto or the price at which the Company is required to offer
to purchase any Senior Note; (3) reduce the principal of or change the
fixed maturity of any Senior Note; (4) make any Senior Note payable in
money other than that stated in the Senior Note; (5) make any change in
Section 6.04 or 6.07 or in this sentence of this Section 9.02; or (6) waive
a default in the payment of the principal of, or premium, if any, or any
accrued and unpaid interest on, or redemption or purchase payment with
respect to, any Senior Note (except a rescission of acceleration of the
Senior Notes by the Holders of at least a majority in aggregate principal
amount of the then outstanding Senior Notes and a waiver of the payment
default that resulted from such acceleration).
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SECTION 9.03 COMPLIANCE WITH TIA.
Every amendment or supplement to this Indenture or the
Senior Notes shall be set forth in an amended supplemental indenture that
complies with the TIA as then in effect.
SECTION 9.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes
effective, a consent to it by a Holder of a Senior Note is a continuing
consent by the Holder and every subsequent Holder of a Senior Note or
portion of a Senior Note that evidences the same Indebtedness as the
consenting Holder's Senior Note, even if notation of the consent is not
made on any Senior Note. However, any such Holder or subsequent Holder may
revoke the consent as to his or her Senior Note or portion of a Senior Note
if the Trustee receives the notice of revocation before the date on which
the Trustee receives an Officer's Certificate certifying that the Holders
of the requisite principal amount of Senior Notes have consented to the
amendment or waiver.
The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders of Senior Notes
entitled to consent to any amendment or waiver. If a record date is fixed,
then, notwithstanding the provisions of the immediately preceding
paragraph, those Persons who were Holders of Senior Notes at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to consent to such amendment or waiver or to revoke any consent
previously given, whether or not such Persons continue to be Holders of
Senior Notes after such record date. No consent shall be valid or effective
for more than 90 days after such record date unless consents from Holders
of the principal amount of Senior Notes required hereunder for such
amendment or waiver to be effective shall have also been given and not
revoked within such 90-day period.
After an amendment or waiver becomes effective it shall
bind every Holder, unless it is of the type described in any of clauses (1)
through (6) of Section 9.02. In such case, the amendment or waiver shall
bind each Holder who has consented to it and every subsequent Holder of a
Senior Note that evidences the same debt as the consenting Holder's Senior
Note.
SECTION 9.05 NOTATION ON OR EXCHANGE OF SENIOR NOTES.
The Trustee may (at the Company's expense) place an
appropriate notation about an amendment, supplement or waiver on any Senior
Note thereafter authenticated. The Company in exchange for all Senior Notes
may issue and the Trustee shall authenticate new Senior Notes that reflect
the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new
Senior Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06 TRUSTEE PROTECTED.
The Trustee shall sign any amendment or supplemental
indenture authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing
such amendment or supplemental indenture, the Trustee shall be entitled to
receive and, subject to Section 7.01, shall be fully protected in relying
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upon, an Officers' Certificate and Opinion of Counsel as conclusive
evidence that such amendment or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that
it will be valid and binding upon the Company in accordance with its terms.
The Company may not sign an amendment or supplemental indenture until the
Board of Directors approves it.
ARTICLE 10.
COLLATERAL AND SECURITY AND GUARANTEES
SECTION 10.01 COLLATERAL DOCUMENTS.
The due and punctual payment of the principal and
premium, if any, of, and interest on, the Senior Notes when and as the same
shall be due and payable, shall be secured as provided in the Security
Documents.
The Company shall, and shall cause the Parent and each of
the Guarantor Subsidiaries to, do or cause to be done all such acts and things
as may be necessary or proper, or as may be required by the provisions of the
Security Documents, to assure and confirm to the Trustee the security interest
in the Collateral contemplated hereby and by the Security Documents, as from
time to time constituted, so as to render the same available for the security
and benefit of this Indenture and of the Senior Notes secured hereby, according
to the intent and purposes herein and therein expressed. The Company shall, and
shall cause the Parent and each Guarantor Subsidiary to, take, upon request of
the Trustee, any and all actions required to cause the Security Documents to
create and maintain, as security for the Obligations under this Indenture, the
Senior Notes and the Security Documents, valid and enforceable, perfected
(except as expressly provided herein or therein) Liens in and on all the
Collateral, in favor of the Trustee, superior and prior to the rights of all
third Persons, and subject to no other Liens, other than provided herein or
therein; provided that the Trustee's Lien shall be subordinate and junior in
priority to the Liens of the Representative and the other lenders under the
Credit Facility pursuant to the terms of the Intercreditor Agreement and the
other Security Documents.
SECTION 10.02 ADDITIONAL COLLATERAL.
The Company shall, and shall cause the Parent and each
Guarantor Subsidiary to, grant to the Trustee a valid security interest in
substantially all of the property and assets of the Company, the Parent and
the Guarantor Subsidiaries, other than the Excluded Assets, and to execute and
deliver all documents and opinions and to take all action necessary or
desirable to perfect and protect such a security interest in favor of the
Trustee, subject only to the Liens of the Representative and the other lenders
under the Credit Facility and subject to Permitted Liens.
SECTION 10.03 RELEASE OF COLLATERAL.
(a) Collateral shall be released from the Liens created by the
Security Documents from time to time at the sole cost and expense of the
Company:
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(i) upon payment in full of the Senior Notes and all
other Obligations under this Indenture, the Senior
Notes and the Security Documents then due and owing,
(ii) unless an Event of Default shall have occurred
and be continuing, upon the (A) sale or other
disposition of such Collateral pursuant to an
Asset Sale made in accordance with Section 4.14
hereof, (B) sale or other disposition of such
Collateral that falls under one of the exceptions
to the definition of Asset Sale, or (C) transfer or
exchange of such Collateral in the ordinary course
of business,
(iii) upon the written consent of the Holders of not
less than two-thirds of the aggregate principal
amount of the then outstanding Senior Notes
(including consents obtained in connection with
a tender offer or exchange offer for Senior
Notes),
(iv) as required pursuant to the terms of the
Intercreditor Agreement or any other Security
Document, or
(v) upon a Legal Defeasance;
provided, that the Trustee shall not release any Lien on any Collateral unless
and until it shall have received an Officers' Certificate. Upon compliance with
the above, the Trustee shall execute, deliver or acknowledge any necessary or
proper instruments of termination, satisfaction or release to evidence the
release of any Collateral permitted to be released pursuant to this Indenture
or the Security Documents.
(b) The release of any Collateral from the terms of the Security
Documents shall not be deemed to impair the security under this Indenture in
contravention of the provisions hereof and of the Security Documents if and
to the extent the Collateral is released pursuant to the terms of this
Indenture and the Security Documents.
SECTION 10.04 AUTHORIZATION OF ACTIONS TO BE TAKEN BY THE TRUSTEE UNDER
THE SECURITY DOCUMENTS.
Subject to the terms of the Intercreditor Agreement, the
Trustee may, in its sole discretion and without the consent of the Holders,
on behalf of the Holders, take all actions it deems necessary or
appropriate in order to (a) enforce any of the terms of the Security Documents
and (b) collect and receive any and all amounts payable in respect of the
Obligations of the Company, the Parent and the Guarantor Subsidiaries hereunder
and under the Senior Notes, and the Security Documents. Subject to the terms of
the Intercreditor Agreement, the Trustee shall have the power to institute and
to maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation
of the Security Documents or this Indenture, and such suits and proceedings as
the Trustee may deem expedient to preserve or protect its interest and the
interests of the Holders in the Collateral.
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SECTION 10.05 PARENT GUARANTEE.
Subject to the provisions of this Article 10, Parent hereby
fully and unconditionally guarantees, to each Holder of a Senior Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity or enforceability of this
Indenture, the Senior Notes or the obligations of the Company under this
Indenture or the Senior Notes, that: (i) the principal of, premium (if any) and
interest on the Senior Notes will be paid in full when due, whether at maturity
by acceleration or otherwise, and interest on the overdue principal and premium
(if any) and (to the extent permitted by law)interest on the Senior Notes will
be promptly paid in full; (ii) all other obligations of the Company to the
Holders or the Trustee under this Indenture or the Senior Notes will be
promptly paid in full or performed, all in accordance with the terms of this
Indenture and the Senior Notes; and (iii) in case of any extension of time in
payment or renewal of any Senior Notes or any of such other obligations, they
will be paid in full when due or performed in accordance with the terms of the
extension or renewal, whether at maturity, by acceleration or otherwise.
Failing payment when due of any amount so guaranteed, or failing performance of
any other obligation of the Company to the Holders or the Trustee, for whatever
reason, Parent will be obligated to pay, or to perform or cause the performance
of, the same before such failure becomes an Event of Default. Parent agrees
that this is a guarantee of payment not a guarantee of collection.
Parent hereby agrees that its obligations with regard to this
Parent Guarantee shall be unconditional, irrespective of the validity,
regularity or enforceability of the Senior Notes or the obligations of the
Company under this Indenture, the absence of any action to enforce the same,
the recovery of any judgment against the Company or any other obligor with
respect to this Indenture, the Senior Notes or the obligations of the Company
under this Indenture or the Senior Notes, any action to enforce the same or any
other circumstances (other than complete performance) which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. Parent
further, to the extent permitted by law, hereby waives (a) demand, protest and
notice of any kind, (b) any defense that may arise by reason of the incapacity,
lack of authority, death or disability of any other person or the failure of
the Trustee, the Holders or the Company (each a "Benefitted Party") to file or
enforce a claim against the estate (in administration, bankruptcy or any other
proceeding) of any other person, (c) notice of the existence, creation or
incurring of any new or additional Debt or obligation, (d) any right to require
a proceeding first against the Company or right to require the prior
disposition of the assets of the Company to meet its obligations, (e) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than
that of the principal, (f) any defense arising because of a Benefitted Party's
election, in any proceeding instituted under Bankruptcy Law, of the application
of 11 U.S.C. Section 1111(b)(2) or (g) any defense based on any borrowing or
grant of a security interest under 11 U.S.C. Section 364. Parent hereby
covenants that its Parent Guarantee will not be discharged except by complete
performance of the obligations contained in the Senior Notes, the Parent
Guarantee and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or Parent, or any custodian acting in
relation to either the Company or Parent, any amount paid by the Company or
Parent to the Trustee or such Holder, the Parent Guarantee, to the extent
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theretofore discharged, shall be reinstated in full force and effect. Parent
agrees that it will not be entitled to any right of subrogation in relation to
the Holders in respect of any obligations guaranteed hereby until payment in
full of all obligations guaranteed hereby. Parent agrees that, as between it,
on the one hand, and the Holders of Senior Notes and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 10 hereof for the purposes hereof, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (y) in the event of any acceleration
of such obligations as provided in Article 10 hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by
Parent for the purpose of its Parent Guarantee.
Parent hereby agrees that by virtue of Parent's execution
and delivery of this Indenture, Parent shall be deemed to have signed on
each Senior Note issued hereunder the notation of the Parent Guarantee set
forth on the forms of the Senior Note attached hereto as Exhibit A and
Exhibit B.
SECTION 10.06 LIMITATION ON PARENTS LIABILITY.
Parent acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture. Parent
and by its acceptance hereof, each beneficiary hereof, hereby confirms that it
is its intention that the Parent Guarantee not constitute a fraudulent transfer
or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal,
state or foreign law to the extent applicable to the Parent Guarantee. To
effectuate the foregoing intention, each such person hereby irrevocably agrees
that the obligation of Parent under the Parent Guarantee under this Article 10
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other (contingent or otherwise) liabilities of Parent
that are relevant under such laws, result in the obligations of Parent in
respect of such maximum amount not constituting a fraudulent conveyance.
SECTION 10.07 SUBSIDIARY GUARANTEES.
Subject to the provisions of this Article 10, each Guarantor
Subsidiary hereby fully and unconditionally guarantees, jointly and severally,
to each Holder of a Senior Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity or
enforceability of this Indenture, the Senior Notes or the obligations of the
Company under this Indenture or the Senior Notes, that: (i) the principal of,
premium (if any) and interest on the Senior Notes will be paid in full when
due, whether at maturity by acceleration or otherwise, and interest on the
overdue principal and premium (if any) and (to the extent permitted by law)
interest on the Senior Notes will be promptly paid in full; (ii) all other
obligations of the Company to the Holders or the Trustee under this Indenture
or the Senior Notes will be promptly paid in full or performed, all in
accordance with the terms of this Indenture and the Senior Notes; and (iii)
in case of any extension of time in payment or renewal of any Senior Notes or
any of such other obligations, they will be paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at maturity,
by acceleration or otherwise. Failing payment when due of any amount so
guaranteed, or failing performance of any other obligation of the Company to
the Holders or the Trustee, for whatever reason, each Guarantor
Subsidiary will be obligated to pay, or to perform or cause the performance
of, the same before such failure becomes an Event of Default. Each Guarantor
Subsidiary agrees that this is a guarantee of payment not a guarantee of
collection.
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Each Guarantor Subsidiary hereby agrees that its obligations
with regard to this Subsidiary Guarantee shall be unconditional, irrespective
of the validity, regularity or enforceability of the Senior Notes or the
obligations of the Company under this Indenture, the absence of any action to
enforce the same, the recovery of any judgment against the Company or any other
obligor with respect to this Indenture, the Senior Notes or the obligations of
the Company under this Indenture or the Senior Notes, any action to enforce the
same or any other circumstances (other than complete performance) which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each Guarantor Subsidiary further, to the extent permitted by law, hereby
waives (a) demand, protest and notice of any kind, (b) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of
any other person or the failure of any Benefitted Party to file or enforce a
claim against the estate (in administration, bankruptcy or any other
proceeding) of any other person, (c) notice of the existence, creation or
incurring of any new or additional Indebtedness or obligation, (d) any right to
require a proceeding first against the Company or right to require the prior
disposition of the assets of the Company to meet its obligations, (e) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than
that of the principal, (f) any defense arising because of a Benefitted Party's
election, in any proceeding instituted under Bankruptcy Law, of the application
of 11 U.S.C. Section 1111(b)(2) or (g) any defense based on any borrowing or
grant of a security interest under 11 U.S.C. Section 364. Each Guarantor
Subsidiary hereby covenants that its Subsidiary Guarantee will not be
discharged except by complete performance of the obligations contained in the
Senior Notes, the Subsidiary Guarantee and this Indenture.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Guarantor Subsidiary, or any
custodian acting in relation to either the Company or any Guarantor Subsidiary,
any amount paid by the Company or any Guarantor Subsidiary to the Trustee or
such Holder, the Subsidiary Guarantees, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor Subsidiary agrees
that it will not be entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until payment in full
of all obligations guaranteed hereby. Each Guarantor Subsidiary agrees that,
as between it, on the one hand, and the Holders of Senior Notes and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 10 hereof for the purposes
hereof, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any acceleration of such obligations as provided in Article 10
hereof, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor Subsidiary for the purpose of its
Subsidiary Guarantee.
Each Guarantor Subsidiary hereby agrees that by virtue of
its execution and delivery of this Indenture, it shall be deemed to have
signed on each Senior Note issued hereunder the notation of the Subsidiary
Guarantee set forth on Exhibit D.
SECTION 10.08 LIMITATION ON THE GUARANTOR SUBSIDIARIES' LIABILITY.
Each Guarantor Subsidiary acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated by
this Indenture. Each Guarantor Subsidiary and by its acceptance hereof, each
beneficiary hereof, hereby confirms that it is its intention that the
Subsidiary Guarantee of such Guarantor Subsidiary not constitute a fraudulent
transfer or conveyance for purposes of the Bankruptcy Law, the Uniform
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Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal, state or foreign law to the extent applicable to such Subsidiary
Guarantee. To effectuate the foregoing intention, each such person hereby
irrevocably agrees that the obligation of each Guarantor Subsidiary under its
Subsidiary Guarantee under this Article 10 shall be limited to the maximum
amount as will, after giving effect to such maximum amount and all other
(contingent or otherwise) liabilities of each Guarantor Subsidiary that are
relevant under such laws, result in the obligations of each Guarantor
Subsidiary in respect of such maximum amount not constituting a fraudulent
conveyance.
SECTION 10.09 EXECUTION AND DELIVERY OF GUARANTEES.
To evidence the Parent Guarantee and the Subsidiary
Guarantees set forth in Section 10.05 and 10.07, each of the Company, the
Parent and each Guarantor Subsidiary hereby agrees that (a) a notation of such
Parent Guarantee and Subsidiary Guarantee substantially as set forth on Exhibit
D hereto shall be endorsed on each Senior Note authenticated and delivered by
the Trustee, (b) such endorsement shall be executed on behalf of each Guarantor
Subsidiary or the Parent, as applicable, by its Officer, and (c) a counterpart
signature page to this Indenture shall be executed on behalf of each Guarantor
Subsidiary and the Parent by its Officer.
The Parent and each Guarantor Subsidiary hereby agrees that
its Guarantee set forth in Section 10.05 or 10.07, as applicable, shall remain
in full force and effect notwithstanding any failure to endorse on each Senior
Note a notation of such Guarantor Subsidiary or Parent.
If an Officer whose signature is on this Indenture no longer
holds that office at the time the Trustee authenticates the Senior Notes on
which a Guarantee is endorsed, the Guarantee shall nevertheless be valid.
SECTION 10.10 GUARANTEE BY SUBSIDIARY
The Company shall cause (i) each domestic Restricted
Subsidiary that is formed or acquired after the date hereof and (ii)
each domestic Subsidiary that becomes a Restricted Subsidiary after the
date hereof, in each case concurrently therewith, to (i) become a
Subsidiary Guarantor hereunder and execute and deliver to the Trustee a
Subsidiary Guarantee in the form of Exhibit D attached hereto and a
supplemental indenture in form reasonably satisfactory to the Trustee
pursuant to which such Restricted Subsidiary shall unconditionally
guarantee all of the Obligations as set forth in Section 10.07 of this
Indenture; and (ii) execute a Security Agreement (substantially in the form
of the Security Agreement entered into on the date hereof) and other
Security Documents necessary or reasonably requested by the Trustee to
grant the Trustee a valid, enforceable, perfected Lien on the Collateral
described therein, subject only to Liens permitted under Section 4.09 and
those permitted by the terms of the Security Documents; and (iii) cause
such Restricted Subsidiary to deliver to the Trustee an Opinion of Counsel,
in form reasonably satisfactory to the Trustee, that (i) such Security
Agreement, supplemental indenture and Subsidiary Guarantee have been duly
authorized, executed and delivered by such Restricted Subsidiary and (ii)
and such Security Agreement, this Indenture and such Subsidiary Guarantee
constitute a legal, valid, binding and enforceable obligation of such
Restricted Subsidiary, subject to customary assumptions and exceptions,
including for bankruptcy, fraudulent transfer and equitable principles.
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SECTION 10.11 RELEASE OF GUARANTOR SUBSIDIARIES
If all of the Capital Stock or substantially all of the
assets of any Guarantor Subsidiary is sold by the Company, the Parent or
any of their Subsidiaries to a Person (other than the Company, the Parent
or any of their Subsidiaries) in a transaction that complies with the terms
of this Indenture, then such Guarantor Subsidiary will be released and
discharged from all of its Obligations under its Subsidiary Guarantee of
the Notes and this Indenture.
ARTICLE 11.
MISCELLANEOUS
SECTION 11.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies, or
conflicts with the duties imposed by operation of section 318(c) of the
TIA, the imposed duties shall control.
SECTION 11.02 NOTICES.
Any notice or communication by the Company or the Trustee
to the other is duly given if in writing and delivered in person, mailed by
registered or certified mail, postage prepaid, return receipt requested or
delivered by telecopier or overnight air courier guaranteeing next day
delivery to the other's address:
If to the Company:
Kinetek Industries, Inc.
ArborLake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
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If to the Trustee:
U.S. Bank National Association
U.S. Bank Trust Center
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attention: Corporate Trust Administration
Telecopier No.: (000) 000-0000
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by
hand, if personally delivered; the date receipt is acknowledged, if mailed
by registered or certified mail; when answered back, if telecopied; and the
next Business Day after timely delivery to the courier, if sent by
overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed
by first-class mail to his or her address shown on the register kept by the
Registrar. Failure to mail a notice or communication to a Holder or any
defect in it shall not affect its sufficiency with respect to other
Holders.
If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given, whether or not
the addressee receives it.
If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same
time.
SECTION 11.03 COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to section 312(b) of the
TIA with other Holders with respect to their rights under this Indenture or
the Senior Notes. The Company, the Trustee, the Registrar and any other
Person shall have the protection of section 312(c) of the TIA.
SECTION 11.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(a) an Officers' Certificate (which shall include the statements
set forth in Section 11.05) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel (which shall include the statements set
forth in Section 11.05) stating that, in the opinion of such counsel, all such
conditions precedent provided for in this Indenture relating to the
proposed action have been complied with.
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SECTION 11.05 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to section 314(a)(4) of the TIA) shall
include:
(1) a statement that the Person making such
certificate or opinion has read such
covenant or condition;
(2) a brief statement as to the nature and
scope of the examination or investigation
upon which the statements or opinions
contained in such certificate or opinion
are based;
(3) a statement that, in the opinion of such
Person, he has made such examination or
investigation as is necessary to enable him
to express an informed opinion as to
whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in such Person's
opinion, such condition or covenant has
been complied with.
SECTION 11.06 RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at
a meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions.
SECTION 11.07 LEGAL HOLIDAYS.
If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening
period.
SECTION 11.08 NO RECOURSE AGAINST OTHERS.
No officer, employee, director, stockholder or Subsidiary
of the Company shall have any liability for any Obligations of the Company
under the Senior Notes or this Indenture, or for any claim based on, in
respect of, or by reason of, such Obligations or the creation of any such
Obligation, except, in the case of a Subsidiary, for an express guarantee
or an express creation of any Lien by such Subsidiary of the Company's
Obligations under the Senior Notes. Each Holder by accepting a Senior Note
waives and releases all such liability, and such waiver and release is part
of the consideration for the issuance of the Senior Notes. The foregoing
waiver may not be effective to waive liabilities under the Federal
securities law and the Commission is of the view that such a waiver is
against public policy.
73
SECTION 11.09 COUNTERPARTS.
This Indenture may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 11.10 VARIABLE PROVISIONS.
The Company initially appoints the Trustee as Paying
Agent, Registrar and authenticating agent.
The first compliance certificate to be delivered by the
Company to the Trustee pursuant to Section 4.03 shall be for the fiscal
year ending on December 31, 1996.
SECTION 11.11 GOVERNING LAW.
The internal laws of the State of New York shall govern
this Indenture and the Senior Notes, without regard to the conflict of laws
provisions thereof.
SECTION 11.12 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another
indenture, loan or debt agreement of the Company or any of its
Subsidiaries, and no other indenture, loan or debt agreement may be used to
interpret this Indenture.
SECTION 11.13 SUCCESSORS.
All agreements of the Company in this Indenture and the
Senior Notes shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
SECTION 11.14 SEVERABILITY.
If any provision in this Indenture or in the Senior Notes
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.15 TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table, and
headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part hereof,
and shall in no way modify or restrict any of the terms or provisions
hereof.
[NEXT PAGE IS THE SIGNATURE PAGE]
74
Dated as of April 12, 2002
KINETEK INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
Dated as of April 12, 2002
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
AS GUARANTORS:
KINETEK, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
XXXXXX-XXXXX INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
75
THE IMPERIAL ELECTRIC COMPANY
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
GEAR RESEARCH, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
MOTION HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
MOTION CONTROL ENGINEERING, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
FIR GROUP HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
76
ELECTRICAL DESIGN AND CONTROL COMPANY
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
ADVANCED D.C. HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
ADVANCED D.C. MOTORS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Vice President
77
(Face of Note)
EXHIBIT A
5% Senior Note due 2007
No. $__________
CUSIP No. [ ]
KINETEK INDUSTRIES, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on May 1, 2007.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Dated:
KINETEK INDUSTRIES, INC.
By:_________________________________
Name:
Title:
Trustee's Certificate of Authentication
Dated:
This is one of the Global
Senior Notes referred to in the
within-mentioned Indenture:
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:_________________________________________
Authorized Signatory
A-1
[Unless and until it is exchanged in whole or in part for
Senior Notes in definitive form, this Senior 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. The Depository Trust
Company shall act as the Depository until a successor shall be appointed by
the Company and the Registrar. Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx) ("XXX"), to the issuer or its agent for registration of
transfer, exchange or payment, and any certificate issued is registered in
the name of Cede & Co. or such other name as may be requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY Person IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co., has an interest herein.] 1/
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0
XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
_______________
1/ This paragraph should be included only if the Senior Note is issued in
global form.
A-2
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER
IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER
SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED. YOU MAY CONTACT XXXXXX XXXXX, THE CHIEF FINANCIAL
OFFICER OF THE ISSUER, AT OUR EXECUTIVE OFFICES AT ARBORLAKE
CENTRE, SUITE 550, 0000 XXXX XXXX XXXX, XXXXXXXXX, XXXXXXXX 00000,
(000) 000-0000, WHO WILL PROVIDE YOU WITH ANY REQUIRED INFORMATION
REGARDING THE ORIGINAL ISSUE DISCOUNT.
Additional provisions of this Senior Note are set forth on the other side
of this Senior Note.
A-3
(Back of Note)
5% SENIOR NOTE DUE 2007
1. Interest. Kinetek Industries, Inc. (the "Company") promises to
pay interest on the principal amount of the Senior Notes at the rate and in
the manner specified below. Interest on the Senior Notes will accrue at 5%
per annum from April __, 2002 until maturity. Interest will be payable
semiannually in cash in arrears on May 1 and November 1 of each year, or if
any such day is not a Business Day on the next succeeding Business Day
(each, an "Interest Payment Date"). Interest on the Senior Notes will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from April __, 2002; provided that the first
Interest Payment Date shall be May 1, 2002. The Company shall pay interest
on overdue principal and premium, if any, from time to time on demand at
the rate of 2% per annum in excess of the interest rate then in effect and
shall pay interest on overdue installments of interest (without regard to
any applicable grace periods) from time to time on demand at the same rate
to the extent lawful. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Senior
Notes (except defaulted interest) to the Persons who are registered holders
of Senior Notes at the close of business on the record date for the next
Interest Payment Date even if such Senior Notes are canceled after such
record date and on or before such Interest Payment Date. Holders must
surrender Senior Notes to a Paying Agent to collect principal payments on
such Senior Notes. The Company will pay principal, premium, if any,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Company will pay
principal, premium, if any, and interest by wire transfer of immediately
available funds to the accounts specified by the Holders or, if no such
account is specified, by mailing a check to each such Holder's registered
address; provided that payment by wire transfer of immediately available
funds will be required with respect to principal, premium, if any, and
interest on all Global Notes.
3. Paying Agent and Registrar. U.S. Bank National Association (the
"Trustee") will initially act as the Paying Agent and Registrar. The Company
may appoint additional paying agents or co-registrars, and change the Paying
Agent, any additional paying agent, the Registrar or any co-registrar without
prior notice to any Holder. The Company or any of its Subsidiaries may act in
any such capacity.
4. Indenture. The Company issued the Senior Notes under an
Indenture, dated as of April __, 2002 (the "Indenture"), among the Company,
the Guarantors named therein and the Trustee. The terms of the Senior Notes
include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939 (15 U.S. Code xx.xx.
77aaa-77bbbb) as in effect on the date of the original issuance of the
Senior Notes (the "Trust Indenture Act"). The Senior Notes are subject to,
and qualified by, all such terms, certain of which are summarized herein,
and Holders are referred to the Indenture and the Trust Indenture Act for a
statement of such terms (all capitalized terms not defined herein shall
have the meanings assigned them in the Indenture). The Senior Notes are
unsecured senior obligations of the Company limited in aggregate principal
amount to $15,000,000. Each Holder, by accepting a Senior 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.
A-4
5. Optional Redemption. Senior Notes are redeemable, in whole or in
part, at any time, at the option of the Company at the Make-Whole Price (as
defined in the Indenture), together with all accrued and unpaid interest
thereon, if any, to the Redemption Date.
6. Mandatory Redemption. Subject to the Company's obligation to
make an offer to purchase Senior Notes under certain circumstances pursuant
to Sections 4.13 and 4.14 of the Indenture (as described in paragraph 7
below), the Company is not required to make any mandatory redemption,
purchase or sinking fund payments with respect to the Senior Notes.
7. Mandatory Offers to Purchase Senior Notes. (a) Upon the
occurrence of a Change of Control (such date being the "Change of Control
Trigger Date"), each Holder of Senior Notes shall have the right to require
the Company to purchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Senior Notes pursuant to an offer (a
"Change of Control Offer") at a purchase price in cash equal to 101% of the
aggregate principal amount thereof, plus any accrued and unpaid interest to
the date of purchase.
(b) If the Company or any Restricted Subsidiary
consummates one or more Asset Sales and does not use all of the Net
Proceeds from such Asset Sales as provided in the Indenture, the Company
will be required, under certain circumstances, to utilize the Excess
Proceeds from such Asset Sales to offer (an "Asset Sale Offer") to purchase
Senior Notes at a purchase price equal to 100% of the principal amount of
the Senior Notes, plus any accrued and unpaid interest to the date of
purchase. If the Excess Proceeds are insufficient to purchase all Senior
Notes tendered pursuant to any Asset Sale Offer, the Trustee shall select
the Senior Notes to be purchased in accordance with the terms of the
Indenture.
(c) Holders may tender all or, subject to paragraph
8 below, any portion of their Senior Notes in a Change of Control Offer or
Asset Sale Offer (collectively, an "Offer") by completing the form below
entitled "OPTION OF HOLDER TO ELECT PURCHASE."
(d) The Company shall comply with any tender offer
rules under the Exchange Act which may then be applicable, including Rule
14e-1, in connection with an offer required to be made by the Company to
repurchase the Senior Notes as a result of a Change of Control or an Asset
Sale Trigger Date. To the extent that the provisions of any securities laws
or regulations conflict with provisions of this Indenture, the Company
shall comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations under this Indenture by
virtue thereof.
8. Notice of Redemption or Purchase. Notice of an optional
redemption or an Offer will be mailed to each Holder at its registered
address at least 30 days but not more than 60 days before the date of
redemption or purchase. Senior Notes may be redeemed or purchased in part,
but only in whole multiples of $1,000 unless all Senior Notes held by a
Holder are to be redeemed or purchased. On or after any date on which
Senior Notes are redeemed or purchased, interest ceases to accrue on the
Senior Notes or portions thereof called for redemption or accepted for
purchase on such date.
A-5
9. Denominations, Transfer, Exchange. The Senior Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. The transfer of Senior Notes may be registered and
Senior Notes may be exchanged as provided in the Indenture. Holders seeking
to transfer or exchange their Senior Notes may be required, among other
things, to furnish appropriate endorsements and transfer documents and to
pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not exchange or register the transfer of any Senior Note or
portion of a Senior Note selected for redemption or tendered pursuant to an
Offer. Also, it need not exchange or register the transfer of any Senior
Notes for a period of 15 Business Days before a selection of Senior Notes
to be redeemed or between a record date and the next succeeding Interest
Payment Date.
10. Persons Deemed Owners. The registered Holder of a Senior Note may
be treated as its owner for all purposes.
11. Amendments and Waivers. Subject to certain exceptions, the
Indenture or the Senior Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the
then outstanding Senior Notes, and any existing Default (except a payment
Default) may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Senior Notes. Without the consent
of any Holder, the Indenture or the Senior Notes may be amended to: cure
any ambiguity, defect or inconsistency; provide for uncertificated Senior
Notes in addition to or in place of certificated Senior Notes; provide for
the assumption by another corporation of the Company's obligations to
Holders in the event of a merger or consolidation of the Company in which
the Company is not the surviving corporation or a sale of substantially all
of the Company's assets to such other corporation; comply with the
Securities and Exchange Commission's requirements to effect or maintain the
qualification of the Indenture under the Trust Indenture Act; provide for
additional Guarantees with respect to the Senior Notes; or, make any change
that does not materially adversely affect any Holder's rights under the
Indenture.
12. Defaults and Remedies. Events of Default include: default for
30 days in payment of interest on, the Senior Notes; default in payment of
principal of, or premium, if any, on the Senior Notes; failure by the
Company for 30 days after notice to it to comply with any of its other
agreements or covenants in, or provisions of, the Indenture or the Senior
Notes; certain defaults under and acceleration prior to maturity of, or
failure to pay at maturity, certain other Indebtedness; certain final
judgments that remain undischarged; any Security Document ceases to be
effective or the Lien created thereby ceases to be enforceable; certain
judicial findings of unenforceability or invalidity as to any guarantee of
the Senior Notes or the disaffirmance or denial by any guarantor of its
guarantee of the Senior Notes; and certain events of bankruptcy or
insolvency involving the Company or any Restricted Subsidiary that is a
Significant Subsidiary. If an Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the
Senior Notes may declare all the Senior Notes to be immediately due and
payable in an amount equal to the principal of, premium, if any, and any
accrued and unpaid interest on, such Senior Notes; provided, however, that
in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, the principal of, premium, if any, and any
accrued and unpaid interest on, the Senior Notes becomes due and payable
immediately without further action or notice. Subject to certain
exceptions, Holders of a majority in principal amount of the then
outstanding Senior Notes may direct the Trustee in its exercise of any
trust or power, provided that the Trustee will be under no obligation to
exercise any of its rights or powers under the Indenture at the request of
Holders unless such Holders have offered to the Trustee security and
A-6
indemnity satisfactory to it. Holders may not enforce the Indenture or the
Senior Notes except as provided in the Indenture. The Trustee may withhold
from Holders notice of any continuing default (except a payment Default) if
it determines that withholding notice is in their interests. The Company
must furnish an annual compliance certificate to the Trustee.
13. Trustee Dealings with the Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or any Affiliate, and may otherwise deal with the
Company or any Affiliate, as if it were not Trustee.
14. No Recourse Against Others. No officer, employee, director,
stockholder or Subsidiary of the Company shall have any liability for any
Obligations of the Company under the Senior Notes or the Indenture, or for
any claim based on, in respect of, or by reason of, such Obligations or the
creation of any such Obligation, except, in the case of a Subsidiary, for
an express guarantee or an express creation of any Lien by such Subsidiary
of the Company's Obligations under the Senior Notes. Each Holder by
accepting a Senior Note waives and releases all such liability, and such
waiver and release is part of the consideration for the issuance of the
Senior Notes. The foregoing waiver may not be effective to waive
liabilities under the Federal securities law and the Commission is of the
view that such a waiver is against public policy.
15. Additional Rights of Holders of Transfer Restricted Senior Notes
In addition to the rights provided to Holders of Senior Notes under the
Indenture, Holders of Transfer Restricted Senior Notes shall have all the
rights set forth in the Registration Rights Agreement, dated as of
April __, 2002, among the Company, the Guarantors and Xxxxxxxxx & Company,
Inc. (the "Registration Rights Agreement").
16. Successor Substituted. Upon the consolidation or merger by the
Company with or into another corporation, or upon the sale, lease,
conveyance or other disposition of all or substantially all of its assets
to another corporation, in accordance with the Indenture, the corporation
surviving any such merger or consolidation (if not the Company) or the
corporation to which such assets were sold or transferred to shall succeed
to, and be substituted for, and may exercise every right and power of the
Company under the Indenture with the same effect as if such surviving or
other corporation had been named as the Company in the Indenture.
17. Governing Law. This Senior Note shall be governed by and construed
in accordance with the internal laws of the State of New York without regard
to the conflict of laws provisions thereof.
18. Authentication. This Senior Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
A-7
19. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
20. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Senior Note Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Senior Notes and have directed
the Trustee to use CUSIP numbers in notices of redemption as a convenience
to Holders. No representation is made as to the accuracy of such numbers
either as printed on the Senior Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers printed on the Senior Notes.
The Company will furnish to any Holder upon written
request and without charge a copy of the Indenture, which has in it the
text of this Senior Note in larger type. Request may be made to:
Kinetek Industries, Inc.
ArborLake Centre, Suite 550
0000 Xxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
A-8
ASSIGNMENT FORM
To assign this Senior Note, fill in the form below
(I) or (we) assign and transfer this Senior Note to:
___________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _________________________________________ as agent
to transfer this Senior Note on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:____________________________________
(Sign exactly as your name appears on
the other side of this Senior Note)
Signature Guarantee:
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Senior Note purchased by the
Company pursuant to Section 4.13 of the Indenture, check the box:
If you elect to have this Senior Note purchased by the
Company pursuant to Section 4.14 of the Indenture, check the box:
If you elect to have only part of this Senior Note
purchased by the Company pursuant to Section 4.13 or 4.14 of the Indenture,
state the amount (multiples of $1,000 only):
$__________________________
Date: Your Signature:____________________________________
(Sign exactly as your name appears on
the other side of this Senior Note)
Signature Guarantee:
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTES 2/
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
Principal
Amount of Amount of Amount of this
decrease in increase in Global Note Signature of
Principal Principal following such authorized
Date of Amount of Amount of decrease officer of
Exchange this Global Note this Global Note (or increase) Trustee
-------- ---------------- ---------------- --------------- ------------
___________________________
2/ This should be included if the Senior Note is issued in global form.
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
_________________, _______
Re: 5% Senior Notes due 2007 of Kinetek Industries, Inc.
This Certificate relates to $_____ principal amount of
Senior Notes held in * ________ book-entry or *_______ definitive form by
________________ (the "Transferor").
The Transferor*:
has requested the Trustee by written order to deliver in exchange
for its beneficial interest in the Global Note held by the Depository a
Senior Note or Senior Notes in definitive, registered form equal to its
beneficial interest in such Global Note (or the portion thereof indicated
above); or
has requested the Trustee by written order to exchange or register
the transfer of a Senior Note or Senior Notes.
In connection with such request and in respect of each such Senior
Note, the Transferor does hereby certify that the Transferor is familiar
with the Indenture relating to the above captioned Senior Notes and that
the transfer of this Senior Note does not require registration under the
Securities Act (as defined below) because:*
Such Senior Note is being acquired for the Transferor's own
account without transfer (in satisfaction of Section 2.06(a)(ii)(A) or
Section 2.06(d)(i)(A) of the Indenture).
Such Senior Note is being transferred (i) to a "qualified
institutional buyer" (as defined in Rule 144A under the Securities Act of
1933, as amended (the "Securities Act")), in reliance on Rule 144A or (ii)
pursuant to an exemption from registration in accordance with Rule 904
under the Securities Act (and in the case of clause (ii), based on an
opinion of counsel if the Company so requests and together with a
certification in the reasonable discretion of the Company or Trustee).
Such Senior Note is being transferred (i) in accordance with Rule
144 under the Securities Act (and based on an opinion of counsel if the
Company so requests) or (ii) pursuant to an effective registration
statement under the Securities Act.
Such Senior Note is being transferred to an institutional
accredited investor within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act pursuant to a private placement exemption from the
registration requirements of the Securities Act (and based on an opinion of
counsel if the Company so requests together with a certification in
substantially the form of Exhibit C to the Indenture).
________________
* Check applicable box.
B-1
Such Senior Note is being transferred in reliance on and in
compliance with another exemption from the registration requirements of the
Securities Act (and based on an opinion of counsel if the Company so
requests).
___________________________________
[INSERT NAME OF TRANSFEROR]
By:____________________________________
Name:
Title:
Address:
_______________
* Check applicable box.
B-2
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
_________________, _______
___________________, as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
In connection with our proposed purchase of certain 5%
Senior Notes due 2007 (the "Senior Notes") of Kinetek Industries, Inc., a
Delaware corporation (the "Company"), we represent that:
(1) we are an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under
the Securities Act (an "Institutional Accredited
Investor"), or an entity in which all of the
equity owners are Institutional Accredited
Investors;
(2) any purchase of Senior Notes will be for our own
account or for the account of one or more other
Institutional Accredited Investors as to which
we exercise sole investment discretion;
(3) we have such knowledge and experience in
financial and business matters that we are
capable of evaluating the merits and risks of
purchasing Senior Notes and we and any accounts
for which we are acting are able to bear the
economic risks of our or their investment;
(4) we are not acquiring Senior Notes with a view to
any distribution thereof in a transaction that
would violate the Securities Act or the
securities laws of any State of the United
States or any other applicable jurisdiction;
provided that the disposition of our property
and the property of any accounts for which we
are acting as fiduciary shall remain at all
times within our control; and
(5) we acknowledge that we have had access to such
financial and other information, and have been
afforded the opportunity to ask such questions
of representatives of the Company and receive
answers thereto, as we deem necessary in
connection with our decision to purchase Senior
Notes.
We understand that the Senior Notes have not been
registered under the Securities Act, and we agree, on our own behalf and on
behalf of each account for which we acquire any Senior Notes, that such
Senior Notes may be offered, resold, pledged or otherwise transferred only
(i) to a person whom we reasonably believe to be a qualified institutional
buyer (as defined in Rule 144A under the Securities Act) in a transaction
C-1
meeting the requirements of Rule 144A, in a transaction meeting the
requirements of Rule 144 under the Securities Act, outside the United
States in a transaction meeting the requirements of Rule 904 under the
Securities Act or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion
of counsel if the Company so requests), (ii) to the Company or (iii)
pursuant to an effective registration statement, and, in each case, in
accordance with any applicable securities laws of any State of the United
States or any other applicable jurisdiction. We understand that the
registrar will not be required to accept for registration of transfer any
Senior Notes, except upon presentation of evidence satisfactory to the
Company that the foregoing restrictions on transfer have been complied
with. We further understand that the Senior Notes purchased by us will be
in the form of definitive physical certificates and that such certificates
will bear a legend reflecting the substance of this paragraph. We further
agree to provide to any person acquiring any of the Senior Notes from us a
notice advising such person that resale's of the Senior Notes are
restricted as stated herein.
We acknowledge that you, the Company and others will rely
upon our confirmations, acknowledgments and agreements set forth herein,
and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAWS PROVISIONS THEREOF.
Very truly yours,
_________________________________
[Name of Transferor]
By: _____________________________
Name:
Title:
Address:
C-2
EXHIBIT D
FORM OF GUARANTEE
GUARANTEE
For good and valuable consideration received from the Company by
the undersigned (hereinafter referred to as the "Guarantors," which term
includes any successor or additional Subsidiary Guarantors), the receipt
and sufficiency of which is hereby acknowledged, subject to Sections 10.06
and 10.08 of the Indenture, each Guarantor, jointly and severally, hereby
unconditionally guarantees, irrespective of the validity or enforceability
of the Indenture, the Senior Notes, the Security Documents, the
Registration Rights Agreement or the Obligations thereunder, (a) the due
and punctual payment of the principal and premium, if any, of and interest
on the Senior Notes, whether at maturity or on an interest payment date, by
acceleration or otherwise, (b) the due and punctual payment and performance
of all other obligations under such documents, all in accordance with the
terms set forth in the Indenture, the Senior Notes and the Security
Documents, and (c) in case of any extension of time of payment or renewal
of any Senior Notes or any of such other obligations thereunder or under
the Indenture or the Security Documents, the due and punctual payment or
performance thereof in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
No director, member, manager, officer, employee, incorporator,
stockholder or controlling person of the Guarantor, as such, shall have any
liability under this Subsidiary Guarantee or Parent Guarantee for any
obligations of the applicable Guarantor under the Senior Notes, the
Indenture, the Security Documents or the Registration Rights Agreement or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder of the Senior Notes by accepting a Senior Note
waives and releases all such liability.
GUARANTORS:
KINETEK, INC.
By:
Name:
Title:
XXXXXX-XXXXX INDUSTRIES, INC.
By:
Name:
Title:
D-1
THE IMPERIAL ELECTRIC COMPANY
By:
Name:
Title:
GEAR RESEARCH, INC.
By:
Name:
Title:
MOTION HOLDINGS, INC.
By:
Name:
Title:
MOTION CONTROL ENGINEERING, INC.
By:
Name:
Title:
D-2
FIR GROUP HOLDINGS, INC.
By:
Name:
Title:
ELECTRICAL DESIGN AND CONTROL COMPANY
By:
Name:
Title:
ADVANCED D.C. HOLDINGS, INC.
By:
Name:
Title:
ADVANCED D.C. MOTORS, INC.
By:
Name:
Title:
D-3
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.........................................1
SECTION 1.01 Definitions...........................................................1
SECTION 1.02 Other Definitions....................................................18
SECTION 1.03 Incorporation by Reference of Trust Indenture Act....................18
SECTION 1.04 Rules of Construction................................................18
ARTICLE 2. NOTES..............................................................................19
SECTION 2.01 Principal amount, Form and Dating....................................19
SECTION 2.02 Execution and Authentication.........................................19
SECTION 2.03 Registrar and Paying Agent...........................................20
SECTION 2.04 Paying Agent to Hold Money in Trust..................................21
SECTION 2.05 Holder Lists.........................................................21
SECTION 2.06 Transfer and Exchange................................................21
SECTION 2.07 Replacement Senior Notes.............................................28
SECTION 2.08 Outstanding Senior Notes.............................................28
SECTION 2.09 Treasury Senior Notes................................................28
SECTION 2.10 Temporary Senior Notes...............................................28
SECTION 2.11 Cancellation.........................................................29
SECTION 2.12 Defaulted Interest...................................................29
SECTION 2.13 Record Date..........................................................29
SECTION 2.14 CUSIP Number.........................................................29
ARTICLE 3. OPTIONAL REDEMPTION AND MANDATORY OFFERS TO PURCHASE...............................29
SECTION 3.01 Notices to Trustee...................................................30
SECTION 3.02 Selection of Senior Notes to be Redeemed or Purchased................30
SECTION 3.03 Notice of Redemption.................................................31
SECTION 3.04 Effect of Notice of Redemption.......................................32
SECTION 3.05 Deposit of Redemption Price..........................................32
SECTION 3.06 Senior Notes Redeemed in Part........................................32
SECTION 3.07 Optional Redemption Provisions.......................................33
SECTION 3.08 Mandatory Purchase Provisions........................................33
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ARTICLE 4. COVENANTS..........................................................................34
SECTION 4.01 Payment of Senior Notes..............................................34
SECTION 4.02 SEC Reports..........................................................35
SECTION 4.03 Compliance Certificate...............................................36
SECTION 4.04 Stay, Extension and Usury Laws.......................................36
SECTION 4.05 Limitation on Restricted Payments....................................37
SECTION 4.06 Corporate Existence..................................................39
SECTION 4.07 Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock...................................................40
SECTION 4.08 Limitation on Transactions With Affiliates...........................41
SECTION 4.09 Limitation on Liens..................................................41
SECTION 4.10 Compliance With Laws, Taxes..........................................42
SECTION 4.11 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries....................................42
SECTION 4.12 Maintenance of Office or Agencies....................................43
SECTION 4.13 Change of Control....................................................43
SECTION 4.14 Limitation on Asset Sales............................................44
SECTION 4.15 Limitation on Guarantees of Company Indebtedness by
Restricted Subsidiaries..............................................45
SECTION 4.16 Designation of Restricted and Non-Restricted Subsidiaries............46
SECTION 4.17 Limitation on Issuance of Preferred Equity Interests.................47
ARTICLE 5. SUCCESSORS.........................................................................47
SECTION 5.01 Merger or Consolidation..............................................47
SECTION 5.02 Successor Corporation Substituted....................................48
ARTICLE 6. DEFAULTS AND REMEDIES..............................................................48
SECTION 6.01 Events of Default....................................................48
SECTION 6.02 Acceleration.........................................................50
SECTION 6.03 Other Remedies.......................................................51
SECTION 6.04 Waiver of Past Defaults..............................................51
SECTION 6.05 Control by Majority..................................................51
SECTION 6.06 Limitation on Suits..................................................52
SECTION 6.07 Rights of Holders to Receive Payment.................................52
ii
SECTION 6.08 Collection Suit by Trustee...........................................52
SECTION 6.09 Trustee May File Proofs of Claim.....................................52
SECTION 6.10 Priorities...........................................................53
SECTION 6.11 Undertaking for Costs................................................53
ARTICLE 7. TRUSTEE............................................................................54
SECTION 7.01 Duties of Trustee....................................................54
SECTION 7.02 Rights of Trustee....................................................55
SECTION 7.03 Individual Rights of Trustee.........................................56
SECTION 7.04 Trustee's Disclaimer.................................................56
SECTION 7.05 Notice to Holders of Defaults and Events of Default..................56
SECTION 7.06 Reports by Trustee to Holders........................................56
SECTION 7.07 Compensation and Indemnity...........................................57
SECTION 7.08 Replacement of Trustee...............................................57
SECTION 7.09 Successor Trustee by Merger, Etc.....................................58
SECTION 7.10 Eligibility; Disqualification........................................58
SECTION 7.11 Preferential Collection of Claims Against the Company................59
ARTICLE 8. DISCHARGE OF INDENTURE.............................................................59
SECTION 8.01 Discharge of Liability on Senior Notes; Defeasance...................59
SECTION 8.02 Conditions to Defeasance.............................................60
SECTION 8.03 Application of Trust Money...........................................61
SECTION 8.04 Repayment to the Company.............................................61
SECTION 8.05 Indemnity for Government Obligations.................................62
SECTION 8.06 Reinstatement........................................................62
ARTICLE 9. AMENDMENTS.........................................................................62
SECTION 9.01 Amendments and Supplements Permitted Without Consent of
Holders..............................................................62
SECTION 9.02 AMENDMENTS AND SUPPLEMENTS REQUIRING CONSENT OF HOLDERS..............63
SECTION 9.03 Compliance with TIA..................................................63
SECTION 9.04 Revocation and Effect of Consents....................................64
SECTION 9.05 Notation on or Exchange of Senior Notes..............................64
SECTION 9.06 Trustee Protected....................................................64
iii
ARTICLE 10. COLLATERAL AND SECURITY AND GUARANTEES.............................................65
SECTION 10.01 Collateral Documents.................................................65
SECTION 10.02 Additional collateral................................................65
SECTION 10.03 Release of Collateral................................................65
SECTION 10.04 Authorization of Actions to be Taken by the Trustee under
the Security Documents...............................................66
SECTION 10.05 Parent Guarantee.....................................................66
SECTION 10.06 Limitation on Parents Liability......................................68
SECTION 10.07 Subsidiary Guarantees................................................68
SECTION 10.08 Limitation on the Guarantor Subsidiaries' Liability..................69
SECTION 10.09 Execution and Delivery of Guarantees.................................70
SECTION 10.10 Guarantee by Subsidiary..............................................70
SECTION 10.11 Release of Guarantor Subsidiaries....................................71
ARTICLE 11. MISCELLANEOUS......................................................................71
SECTION 11.01 Trust Indenture Act Controls.........................................71
SECTION 11.02 Notices..............................................................71
SECTION 11.03 Communication by Holders with Other Holders..........................72
SECTION 11.04 Certificate and Opinion as to Conditions Precedent...................72
SECTION 11.05 Statements Required in Certificate or Opinion........................73
SECTION 11.06 Rules by Trustee and Agents..........................................73
SECTION 11.07 Legal Holidays.......................................................73
SECTION 11.08 No Recourse Against Others...........................................73
SECTION 11.09 Counterparts.........................................................74
SECTION 11.10 Variable Provisions..................................................74
SECTION 11.11 Governing Law........................................................74
SECTION 11.12 No Adverse Interpretation of Other Agreements........................74
SECTION 11.13 Successors...........................................................74
SECTION 11.14 Severability.........................................................74
SECTION 11.15 Table of Contents, Headings, Etc.....................................74
iv
